Can the successful party to a patent litigation action recover its costs?

Patent Litigation

Australia Small Flag Australia

The successful party in Australian patent litigation is generally entitled to an award of costs. Generally the costs will amount to around 50-75% of the actual costs incurred.

Formal offers of compromise compliant with Court Rules have specific costs consequences. In addition, less formal ‘Calderbank’, letters of offer may be taken into account by the Court in a discretionary manner with regard to costs.

Security for costs may be sought in appropriate circumstances, particularly where an applicant does not appear to have sufficient means to meet a costs award, or such means are not located in Australia.

Austria Small Flag Austria

The losing party is required to reimburse the winning party’s court fees and other expenses (e.g. for experts and court interpreters) as well as the legal fees calculated on the basis of the Attorney Tariff Act.

In patent cases, the legal fees based on the Attorney Tariff Act and, therefore, the reimbursable fees are usually well below the actual cost.

Security for costs may only be imposed on foreign parties who have their domicile outside the EU (Sec 56 CPC).

Brazil Small Flag Brazil

The winner can recover part of its costs, such as the fees related to the court-appointed expert report.

Canada Small Flag Canada

Costs are within the discretion of the Federal Court, which may consider anything it considers relevant. Some factors the Court will consider include the outcome of the litigation, the importance and complexity of the issues, the apportionment of liability, and the conduct of the parties.

The successful party is typically entitled to reimbursement of a portion of its legal fees (typically calculated in accordance with a legislative tariff), plus reasonable disbursements, including expert fees. However, the Federal Court can also choose to award a lump sum, calculated as a percentage of the actual legal fees of the party, or in exceptional circumstances, the Court may award full indemnity of the lawyers’ fees.

A plaintiff may be required to pay security for costs into the Federal Court; for example, where the plaintiff is resident outside the jurisdiction and there is reason to believe it has insufficient assets within Canada to satisfy a potential costs award.

The Federal Court will also consider formal settlement offers which meet certain prescribed requirements in calculating the costs to be paid. Where a party makes a written offer to settle that is not accepted by the other side and the offering party obtains a judgment equally favourable to, or more favourable than, the offer, the offering party will be entitled to double costs under the tariff beginning from the date of the offer.

China Small Flag China

For infringement litigations, the court fees, a reasonable part of the investigation and evidence collection fees and attorney fees are recoverable from the losing party; for validity cases, only the court fees are recoverable from the losing party.

If parties make a settlement on the potential costs liability of the opposing party, the court would support it. There is no procedural mechanism either enabling or requiring security for costs.

Czech Republic Small Flag Czech Republic

The successful party can recover costs. Partial recovery is possible in case of partial success.
All reasonably incurred expenses can be recovered in full, except legal costs.

Legal costs recovery is limited to about 1,000USD per instance if no monetary compensation is claimed. If monetary compensation is claimed the law specifies how the costs are calculated.

France Small Flag France

Pursuant to Article 700 of the Code of Civil Procedure, the Court shall order the losing party, to pay to the other party its costs in whole or in part by taking into the balance of convenience. It is recommended to produce a statement proving the costs incurred, in patent matters the costs awards are more and more close to the actual costs incurred by the successful party.

Germany Small Flag Germany

In general, the losing party must reimburse the winning party’s legal costs. Reimbursable costs include court fees, attorneys’ fees for lawyers and patent attorneys as well as necessary expenses (travel expenses, translations expenses, etc.) and are calculated based on specific legal provisions (see table item 28). These reimbursable attorneys’ fees do generally only cover a small part of the hourly fees spent on the case.

It is generally no possible to influence a potential cost liability, except for claimant having to bear the costs of proceedings if defendant fully acknowledges all asserted claims without been formally warned and threatened with proceedings in advance (which very rarely happens and would be a swift and easy win for claimant).

Upon defendant’s request, claimants who do not have their place of business in a Member State of the European Union or the European Economic Area shall provide security for the costs of the proceedings. Exceptions apply.

Greece Small Flag Greece

Pursuant to the provisions of the Civil Procedure Code the losing party is obligated to pay the winning party’s legal expenses, as these are determined by the court. In the past the courts were very reluctant in the calculation of such expenses, several times not covering all attorneys’ fees. However, after the implementation of EU Directive 48/2004/EC into the Greek law the courts are obliged to make a precise calculation of the actual legal expenses.

India Small Flag India

Yes. Courts have the discretion to grant costs, which includes the following:

i) Expenses incurred;
j) Courts fees and other office fees;
k) Attorney Fees;
l) Fees for conducting search and seizure and payment towards fees of the Court appointed Commissioner.

