Oerlikon Textile v Bhagat Textile Engineers (UPC_CoA_8/2025)
Decision date:
30 October 2025
Osborne Clarke summary
- At first instance, the Milan LD held Bhagat liable for infringement of Oerlikon's patent relating to a false twist texturing machine. The Milan LD ordered Bhagat to pay the costs of the proceedings in the sum of €77,064.65 within one month of service of the costs decision. Bhagat appealed the costs decision and an oral hearing was scheduled on 14 November 2025.
- In the meantime, on 26 September 2025, Oerlikon filed an application for security for costs pursuant to Article 69(4) UPCA and Rule 158 RoP for the costs already awarded at first instance and the costs incurred in the appeal proceedings. Oerlikon argued that as a result of Bhagat's conduct to date, there were legitimate concerns that enforcement of a costs decision in India (where Bhagat is domiciled) would be "unduly burdensome".
- Bhagat requested that the application be dismissed or, in the alternative, the costs already ordered against Bhagat in the first instance proceedings be excluded from any security to be ordered. It maintained that a security for costs order would limit its access to justice and unduly interfere with its right to an effective remedy.
- The Court of Appeal rejected the application for security for costs with respect to the first instance costs, but ordered Bhagat to provide security in the amount of €19,000 in relation to the appeal.
- The Court of Appeal explained that in accordance with Rule 158.1 RoP, an application for security for costs can be filed at any time during the proceedings, and may equally be filed in first instance and appeal proceedings. However, in accordance with Rule 150 RoP, the request must be made before an award on costs has been decided by the court as the main purpose of security for costs in the UPC system is to "protect a party from a future risk of not being able to recover its legal costs that the other party may…be liable to bear".
- The outstanding costs payment from the first instance proceedings was not a matter to justify security for costs before the Court of Appeal given that they had already been awarded. The payment is a matter of enforcing of a costs decision and does not justify a request for security for costs in regard to costs already awarded.
- On costs incurred by Oerlikon in the appeal proceedings, the Court of Appeal decided that Bhagat had not provided the court with sufficient comfort that there was no real and legitimate concern that an order for costs may not be recoverable. The Court of Appeal decided that given the scope of the appeal proceedings, which were not complex and were limited, the requested €90,000 was not appropriate. The court considered the ceiling for recoverable costs (€38,000) and ordered security for costs in the sum of 50% of the ceiling (€19,000) to be paid within 10 days from the date of service of the order.
Issue
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