GC Aesthetics & Ors v Establishment Labs (UPC_CFI_1357/2025, UPC_CFI_629/2026)
Decision date:
18 March 2026
Osborne Clarke summary
- On 7 January 2026, the defendants (a group of companies collectively referred to as GC Aesthetics) filed a request for security of costs under Rule 158 RoP in consolidated infringement and revocation proceedings. The panel ordered Establishment Labs to provide security for costs of EUR 600,000 within 21 days.
- With reference to Article 69(4) UPCA, Rule 159 RoP and relevant case law, the defendants relied on two thresholds. Firstly, the likelihood that enforcement of a UPC order in Costa Rica, where Establishment Labs is incorporated, would be unduly burdensome. They noted that there is no precedent for enforcement of a UPC costs order in Costa Rica. Secondly, the legitimate concerns that any future costs order in their favour may not be recoverable. If one of these thresholds is met, then the court may, at its discretion, order security. The panel confirmed, following the Court of Appeal in Syntorr v Arthex, that each threshold must be assessed independently. Combined consideration of the two thresholds is insufficient if one of the thresholds has not been met.
- On the first threshold, expert evidence established that Costa Rica operates a two-stage process for recognising and enforcing foreign judicial decisions. The panel held that, when arguing that recognition and enforcement proceedings are "unduly burdensome" by reference to their duration, the applicant must supply a standard or reference against which to measure whether that duration is excessive. The panel noted that a recognition stage is common in non-EU/EEA states, and that even within the EU the enforcement stage is governed by national law. As the defendants had not provided a comparator, the panel held that they had failed to establish that enforcement in Costa Rica was unduly burdensome, and the request based on that threshold was therefore denied.
- On the second threshold, the court held that the ratio behind this provision is the protection of a defendant against a claimant who initiates an action without having sufficient means to compensate the defendant for the legal costs incurred. In assessing whether the claimant has “sufficient means”, the court should consider the facts and circumstances of the claimant’s actual financial situation. However, the panel held that the duration of Costa Rican enforcement proceedings could be considered a relevant factor when assessing whether Establishment Labs’ financial position gave rise to a legitimate concern that a future costs order would be unrecoverable at the point of enforcement. On the financial threshold the panel found that the legitimate concern was established and security was therefore granted.
- On quantum, the panel confirmed that costs likely to be incurred in connection with the counterclaim for revocation should be included in the calculation, given that there was no indication that the defendants would have brought a standalone revocation action had they not been sued for infringement. Applying the UPC's guidelines on recoverable costs, the panel set the combined action value of €20,000,000 and the applicable ceiling for recoverable costs was set at €1,200,000. The panel then exercised its discretion and set the security at 50% of that ceiling, by reference to the Court of Appeal's approach in Suinno Mobile v Microsoft.
Issue
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