Merck KGaA (Respondent/Appellant/Claimant) v Merck Sharp & Dohme Corporation and Others (Appellants/Respondents/Defendants)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Kitchin,Lord Justice Floyd,Lord Justice Patten,and |
| Judgment Date | 24 November 2017 |
| Neutral Citation | [2017] EWCA Civ 1834 |
| Docket Number | Case No: A3/2016/1428 and A3/2016/1442 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 November 2017 |
[2017] EWCA Civ 1834
Lord Justice Patten
Lord Justice Kitchin
and
Lord Justice Floyd
Case No: A3/2016/1428 and A3/2016/1442
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (INTELLECTUAL PROPERTY)
THE HON MR JUSTICE NORRIS
Royal Courts of Justice
Strand, London, WC2A 2LL
Adrian Speck QC and Benet Brandreth (instructed by Bird & Bird LLP) appeared on behalf of the Respondents (Appeal 2016/1428)/Appellants (Appeal 2016/1442)/Claimant
Geoffrey Hobbs QC and Guy Hollingworth (instructed by Linklaters LLP) appeared on behalf of the Appellants (Appeal 2016/1428)/Respondents (Appeal 2016/1442)/Defendants
Hearing dates: 19/20/21 June 2017
Judgment Approved
Introduction
These are appeals against the judgment of Norris J given on 15 January 2016 ( [2016] EWHC 49 (Pat)) and his consequential order in these proceedings which concern a dispute between the parties about the use of the word "Merck" in connection with their respective pharmaceutical businesses.
In 1668 an apothecary's shop opened in Darmstadt, Germany. It was the start of a family business conducted under the name "E. Merck". The business was very successful and grew substantially over the years, establishing its own manufacturing facilities and developing markets in a number of countries. In 1889 a member of the family established another business in the USA which was economically supported by but not part of the family business. In time this further business was incorporated as "Merck & Co., Inc.". It too was very successful and established its own manufacturing facilities and developed markets in the American continent. By the end of the Great War these two businesses were run separately but cooperated together over their use of the word "Merck". In broad terms the American business used the word "Merck" in the USA (including its territories and dependencies) and in Canada; and the original German business used the word "Merck" in the rest of the world.
For the purposes of these proceedings it may be taken that the claimant is the successor of E. Merck and the defendants are the successors of Merck & Co., Inc. The judge referred to the claimant as "Merck Global" and to the defendants collectively as "Merck US". Save where from the context otherwise appears, I shall do the same.
Merck Global and Merck US have, from time to time, made agreements in an attempt to regularise their respective uses of the word "Merck" and avoid the risk of confusion and conflict between them. They made their first formal agreement in 1932. This agreement, termed "the Treaty Agreement", recognised the right of Merck US to the exclusive use of the word "Merck" in the USA and Canada, and the right of Merck Global to the exclusive use of the word "Merck" in the rest of the world.
The Treaty Agreement did not survive. It was attacked by the US Department of Justice under the Sherman Anti-Trust Act and in 1945 it was cancelled by a consent decree in the New Jersey District Court. This decree contained provisions which required Merck US to file with the Department of Justice notice of an intention to make any other agreement with Merck Global relating to or affecting its business policy.
By this time, Merck Global, as the older business, held trade mark registrations in many countries of the world outside the USA and Canada. Over the next few years both Merck Global and Merck US sought to develop their businesses within and beyond their home territories. Clashes between them were inevitable and litigation ensued. In 1953 Merck US merged with Sharpe & Dohme, a US pharmaceutical company with a large foreign business. Merck US wanted to take advantage of and expand this business and so it made vigorous attempts to secure the right to use the "Merck" trade mark around the world. But it had only modest success in light of Merck Global's earlier trade mark registrations.
Nevertheless, the parties did communicate and, from time to time, meetings took place between them. By 1948 they had recognised the distinction between the use of a word as a trade mark and its use as the name of a business and, at a meeting in Germany in the autumn of that year, Merck US expressed agreement with Merck Global's view that its ownership of a registered trade mark for the word "Merck" could not restrain Merck Global from using that word as or as part of its corporate or business name. This was one of the matters the parties had in mind when, in September 1955, they met to discuss further proposals for co-operation.