Under Section 35A of the Code of Civil Procedure, 1908, the Court may award compensatory costs in respect of false or vexatious claims or defences. The Court, if it so thinks fit may, after recording its reasons for holding such claim or defense to be false or vexatious, make an order for the payment to the objector by the party by whom such claim or defense has been put forward, of cost by way of compensation.

Ireland Small Flag Ireland

Yes, to an extent. So-called “party and party” costs are generally recoverable and would normally cover approximately two thirds of the successful party’s total legal costs. If there is no agreement on the amount of costs to be paid, this is decided by the Taxing Master of the High Court who will assess and determine the appropriate amount of costs to be paid by the unsuccessful party.

Israel Small Flag Israel

Israeli law provides wide discretion to the courts in awarding costs and attorney fees. In principle, Israeli case law has long incorporated the 'loser pays' rule into Israeli jurisprudence. However, historically Israeli courts did not award realistic costs and attorney fees. In recent years, the awards of costs and fees have gradually increased, but still in many cases they remain unrealistic and are not on an indemnity basis. The IL PTO on the other hand grants higher costs to the prevailing party which is based on the apportionment of the winning party realistic costs. If a settlement offer has been made and was rejected this could substantially mitigate the amount of costs awarded if the disparity between the settlement offer and the eventual judgment is not significant.

The defendant can file a petition for security for costs. The primary consideration in evaluating such petition is whether the defendant can establish a likely difficulty in collecting from the plaintiff the amount of costs to be awarded if and when the claim is denied. In practice, even if granted, the amount of the security is likely to be on the low side so as not to prevent access to the court system.

Italy Small Flag Italy

Italian courts have a history of awarding attorney’s fees based on tariffs set forth by the Ministry of Justice, which are lower than market standard attorney’s fees.

Recent legislative amendments providing for an increased discretionary power for our judges in awarding attorney’s fees have led to a marked improvement of our legal cost awards, although these are still a fraction of the costs that a party is likely to bear for its attorneys.

Japan Small Flag Japan

At the time of filing a lawsuit, the plaintiff is eligible to incorporate, into the claims, a claim to the effect that the court costs shall be borne by the defendant, and if such claim is accepted in the judgment, the plaintiff is then allowed to require the opposing party to bear the court costs within a legally defined range. The court has the discretion to determine the respective shares of the court costs to be borne; however, in principle, the losing party often bears the court costs. The court costs here include the filing fees for the lawsuit and the appeal (i.e., revenue stamp fees), expenses for delivering documents, daily allowances for witnesses (if any), etc. but does not include attorneys’ fees.

When a lawsuit ends with a settlement, a shared burden of the court costs will also be negotiated.

Norway Small Flag Norway

The party regarded as having won the case in its ‘entirety’ or ‘in its essentials’, is entitled to compensation for legal costs from the losing party.

Legal costs include ‘all necessary costs relating to the case’, such as cost for legal counsel, travel costs, fees to experts etc., compare the Norwegian Civil Procedural Act section 20-5.

Poland Small Flag Poland

The prevailing party may request a reimbursement of legal cost, which consist of court costs (including court fees paid throughout the litigation in all instances, costs of court-appointed experts’ opinions) and attorney fees. The amount of attorney fees is limited by the official tables of charges, which are very low, and partially depend on the value of claims. The court decides on the amount of reimbursed attorney fees taking into account the complexity and value of the case, although the total amount cannot exceed six times the official charges. It translates to the reimbursement of up to EUR 2,500 if no monetary claims were pursued and up to EUR 37,500 where monetary claims exceeding PLN 5 million were pursued.

Portugal Small Flag Portugal

The winning party may ask the losing party to proceed with the payment of all the court fees paid by the wining party, plus 50% of all legal fees paid by the Claimant and by the Defendant to compensate the attorney’s fees, as well as the costs incurred in with translations, witnesses’ displacement, court’s advisor, experts (when the expertise is ordered by the court) and certificate fees (when ordered by the court).

Russia Small Flag Russia

Article 110 of the Arbitration Procedural Code states that the court orders loosing party to compensate costs of the winning party. The costs include compensation in full of court fees and expert fees, while expenses spent on attorney’s services is to be compensated in reasonable amount, i.e. usually court substantially deducts the attorney’s fee stating they are not reasonable. Normally court provides 7-20 thousand USD as partial recovery of attorney fees for the first instance proceedings in patent infringement cases. The Court should rule on its own on putting the costs for official fee and expert fee in the decision, while the matter with distribution of attorney’s fees is decided by the court only on request of a party. If this matter is not resolved by courts, an appropriate request can be filed with the court of the first instance within 6 months after the final court act on the substance came into force.

