Context: On July 6, 2026, patent monetization company Nixu brought an infringement action against four Amazon Web Services entities before the UPC’s Milan Local Division (LD) (July 7, 2026 ip fray article).
What’s new: The UPC’s Milan LD has dismissed Amazon’s request for €600,000 in security for costs under Rule 158 of the Rules of Procedure (RoP), finding that a guarantee issued by Nixu’s parent company, Sauvegarder Investment Management (SIM IP), sufficiently addressed concerns about recovering a potential costs award. The court held that the possibility of enforcing the guarantee in the U.S. and its application of Texas law did not, without concrete evidence of enforcement difficulties, justify ordering security.
Direct impact: While Nixu avoids having to provide the €600,000 in security requested by Amazon, the latter remains entitled to appeal the order within 15 days of its service. The costs associated with the application will be addressed in the final decision in the main proceedings.
Wider ramifications: The ruling may offer patent monetization entities greater flexibility in addressing security-for-costs applications, particularly where their operations depend on external financing. It also represents a procedural win for SIM IP, which has reported other business successes this year, including securing $100 million in insurance-backed financing (September 14, 2026 ip fray article). However, the effectiveness of a parent-company guarantee remains subject to a case-specific assessment of the guarantor’s financial position and contractual obligations.
Amazon challenges Nixu’s financial position
Amazon characterized Nixu as a recently established patent monetization entity with no demonstrated independent income or readily available assets. It pointed to Nixu’s financing arrangements with its parent company, SIM IP, under which substantially all of Nixu’s present and future assets, including its patent portfolio and licensing revenues, had been pledged as security. Amazon argued that these arrangements raised doubts about whether Nixu’s assets could be used to satisfy a future costs award.
Nixu disputed those concerns, arguing that Amazon had provided no concrete evidence of financial distress or unpaid obligations. It emphasized the value of its patent portfolio and the financial resources of SIM IP, which had issued a guarantee covering Nixu’s litigation-cost obligations.
Parent-company guarantee defeats security request
Under Article 69(4) of the UPCA and Rule 158 RoP, the court must assess whether a claimant’s financial position gives rise to a legitimate and real concern that a potential costs award may not be recoverable or enforceable, or that enforcement may be unduly burdensome. Drawing on the Court of Appeal’s (CoA’s) reasoning in Syntorr v. Arthrex, which concerned litigation insurance, the Milan panel held that the same approach could extend to third-party guarantees, including those issued by a claimant’s parent company.
The court placed particular weight on the guarantee’s creditor-oriented features and the fact that SIM IP’s solvency was not disputed. The guarantee treated the parent company as a primary obligor, rather than merely a surety, and allowed beneficiaries to seek payment directly without first pursuing Nixu’s assets. It also contained unconditional payment obligations, provisions preserving coverage despite termination or insolvency, and a defined payment mechanism.
The panel acknowledged two potential concerns:
- the guarantee’s requirement for a final costs order, which could delay payment pending an appeal; and
- its application of Texas law, which could complicate enforcement.
However, it found neither sufficient to establish a genuine risk of non-recovery or unduly burdensome enforcement. The court further emphasized that the possibility of enforcing a costs award outside the UPC’s territory, including in the U.S., could not justify security without concrete evidence of actual enforcement difficulties.
Earlier Hamburg order highlights significance of new guarantee
The Milan decision contrasts with an earlier order issued by the UPC’s Hamburg LD on June 10, 2026, in separate infringement proceedings brought by Nixu against Infoblox and other defendants (February 1, 2026 ip fray article). In that case, the Hamburg court ordered Nixu to provide security for costs after examining its financial position. The Milan panel acknowledged that assessment but identified a material difference: Nixu had introduced a parent-company guarantee that it had not relied upon in the Hamburg proceedings.
Although the two decisions reached different outcomes, the Milan panel did not reject the Hamburg court’s earlier findings. Instead, its consideration of the additional guarantee illustrates how the evidence presented in individual proceedings can affect the application of Rule 158, even where the same claimant is involved.
Court and counsel
The UPC’s Milan Local Division panel: Judge-rapporteur Pierluigi Perrotti, Judge Alima Zana, and Judge Daniel Severinsson.
Nixu FL IP Protection LLC is being represented by Saglietti Bianco’s Emanuela Bianco, Studio Galli Avvocati’s Raimondo Galli, and Thum & Partner’s Bernhard Thum.
Meanwhile, Amazon Web Services and the other defendants are being represented by Hoyng ROKH Monegier’s Klaus Haft.