Orderly Mind Limited v Queue-It ApS (incorporated under the laws of Denmark)

When revising a costs budget, the court must identify a significant development and costs that could not reasonably have been foreseen when the original budget was approved. In deciding security for costs, the court must exercise its discretion proportionately, considering the claimant’s means, whether security would stifle the claim, existing security, alternative security and the parties’ Article 6 rights. A claimant relying on stifling must provide full and candid financial evidence. Security may be protected by a debenture and personal undertakings where the claimant’s business depends on assets held by its director or another related person.

The claimant brought patent infringement proceedings concerning EP (UK) 1,751,954 against a Danish defendant, with a related company joined as a third party. The defendant counterclaimed for invalidity and unjustified threats.

The judgment determined applications arising from amendments to the infringement case, including a responsive statement of case, revision of the defendant’s costs budget, additional security for costs and consequential directions. The central issues were whether the amended case constituted a significant and unforeseeable development, and whether further security would stifle the claim.

1. Costs budget. Under Civil Procedure Rules 1998, rule 3.15A, an increase required a significant development and costs which could not reasonably have been foreseen. The claimant’s evolving infringement case was a significant development. It created additional interaction between construction, infringement and validity, including possible Gillette/Formstein defences. The defendant’s budget was increased, but by £465,000 rather than the full amount sought. A responsive statement of case was allowed at a reasonable cost of £22,000.
2. Security for costs. There had been a material change of circumstances since the earlier orders. The court’s discretion was governed by the principles summarised in Pisante v Logothetis [2020] EWHC 3332 (Comm) and Stokors SA v IG Markets Ltd [2012] EWHC 1684 (Comm). In accordance with Al-Koronky v Time-Life Entertainment Group Ltd [2006] EWCA Civ 1123, security should not be ordered at a level the claimant could not afford, but a claimant asserting stifling must give full and candid evidence of its means. The discretion also engaged the claimant’s Article 6 rights.
3. The claimant’s evidence showed continuing monthly profits, ownership of the core software by its director, Mr King, and Mr King’s substantial personal assets. An additional £343,000 would therefore not stifle the claim. The proposed debenture over the claimant’s assets was acceptable only if supported by personal undertakings preserving the value of the software and the exclusive licence to the operating subsidiary.
4. The claimant was given an election between making further payments totalling £343,000 and providing the executed debenture with the specified undertakings. Permission to apply was granted concerning implementation. Remaining directions and costs issues were left for finalisation by order.

First-instance case management and security-for-costs decision in the High Court (Patents Court). The judgment describes earlier orders for security but gives no citation for them.