Singapore Small Flag Singapore

In our experience, a successful party will be able to recover about 30% to 40% of its legal costs from the losing party and 100% of court filing fees and reasonable disbursements from the other side. These costs are awarded on a standard basis (i.e. the winning party will be able to recover costs that were reasonably incurred and are reasonable in amount, and any doubts that the Court may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the paying party).

Where a party refuses to accept an offer to settle under Order 22A of the Rules of Court, and the terms of the offer to settle is just as favourable or more favourable than the judgment eventually ordered, the Court has the discretion to penalise the party who refused to accept the offer to settle with costs on an indemnity basis (i.e. the winning party will be able to recover all costs except those that have been unreasonably incurred or are unreasonable in amount, and any doubts which the Court may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party).

A Defendant may apply for a security for costs (“SFC”) order, which requires the Plaintiff to put up a certain amount of money as security / a guarantee for the Defendant’s legal costs in the event the Plaintiff loses his case. For the avoidance of doubt, the legal costs referred to here are Party-and-Party Costs (“P&P Costs”).

Usually, a losing party must pay the winning party’s P&P Costs. P&P Costs are not the legal fees a party pays to his lawyer, which are called Solicitor-and-Client Costs (“S&C Costs”). P&P Costs are not meant to compensate the winning party for his S&C Costs and are generally far lower than S&C Costs. However, P&P Costs still go some way towards the winning party recouping its expenses.

SFC applications are usually granted when the Court is persuaded that the Defendant will have difficulty obtaining P&P Costs from the Plaintiff if the Plaintiff’s claim fails. The grounds on which an SFC application can be sought is set out in Order 23 of the Rules of Court:

(a) where the Plaintiff is ordinarily resident out of the jurisdiction;

(b) where the Plaintiff is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so;

(c) where the Plaintiff’s address is not stated in the writ or other originating process or is incorrectly stated therein, and such failure to state the same is not made innocently nor without an intention to deceive; and

(d) where the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation.

Along with the grounds above, the Court will still have regard to all the circumstances of the case and order the SFC application if the Court thinks it just to do so.

The process of obtaining SFC is started by the Defendant writing to the Plaintiff requesting for security to be provided. If the Plaintiff refuses, the Defendant will have to make a formal application to Court by way of summons supported by affidavit. This affidavit will contain the Defendant’s reasons for wanting security to be provided and the amount of security sought. If the Court grants an application for SFC, the Plaintiff may provide security by way of depositing the sum of monies into an account held by the Singapore Court, or by way of a bank guarantee, or by way of a solicitor’s undertaking.

South Korea Small Flag South Korea

In theory, the losing party bears the “cost of the lawsuit” (including attorney’s fees recognized by the law) and court fees. However, in practice, only a nominal amount of attorney’s fees are recognized and allowed as the “cost of the lawsuit” under the Supreme Court Regulations.

Sweden Small Flag Sweden

The main rule is that the losing party must pay the winning party’s full reasonable litigation costs. The main factors considered regarding reasonableness are the value of the subject matter of the proceedings, the scope of the proceedings and if the costs have been reasonably motivated in order to safeguard the party’s interests. If the costs are disputed by the losing party, the Courts may award a lower figure but it is generally recognised that patent disputes are costly and reductions are moderate.

The winning party can recover costs for legal counsel, costs for evidence (e.g. experts) and the party’s own work.

Plaintiffs from a jurisdiction outside the EEA with which Sweden does not have an agreement on mutual recognition and enforcement of judgments, must, if the defendant so requests, provide security for litigation costs in Swedish courts if the claim is directed towards a Swedish person or company, or like party from within the EEA region.

Switzerland Small Flag Switzerland

The successful party can generally recover its party costs (including attorney’s fees and fees for retaining a patent agent) from the other party. In general, the successful party will not be able to recover all of its costs. It may expect to recover about 30 % to 50 %, unless the value in dispute is very high.

Further, the claimant will have to pay a court bond.

Taiwan Small Flag Taiwan

The successful party to a patent litigation action usually can only recover court fees and litigation expenses that are necessary for the litigation. However, under the Code of Civil Procedure, attorney fees at the third and final instance, which are limited to less than 3% of the value of the claims and the maximum amount cannot exceed NT$ 500,000, can be included as litigation expenses and shall be paid by the party who lost the litigation. Moreover, there are provisional remedies proceedings under the Code of Civil Procedure that enable parties to obtain security for costs.

