Merck Kgaa v Merck Sharp & Dohme Corporation

JurisdictionEngland & Wales
JudgeSir Alastair Norris
Judgment Date24 July 2020
Neutral Citation[2020] EWHC 1273 (Ch)
Date24 July 2020
Docket NumberCase No: HC-2013-000089
CourtChancery Division

[2020] EWHC 1273 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

INTELLECTUAL PROPERTY LIST (ChD)

The Rolls Building

Fetter Lane

London EC4A 1NL

Before:

Sir Alastair Norris

Case No: HC-2013-000089

Merck Kgaa
Claimant
and
(1) Merck Sharp & Dohme Corp
(2) Merck & Co Inc
(3) Merck Sharp & Dohme Limited
(4) Intervet UK Limited
(5) Intervet International BV
Defendants

Benet Brandreth QC (instructed by Bird & Bird LLP) for the Claimant

Geoffrey Hobbs QC and Guy Hollingworth (instructed by Linklaters LLP) for the Defendants

Written Submissions: 9–19 June 2020.

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

This Judgment was handed down by circulation to the parties' representatives by email and by release to Bailii. It was not handed down in court due to the present COVID19/coronavirus pandemic. The deemed time for hand-down is 2.00pm on 29 July 2020.

Sir Alastair Norris
1

This judgment deals with issues as to the form of order arising out of my judgment on the remitted issues. I will use the defined terms previously adopted. I express my thanks for the degree of agreement reached by the parties.

2

The task in hand is to formulate the relief that ought to be granted by an English Court to enforce obligations arising under a contract governed by German law. It is important to have this context in mind. It is helpfully summarised in paragraphs [123]–[125] of the appeal judgment.

3

The first issue is as to the form of the declaration. Both sides are agreed that the declaration should contain a general characterisation of the breaches which have actually occurred (leaving a reader of the Order to turn to the relevant judgments for detail). They differ as to the terms of the characterisation. Merck Global proposes that the breaches be characterised as

“…use of the word “Merck” as a contraction of its corporate name or as a trade or business name in any third-party communication.”

Merck US proposes that the breaches be characterised as

“.. use of the word “Merck” alone as a contraction of its corporate name or as a trade or business name when furthering or promoting its business activities to third parties.”

In so doing Merck US bases itself tightly upon language used in paragraph [139] of the appeal judgment where the Court of Appeal was summarising the object of clause 7 of the 1970 Agreement. But it is to be observed that when summarising the breaches of clause 7 of the 1970 Agreement the Court of Appeal (in paragraph [200] of the appeal judgment) regarded the use of the word “Merck” as part of the address of a website or as part of an email address or as part of a corporate name lacking a geographical identifier as all constituting breaches of clause 7 of the 1970 Agreement, even though the word “Merck” did not appear “alone”.

4

The description of the breaches which have actually occurred which I think would most assist a reader of the Order and which signposts the findings in my judgments (as illuminated by the appeal judgment) is:-

“Use of 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 identifiers required by the Agreement) when furthering or promoting its business to third parties”.

The breaches established were all in the context of attempts to further or promote the business of Merck US by diluting the value of Merck Global's rights to use the “Merck” name in the rest of the world other than the Permitted Territories. That is the case even where “Merck” was used as an entity name. I cannot recall any third-party communication that did not occur in that context.

5

The second issue is as to the form of the injunction, where the position of the respective parties is replicated. Merck Global submits that the injunction should restrain a breach of clause 7 of the 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 in any third-party communication…”.

Merck US submits that the injunction should restrain a breach of clause 7 of the Agreement:-

“…by using within the United Kingdom (a) the trademark “Merck” and/or (b) the word “Merck” alone as a contraction of its corporate name or as a trade or business name when furthering or promoting business to third parties”.

6

The difference between these formulations is this: the form preferred by Merck Global prohibits the occurrence of an event (“the use”) whilst the form preferred by Merck US prohibits an activity (“using”). Merck US submits that by referring to the event the Order imposes liability for the occurrence of the event, irrespective of the existence of instrumentality or causation with regard to the occurrence of the event. But that is not so. If the actions of Merck US were not instrumental or causative there could be no breach by it of clause 7 of the Agreement. But that instrumentality or causative act may involve the use by MSD (through the “msd-uk.com” or “msd-animal-health.com” portals) of access to Merck US websites through an architecture created by Merck US or where access is permitted by Merck US. Paragraph [70] of the appeal judgment contains a summary: and it should be clear that such is use in breach of clause 7.

7

Whereas the declaration is focused upon historic acts the injunction looks to the future, and seeks to provide a party who is obliged to support the purpose of the Agreement and to desist from activities which might endanger its achievement with clear guidance as to what may not be done. In my judgment that is achieved by an order in this form:-

“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.”

I have some sympathy with the submission made on behalf of Merck Global that because (i) Merck US has in the past had a policy of pushing the boundaries of their entitlements under Agreement and (ii) the Agreement itself addresses simply “use” not “use in promoting business” I should prefer the Merck Global suggestion of referring to “any third-party communication”. But I have not been persuaded to adopt it (i) because the established breaches (including the use of “Merck” as an entity name) all occurred in the context of furthering or promoting business; (ii) whilst it may be suspected that Merck US will seek to exploit the “Merck” name in the UK in contexts other than the furthering or promoting of its business there is no satisfactory evidence of an actual intention to do so; and (iii) I trust that having been reminded of...

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2 cases
2 firm's commentaries
  • Co-Existence Agreements ' The Importance Of Getting Them Right
    • United Kingdom
    • Mondaq UK
    • 11 June 2020
    ...two parties have unknowingly adopted the same mark at the same time. The recent case of Merck KGaA v Merck Sharp & Dohme Corp and Ors [2020] EWHC 1273 (Ch) concerned a long running trade mark dispute between Merck KGaA (Merck Global) and Merck Sharp & Dohme Corporation (Merck US) and illust......
  • Reducing Legal Risk When Managing Marks On Global Websites
    • United States
    • Mondaq United States
    • 16 October 2020
    ...possible any available functionality equivalent to or nearly equivalent to 'geo-blocking'" (Merck KGaA v Merck Sharp & Dohme Corp [2020] EWHC 1273 (Ch)). To minimise this burden going forward, consider integrating first assessment into your regular trademark or IP audit process, as it is li......

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