What happens to costs already paid when the appeal reverses the underlying judgment? LD Düsseldorf on R. 151 RoP (UPC_CFI_1110/2025, UPC_CFI_1111/2025)

At first instance, the Local Division Düsseldorf in October 2024 (UPC_CFI_1110/2025) had decided the infringement action concerning EP 3 926 698 B1 (LED technology) in favor of Seoul Viosys. The defendants, expert e-Commerce and expert klein, were ordered to pay costs. A decision fixing those amounts was issued in April 2025 and the defendants duly paid. 

The Court of Appeal then reversed the first-instance decision in its entirety in October 2025. It declared claims 1, 4, 5, 6 and 9 of the patent invalid across eight UPC contracting states and reassigned the full costs of both instances to the claimant. 

The defendants subsequently filed a cost assessment application seeking not only reimbursement of the costs they had already paid under the first-instance cost decision, but also recovery of their own first- and second-instance costs. The claimant disputed the claim, arguing that a cost assessment procedure could only address costs imposed by a substantive decision, but not refunding of amounts previously disbursed. The Local Division rejected that argument. It reasoned that, once the Court of Appeal amends a cost order, the first-instance cost assessment decision, which was itself conditional on that order, loses its legal basis. Any amounts already transferred on that basis therefore become recoverable as part of the costs of the post-appeal cost assessment proceedings. 

Further, regarding the scope of an agreement on recoverable costs, which the parties had concluded at the first-instance oral hearing, the LD further clarified that such an agreement covers only the instance for which it was made. Since the agreement had been reached based on estimated first-instance costs, and because it was unclear at the time whether an appeal would even occur, the defendants could not rely on it to fix the recoverable appeal costs at the same level. Appeal costs were therefore assessed on the basis of actual, reasonable expenditure, while the first instance was assessed based on the agreement made.

Key takeaway

The decision confirms that the UPC cost assessment framework is designed to follow the final outcome of the proceedings, including reversals on appeal. Parties who receive cost reimbursements at first instance should be aware that those amounts remain at risk if an appeal is pending. Equally, cost agreements should be drafted with precision with respect to the instance(s) they are intended to cover. As a rule, an agreement concluded on the basis of first-instance cost estimates will not automatically extend to appeal proceedings, which may involve different duration and expenses. Practitioners should factor this in their litigation budgeting, risk assessment and strategy from an early stage.