Thailand Small Flag Thailand

In a civil patent litigation action, the court has discretion to award costs and attorney’s fees against the losing party, although the amount awarded is generally lower than the actual litigation costs incurred by the prevailing party. Also, the court does not always award the attorneys’ fees and costs for the prevailing party in every case.

Turkey Small Flag Turkey

According to the Civil Procedural Law, a losing party bears the judicial costs and the fixed attorney fee. To recover other costs, the requesting party must file another lawsuit with the compensation claim.

United Kingdom Small Flag United Kingdom

In accordance with the IP Enforcement Directive, the general rule is that unsuccessful party is responsible for paying the successful party’s legal costs relating to the dispute. As noted below, in practice a successful party will typically be able to recover the majority but not all of its legal costs.

However, the court has discretion to make such costs award as it sees fit under CPR 44. This may therefore mean that in the circumstances, due to poor conduct by the successful party, the costs awarded may be limited, or indeed no costs may be awarded at all in the most serious cases (though this is rare). The conduct taken into account by courts for this purpose includes the parties’ pre-action conduct, whether the PD on Pre-Action Conduct was followed, and the manner in which they conducted their cases.

In making an order as to costs, the court must consider the overriding objective that cases be dealt with ‘justly and at proportionate cost’. When considering whether costs incurred are proportionate, the court will consider: the amount in dispute; the value of any non-monetary relief sought; the complexity of the case; any additional costs relating to poor conduct on behalf of the unsuccessful party; and any other relevant factors in the circumstances. The general rule is that costs will be assessed on the standard basis, which allows for the recovery of proportionate costs. This may mean that some costs are not recoverable and others are reduced. Parties should expect that if costs are calculated on the standard basis, the successful party will recover 60-75% of its costs.

In assessing the proportion of its costs that a successful party may be able to recover, the court will typically consider the number of the issues on which that party succeeded, as well as the time spent at trial on the issues raised by each of the parties. One device that the unsuccessful party can use to limit the amount of recoverable overspend is to request detailed assessment of costs and the production of costs schedules. By setting out what time was spent on, the court may take the view that a lower percentage of costs should be recoverable. The successful party may resist this form of assessment though it will generally be granted if agreement on costs cannot be reached between the parties, particularly in high-value disputes.

Costs can be assessed on the indemnity basis if ordered by the court. A party has to ask for indemnity costs when the court makes a costs order. The key difference in this measure of assessment is that there is a presumption of proportionality in favour of the successful party. Whilst the successful party will recover a higher percentage of their costs than assessment on the standard basis, they are still unlikely to recover 100% of their costs (though will be much higher than, say, 70% recovery). If a patent is upheld as valid by the court, and another party subsequently challenges it, a ‘certificate of contested validity’ can be obtained by the patentee meaning that if the patent is upheld a second time, the challenger must pay the patentee’s costs on an indemnity basis.

In the IPEC, the court will follow the guidelines outlined above, bearing in mind that costs are subject to a cap of £50,000. Similarly, in multi-track cases worth up to £10 million, parties are required to file and exchange costs budgets estimating the costs they will incur at each stage of the litigation process, unless the court otherwise orders. A costs budget, once approved by the court, will in effect act as a cap on the costs recoverable by that party. So if parties incur more fees than they have budgeted for they may not be able to recover the costs above the cap (on the standard basis of assessment) unless they have had a revised budget approved or agreed by the court, they can justify the costs as an unexpected interim application reasonably not included in the budget (PD 7.9) or they can show good reason for going over the cap on a detailed assessment. There are serious consequences for failing to file a costs budget when they are required in a case: if that party is successful in the litigation, they will be unable to recover their costs from the other side.

United States Small Flag United States

The prevailing party in litigation (either patentee or accused infringer) may recover certain limited costs. Recoverable costs include document processing fees, court reporter and videographer costs, translation or interpretation costs, and basic witness fee amounts. Notably, attorneys’ fees are not recoverable unless the losing party’s conduct was egregious and the court orders an award of such fees, which is relatively rare. The recoverable costs are thus small in proportion to the overall cost of patent litigation. Consequently, parties usually do not engage in strategic decision-making with a goal of increasing recoverable costs in a case.

Vietnam Small Flag Vietnam

Yes, in principle, the plaintiff can recover reasonable legal fees as well as actual damages. The highest amount of legal fees that Vietnamese courts have ever awarded is around USD 30,000.

If the plaintiff does not prevail in the suit, the defendant can claim the legal fees that it spends on the suit.

The two parties can reach a settlement on the costs.

Updated: November 14, 2019