No need to open books in order to prevent a security for party compensation

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Case No. O2020_004 | Order of 3 March 2021 | ‘Security for party compensation’

The defendant in this infringement case had requested that the plaintiff be ordered to provide a security for its party compensation in case of failure of plaintiff’s complaint. Art. 99 CPC indeed provides for this, as follows:

At the request of the defendant, ...

… the plaintiff must provide security for party costs:

    1. if he or she has no residence or registered office in Switzerland;
    2. if he or she appears to be insolvent, notably if he or she has been declared bankrupt or is involved in ongoing composition proceedings or if certificates of unpaid debts have been issued;
    3. if he or she owes costs from prior proceedings; or
    4. if for other reasons there seems to be a considerable risk that the compensation will not be paid.

Swiss patent troll?

None of lit. a.-c. was applicable, but defendant argued extensively under lit. d that there was still a considerable risk that the compensation will not be paid. Essentially, defendant argued that the plaintiff is a non-practicing entity (NPE), aka patent troll. What is more, the plaintiff only holds a single European patent, i.e. the patent in suit. The defendant argued that in case of failure of the complaint — in particular for invalidity, as asserted by the defendant—, plaintiff’s only asset was shattered. In the defendant’s view, the plaintiff has manoeuvred itself into a situation where losing is a no-go. The dismissal of the claim would very likely mean bankruptcy for the plaintiff; and the party compensation would not be recoverable anymore.

In first place, the order holds that the reasons invoked under lit. d need to be of comparable severity to lit. a-c, in order to not run against the ratio legis (BGE 141 III 155, ¶4.2).

Second, it is held that ‘full conviction’ (volle Überzeugung) is the applicable standard of proof:

Accordingly, this did not play out to the defendant’s advantage. The President was not fully convinced that the plaintiff would not be able to pay the party compensation if necessary.

Further, the defendant has apparently requested that the plaintiff be ordered to open its books to allow for an assessment of whether or not the party compensation would be affordable. Indeed, there is a duty of cooperation foreseen in Art. 160 CPC, and in particular lit. b might read on this. However, the President held that defendant’s arguments were too vague for such a drastic step. Deciding otherwise would effectively mean that a non-practicing entity would always have to open its books in order to prevent a security for party compensation.

There is an interesting sidenote in the order which, in my reading, signals some sympathy for the plaintiff’s concerns and the request for a security (de lege lata, …). But, unfortunately(?), the law as it stands does not allow for it, based on the facts and arguments on file (de lege lata, …).

Decoding of the anonymization is still ongoing. Stay tuned.

Reported by Martin WILMING


Case No. O2020_004 | Order of 3 March 2021 | ‘Security for party compensation’


Single Judge:

    • Dr. Mark SCHWEIZER


  • Court Clerk:
      • Susanne ANDERHALDEN


  • Representative(s) of Plaintiff:


  • Representative(s) of Defendant:
      • Dr. Simon HOLZER (MLL)
      • Louisa GALBRAITH (MLL)
      • Dr. Kurt SUTTER (Blum), assisting in patent matters
      • Martin TOLETI (Blum), assisting in patent matters





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