By 10 September 1955, the parties had reached an understanding that if Merck US wanted to use its corporate names "Merck & Co., Inc." and "Merck & Co. Limited" outside the USA then Merck Global would consent provided that each such name was geographically identified with the USA. For its part, Merck US would consent to the use by Merck Global of its corporate name in the USA if used with the geographical identifier "Darmstadt, Germany". A memorandum of these discussions states:
"It was understood that as to E. Merck's names and Merck & Co's names we were speaking of use as a corporate name and firm name and not as a trademark."
Two days later, on 12 September 1955, the parties signed an agreement in writing ("the 1955 Agreement"). This forms an important part of the history and so I must set out its material terms. In doing so, I shall retain the names of the parties as they appear in the agreement. But it may be taken that references to "E. Merck" are to Merck Global and references to "Merck & Co" are to Merck US. After a number of definitions which I need not recite, the agreement provided, in material part:
"United States and Canada.
2.) a) Merck & Co. will not object to the use in the United States and Canada by E. Merck of "Emanuel Merck offene Handelsgesellschaft" or "E. Merck A. G." as all or part of a firm-name or corporate name provided such names are geographically identified with Germany as follows: "Emanuel Merck offene Handelsgesellschaft, Darmstadt, Germany" and "E. Merck A. G., Darmstadt, Germany" all words being given equal prominence.
b) E. Merck recognizes the exclusive right of Merck & Co. to the use of the trade-mark Merck in the United States and Canada and in such countries will not use or attempt to acquire rights in any trade mark containing Merck.
Germany
3.) a) E. Merck will not object to the use in Germany by Merck & Co. of
(i) Merck & Co. Inc. or Merck & Co. Limited as all or part of a firm name or corporate name provided such names are geographically identified with the United States or Canada as follows: "Merck & Co. Inc., Rahway, N. J., U.S.A.", and "Merck & Co. Limited, Montreal, Canada", all words being given equal prominence.
(ii) "Merck-Sharp & Dohme" as all or part of a firm name, corporate name or name of a corporate subdivision, provided such names are geographically identified with a country other than Germany, all words being given equal prominence.
b) Merck & Co. recognizes the exclusive right of E. Merck to the use of the trade-mark Merck in Germany and in such country will not use or attempt to acquire rights in any trade mark containing Merck.
All other countries.
4.) In all other countries E. Merck recognizes that "Merck-Sharp & Dohme" as a trade-mark or name is not confusingly similar to any of the trade marks or names used or owned by E. Merck and E. Merck will not object to Merck & Co.'s use and registration of Merck-Sharp & Dohme as all or part of a trade-mark, trade name or corporate name. When requested E. Merck shall so state in writing. The embellishments of design of such trade marks shall not imitate marks owned by E. Merck.
5.) In all other countries E. Merck will not object to the use by Merck & Co. as all or part of a firm-name or corporate name of "Merck & Co. Inc." used in association with words such as "Rahway, N.J., U.S.A." which identify it geographically with the United States or "Merck & Co. Limited" used in association with words such as "Montreal Canada" which identify it with Canada, all words being given equal prominence.
6.) In all other countries Merck & Co. recognize that E. Merck is entitled to use the word Merck or combinations such as E. Merck as a trade-mark or name provided that any such marks or names adopted in the future shall not be confusingly similar to marks or names adopted or used by Merck & Co. under Paragraphs 4 and 5 above. When requested Merck & Co. shall so state in writing.
7.) In all other countries Merck & Co. shall promptly and in any event no later than three years after the effective date of this agreement cancel all existing registrations, withdraw all applications and discontinue all use of the trademarks Merck, Merck Cross and MerckMerckMerck.
8.) In all other countries Merck & Co. shall promptly and in any event no later than three years of the effective date of this agreement discontinue all use of the following corporate names:
Merck (Pan America) Inc.,
Industrias Farmacéuticas Merck (Norte Americana) S.A.
Merck & Co. (Great Britain) Ltd.
9.) …
b) It is understood that the requirements of paragraphs 8 … hereof will be fulfilled whereever the words "Merck-Sharp & Dohme" are substituted for the word "Merck".
…
11.) Merck & Co. and E. Merck will cooperate in the prompt termination of all litigation now pending between them involving trade-marks or trade names containing Merck. Each party will defray all expenses previously incurred to include such expenses as have already been paid or are still to be paid in compliance with a court decree already issued."
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