Costs and security for costs: what the decision maker looks at
A decision-maker granting security for costs weighs the applicant's ability to meet an adverse costs order, the respondent's real exposure if it wins, the strength of the claim as shown so far, and whether the forum permits such an order at all. No factor decides the outcome alone; the assessment is comparative, not automatic.
How the decision-maker weighs the application
Security for costs is not a penalty. It protects a respondent from paying to defend a patent claim and then finding nothing to recover if it wins. The order shifts the financial risk of an unsuccessful claim back onto the party bringing it, before the dispute reaches a full hearing. The decision-maker treats the request as preliminary and looks at a small set of recurring factors, none of which is decisive on its own.
| Factor | What is checked | Typical effect on the decision |
|---|---|---|
| Financial standing of the claimant | Whether the claimant can pay a costs order if the claim fails, judged from public filings, funding arrangements or its known asset base | Weak standing supports an order |
| Location of assets | Whether recoverable assets sit inside the forum's jurisdiction or would need cross-border enforcement | Assets held abroad support an order |
| Merits shown so far | Whether the claim, on the papers filed, looks strong enough to proceed without extra protection | A visibly strong claim weighs against an order |
| Litigation funding | Whether a third party is funding the claim, and what that funder has agreed to cover | Funded claims without matching cover support an order |
| Timing of the request | Whether the application is made promptly, before substantial costs have already been incurred | Late requests are treated with more caution |
Steps to take before you file
- Instruct counsel to map every ground for the application before drafting it. A request built on one weak factor rarely succeeds on its own.
- Ask your finance team to prepare a short summary of the claimant's known financial position, including any public accounts.
- Have counsel identify where the other side's recoverable assets are actually held, not just where it is registered.
- File the application early, ideally before the other side has spent materially on its defence.
- Prepare a fallback position, such as a partial or staged security order, in case the forum rejects a full one.
Who decides, and on what timetable
The forum already handling the underlying patent dispute also decides the security application; it is not referred elsewhere. Most forums deal with it as a preliminary matter, on the papers, without a full hearing unless the facts are genuinely disputed. A ruling normally arrives before the substantive case moves to its next stage, so both sides know the financial terms before further costs are committed.
If a different situation applies to you
If you are the party asking for security, build the application around whichever factor is strongest in your case, rather than listing all four evenly. If you are the party facing the request, address financial standing directly rather than disputing the merits alone; forums often treat an unanswered standing point as conceded. If the other side is based outside the country hearing the case, expect the location-of-assets factor to carry more weight than usual.
A comparable cost-exposure question can arise outside patent disputes. See When a licence terminates but the token remains and for how the same logic plays out in a licensing dispute.
What this page does not cover
This page explains the factors a decision-maker weighs. It does not set out the exact procedural rule, fee scale or filing deadline used by a given forum, because these vary by jurisdiction and by the specific body hearing the dispute. It does not cover appeal routes against a security order, and it does not calculate the amount a forum is likely to order.
If your name later appears in a due-diligence or dispute report connected to this matter, If you are named in a report in detail sets out what you can ask to see and correct.
Sources and limit
This overview reflects how forums in patent disputes generally approach security-for-costs applications. It does not cite a specific article, rule number or fee schedule, because none is confirmed at the level this page relies on. Where a number or a deadline matters to your case, check it against the forum's own published rules before you act. Last checked: April 2025.
Where the opposing party's registration details have shifted since the dispute started, our Counterparty report when the counterparty changes name in practice can confirm current standing before you rely on it in a security application.
Related reading
Related: Stay pending validity step by step covers a different preliminary question that often arises in the same dispute.
FAQ
How long does costs and security for costs take in practice?
Most forums decide a security application within weeks rather than months, because it is treated as preliminary. A contested application, or one raising a disputed financial position, takes longer than an uncontested one.
Which documents are needed to start?
You need the underlying claim or defence, a statement setting out the factor relied on, and supporting evidence, typically financial filings, funding agreements or asset-location records. Counsel should confirm the exact list against the forum's own filing requirements.
What happens if the other side does not respond?
A forum can decide the application on the papers filed, treating silence as a failure to engage rather than as agreement. This does not guarantee the order is granted; the decision-maker still checks the factors against the material before it.
If the dispute you are facing is not about costs but about who owns the underlying right, When a contractor claims ownership of the code and sets out the first steps to take.