Merck Kgaa v Merck Sharp & Dohme LLC

Hearing dates: 8–11 and 16 July 2025

Approved Judgment

This judgment was handed down remotely at 10 a.m. on 19 September 2025 by circulation to the parties or their representatives by email and by release to the National Archives

Introduction

This is an inquiry into damages following a protracted dispute between the parties concerning the rights to use the word “Merck” in the UK. The parties, which are both multinational companies in the life sciences and healthcare sectors, have a common heritage and were historically both run by members of the Merck family. I will refer to the claimant as Merck and the defendants collectively as MSD.

The present litigation commenced in 2013, and has been the subject of judgments of the High Court and Court of Appeal as summarised further below. Ultimately, following a trial and further hearing before Norris J, MSD was found to have breached a 1970 agreement between the parties, and infringed Merck's marks, by the use of the word “Merck” in the UK. On 28 July 2020 Norris J granted various declarations and injunctions, and ordered an inquiry as to damages.

Merck seeks damages on the basis of a reasonable royalty under a notional (fictional) licence negotiated between the parties, permitting MSD to perform acts otherwise prohibited by contract or by Merck's trade mark rights. On that basis its pleaded claim was for damages of approximately £50.5m. By the start of this hearing that had reduced to £46.1m. That headline figure relied on Merck's analysis of comparable licences. For the reasons discussed further below, by the closing submissions Merck's focus was on an alternative economic benefits approach to the licence fee valuation, which it contended indicated a damages figure of around £18.7m.

MSD's position was that the present case is not appropriate for an award of licence fee damages at all, whether calculated on a comparables approach or an economic benefits approach. In the alternative, MSD contended that Merck's comparables analysis was fatally flawed, leaving the economic benefits approach as the only meaningful basis for assessment. Calculated on that basis, MSD's submission was that the appropriate licence fee calculation should be no more than around £2.2m plus interest.

At the hearing, Mr Brandreth KC and Mr Ivison represented Merck; Mr Hobbs KC and Mr Hollingworth represented MSD. Shortly after the hearing the parties provided brief further submissions on the issue of the discount rate, in light of the parties' positions in their closing submissions. On 5 September 2025 the parties provided, at the request of the court, some further calculations on specific figures forming part of the notional licence fee calculation.

Witnesses

Merck's witnesses of fact

Merck relied on the evidence of four witnesses of fact. Ultimately MSD only sought to cross-examine one of them, Ms Vittinghoff, and did not challenge any part of the evidence of the other three witnesses.

Jonas Koelle has worked for Merck since 2002 and has been head of its trade marks department since 2014. He provided two witness statements for this trial addressing, in particular, the nature and extent of the conduct of MSD regarded as objectionable by Merck, his involvement with Merck's rebranding exercise from 2013 onwards, the various trade mark licences granted by Merck (including within the Merck group of companies on transfer pricing terms), and how Merck would have viewed the prospect of granting a licence to MSD to cover MSD's acts amounting to breaches of contract and trade mark infringements in the UK.

Katrin Menne joined Merck in 2014 as a project manager for its rebranding exercise, and is now head of brand and content marketing. She provided a short witness statement with evidence about Merck's use of social media and internet marketing, and an estimate of the costs to Merck of maintaining two mirrored websites (one for the USA/Canada and another for the rest of the world).

Frank Sielaff is an external consultant to Merck, who previously worked at Merck between 2005–2019, eventually becoming director and head of its digital reputation and web platform department. He provided a short witness statement addressing Merck's use of internet analytics tools (specifically Google Analytics, SEMrush and SimilarWeb) to gather and compare web traffic data for Merck's websites as well as competitor sites, including MSD websites.

Undine Vittinghoff has been the director of Merck's tax department since 2010. In 2014 Ms Vittinghoff co-authored a report for Merck analysing the company's umbrella brand from a transfer pricing perspective. She provided a witness statement on the background and purpose of that report, and was cross-examined on this (by Mr Hobbs) for almost half a day. While her witness statement was given in English and her cross-examination was also conducted in English, she was occasionally assisted by a German interpreter. She was a straightforward witness who gave helpful answers that were not materially challenged by Mr Hobbs.

MSD's witnesses of fact

MSD relied on the evidence of five witnesses of fact, all of whom were cross-examined by Merck.

Anita Parfitt has worked for MSD since 2016 and is now its international data strategy and innovation lead, specialising in data analytics across MSD's websites, social media and other promotion channels. She provided two short witness statements addressing the regulatory framework governing the promotion of pharmaceutical products in the UK, MSD's UK marketing activities including its use of websites and social media, and the way in which the list price of products is determined. She was cross-examined briefly (by Mr Ivison), during which she gave apparently straightforward answers, albeit that she frequently responded that the questions put to her concerned matters falling outside her role, which she was therefore unable to answer. Ultimately her evidence was not very useful for the issues for determination in this case.

Kyra Lanza has worked for MSD since 2010 in various roles, and is now an Associate Vice President dealing with MSD's ESG strategy and engagement, responsible for MSD's company brand at an enterprise level, including consideration of how that brand is perceived by the general public. She provided a short witness statement addressing the changes made to MSD's websites, email addresses and social media sites as a result of these proceedings, as well as commenting on MSD's marketing strategy during that period. Ms Lanza was cross-examined for about an hour (by Mr Brandreth) on MSD's geo-blocking and the company's migration of email addresses in the UK. It became apparent that her witness statement had provided information about the costs of Merck's email migration, in circumstances where that information was not within her knowledge but had been supplied by her solicitors Linklaters, and was materially inaccurate. She was highly defensive when asked about this, and displayed considerable reluctance to engage with the problems with this part of her evidence. Unfortunately, it was clear that her witness statement comments on this issue were not her own evidence. I therefore do not regard her as an entirely reliable witness, and treat her evidence with some caution.

Michael DeFerrari has worked for MSD since 2000, particularly on the “Merck Manuals”, a medical reference work. He provided two witness statements for this trial, giving an overview of the costs associated with the production and maintenance of the manuals. He was briefly cross-examined (by Mr Ivison) on the reputational benefits to MSD of the manuals. He was an honest and straightforward witness, and there was no material challenge to his evidence.

Peter Young has been the director of commercial operations at the fourth defendant since 2019. He provided a witness statement which covered similar ground to that of Ms Parfitt in relation to MSD's animal health business, explaining the regulation of sales of veterinary pharmaceuticals in the UK, the company's UK marketing activities including its use of websites and social media, and changes made to the company's UK websites, email addresses and printed material as a result of these proceedings. He was cross-examined briefly (by Mr Brandreth). His answers were somewhat defensive and did not always engage with the questions.

Martin Rogers has worked for MSD since 2012 and has been its financial controller since 2015. He provided two very short witness statements addressing some specific points relating to MSD's financial documents and promotional expenditure on the names MSD and Merck Sharp & Dohme in the UK. He was briefly cross-examined (by Mr Brandreth), in particular on the figure given by him for MSD's promotional expenditure. His answers acknowledged that his evidence on this point was not complete and did not explain the basis for the expenditure figure provided by him.

Expert evidence

Both parties relied on expert evidence as to the quantum of damages based on a notional licence granted by Merck to MSD. Merck's expert was Andrew Wynn, a senior managing director at FTI Consulting, where Mr Wynn works as an economist and...