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Litigation costs in Dutch courts

There is a special provision in the law for the award of legal costs in lawsuits concerning the enforcement of intellectual property rights (IP). However, the court has sufficient room in its judgment on the award of legal costs to take into account all the circumstances of the individual case. This is demonstrated by the judgment in the proceedings between Samsung Bioepis and Novartis (Court of The Hague 31 May 2023, ECLI:NL:RBDHA:2023:7492

Litigation costs in IP cases

The main principle in proceedings before Dutch courts is that the winning party is entitled to an award of legal costs. In cases that do not relate to the enforcement of IP rights, a cost award is usually made on the basis of standard rates. Often it is only a small part of the actual costs incurred. 

In IP enforcement cases, if claimed the unsuccessful party is ordered to pay the reasonable and proportionate litigation costs incurred by the prevailing party, unless it is not reasonable in the specific case. This means that the court fees paid, as well as costs for engaging an attorney-at-law and patent attorney, must be paid by the unsuccessful party. That party therefore pays not only its own costs, but also a (large) share of the costs of its opposing party.

In practice, in most cases, the successful party is not reimbursed for the full costs. Judges use indicative rates, the amount of which is generally determined by the complexity of the case. However, the indicative rates in IP enforcement cases are much higher than the standard rates that apply in other proceedings.

Samsung Bioepis vs. Novartis

Also in the proceedings between Samsung Bioepis and Novartis in respect of a Novartis patent, the court had to rule on the litigation costs claimed by Samsung Bioepis. It was important to note that proceedings on Novartis’ European patent were already pending before the European Patent Office (EPO). Samsung Bioepis had that patent revoked and Novartis appealed that decision. During the appeal proceedings, Samsung Bioepis decided, without prior notice to Novartis, to also initiate proceedings before the Dutch courts to revoke the Dutch part of the European Patent. However, even before Novartis became aware of the court proceedings, it had already withdrawn its appeal against the EPO decision. The judge ruled that in this case Novartis could not have suspected that Samsung Bioepis intended to initiate the invalidity proceedings in court. Therefore, the court ruled that Samsung Bioepis took the risk of initiating unnecessary proceedings and ordered it to pay the legal costs of the proceedings.  Even though Samsung Bioepis could be seen as the winning party in the invalidity proceedings.

Conclusion

For holders of IP rights, initiating proceedings can be a valuable means to enforce these rights. A significant part of the litigation costs can be recovered by the winning party. In most cases, however, the full costs are not reimbursed. Moreover, the court has the discretion to deviate from the main principle in a specific case.

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