Merck KGAA v Merck Sharp & Dohme LLC (formerly Merck Sharp & Dohme Corporation)

Hearing dates: 12 th, 13 th and 18 th December 2023

Remote hand-down: This judgment was handed down remotely at 10.30am on Friday, 12 ^th April 2024 by circulation to the parties and their representatives by email and by release to the National Archives.

Index

Introduction

This is my reserved judgment on the application of the Claimant, Merck KGaA, for declaratory relief ( “the Application”). The declaratory relief sought is an order declaring that one or more of the First, Second and Fifth Defendants are in breach of an order in this action made by Sir Alastair Norris on 28 ^th July 2020. The Application is expressed to be made pursuant to the court's power to grant declaratory relief under CPR 40.20 and pursuant to a provision in the order granting permission to apply.

In broad terms the Claimant and the Defendants operate pharmaceutical businesses. By claim form issued on 8 ^th March 2013 the Claimant commenced this action ( “the Action”) against the Defendants, alleging breach of contract and infringement of the Claimant's trade marks. The essential dispute between the parties concerned the use of the name and trade mark “ Merck”, in connection with their respective pharmaceutical businesses.

The procedural history of the Action is complicated. The Action came on for trial before Norris J in April 2015. Norris J handed down judgment on the trial on 15 ^th January 2016. Both sides appealed to the Court of Appeal. The appeals were heard in June 2017, and judgment was handed down on 24 ^th November 2017. The substantive judgment was given by Kitchin LJ (as he then was), with whom Patten and Floyd LJJ agreed. By their order of 24 ^th November 2017 the appeals were allowed in part, and certain issues were remitted to Norris J for rehearing.

The remitted hearing came before Sir Alastair Norris (as he had become) in July 2018. Sir Alastair handed down judgment on the remitted issues on 20 ^th May 2020. There were then further written submissions made by the parties on the form of the order to be made, consequential upon the judgment on the remitted issues. On 29 ^th July 2020 Sir Alastair handed down a further judgment, dealing with the terms of the order to be made.

The overall result was the order of 28 ^th July 2020 ( “the Order”). I will need to come back to what was decided by Sir Alastair in his various judgments and by Kitchin LJ in the Court of Appeal. For the purposes of this introduction, it is only necessary to set out paragraphs 2 and 3 of the Order (as amended), which provide as follows (I have added italics to quotations in this judgment):

“2. The First Defendant shall not in the United Kingdom (whether acting by its directors, officers, employees, agents, or otherwise howsoever) breach clause 7 of the 1970 Agreement by the use within the United Kingdom of (a) the trade mark “Merck” and/or (b) the word “Merck” as a contraction of its corporate name or as a trade or business name (either alone or in combination with other words in formulations not permitted by or without the distinguishing signifiers required by the Agreement) when furthering or promoting its business to third parties.

3. At The Defendants and each of them shall not (whether acting by their directors, officers, employees, agents or otherwise howsoever) infringe UK trade marks Nos. 1123545 and 1558154, and International registered marks (UK) Nos. 770 038 and 770 116 by using the sign MERCK as a trade mark in the course of trade in the United Kingdom.”

Paragraphs 2 and 3 of the Order are subject to paragraph 4 of the Order which, by way of qualification or carve out, contains a series of sub-paragraphs setting out circumstances which do not constitute a breach of either paragraph 2 or paragraph 3. Certain of the provisions of paragraph 4 of the Order played a central role in the arguments on the Application. The relevant Defendants rely, in particular, upon sub-paragraphs (b), (d) and (h) of paragraph 4, which identify the following circumstances as not constituting a breach of paragraph 2 or 3:

“b. For the Defendants to establish and maintain any “MSD branded” UK-specific websites with links to a website at the domain merck.com (which website uses the mark “Merck” as that mark may lawfully be used within the Permitted Territories in accordance with the Agreement) provided that the use of the link automatically generates a pop-up on the link which informs the user that they are leaving an ‘MSD’ website, will be landing on a site intended for residents of the Defendants' Permitted Territories, and that the company is known as MSD everywhere, except in the Defendants' Permitted Territories where it is known as Merck & Co Inc Kenilworth, NJ USA.”

“d. For the Defendants to use, in the ordinary course of business, email addresses ending “@merck.com” for employees based outside the United Kingdom.”

“h. For the Defendants inadvertently to act in breach, if the error is corrected within 7 days of notification in writing by the Claimant to the Defendants or their solicitors, or of the Defendants otherwise becoming aware of such inadvertent error.”

The Claimant's case in the Application is that the First Defendant has breached paragraph 2 of the Order, by the use of “ Merck” as a trade mark and name, in breach of the restrictions in paragraph 2, and that the First, Second or Fifth Defendants have breached paragraph 3 of the Order, by infringing the Claimant's trade marks. The alleged breaches are set out in an Annex 2 ( “Annex 2”). Annex 2 is one of two annexes to the Application for Declaratory Relief (effectively a statement of case in support of the Application) which accompanies the application notice by which the Application has been made.

The First, Second and Fifth Defendants deny, on various grounds, that they have breached the Order. In common with their counsel, I will refer to the First, Second and Fifth Defendants, collectively, as “the MSD Defendants”.

In theory, and given the Claimant's case that the MSD Defendants are in breach of the Order, the Application could have been made as a contempt application. For the reasons explained in its submissions in support of the Application, the Claimant has confined the Application to a claim for declaratory relief. One of the issues between the parties in the Application is the question of the extent to which I should grant declaratory relief. The position of the MSD Defendants is that I should confine myself to the grant of declaratory relief in relation to the construction of the relevant provisions of the Order, and that I should not venture into the question of whether the Order has been breached.

The scope...