KGaA v Merck Sharp & Dohme Corp & Ors

A long-term coexistence agreement must be construed as a whole and according to its governing law. Under German law, the agreement covered use of the word “Merck” on the Internet and in relation to services. It prohibited the defendants from using “Merck” alone, or the MERCK branding, in the United Kingdom without the required geographical identification. Global websites deliberately directed at UK users were not mere accidental overspill. A limited equilibrium arising from longstanding use of “merck.com” and “@merck.com” shaped the relief, but did not justify newer variants or expanded use. The same conduct infringed the claimant’s UK trade marks. The own-name defence failed because the defendants were known in the UK as MSD or Merck Sharp & Dohme.

The claimant, Merck KGaA, brought proceedings against companies associated with Merck Sharp & Dohme concerning use of the Merck name and mark in the United Kingdom. The dispute concerned a 1970 coexistence agreement, clarified by a 1975 Protocol, and the defendants’ global websites, domain names, email addresses, presentations and branding.

The claimant alleged breach of contract and infringement of UK trade marks. The defendants relied on the intended US and Canadian focus of their websites, accidental Internet overspill, honest concurrent use, forfeiture and the own-name defence. They also counterclaimed for partial revocation of the claimant’s registrations for non-use.

1. Construction. Applying German law, the agreement had to be read objectively as a whole, having regard to its purpose, context and good faith. It provided a forward-looking framework governing use of the Merck name and mark worldwide. The agreement applied to Internet use and to services.
2. Breach. In the UK, use of “Merck” alone to identify Merck US, use of the MERCK branding, and use of newer Merck domain names constituted breaches. Global websites with UK-specific content and substantial UK-directed activity were not accidental overspill. The de minimis argument failed.
3. Equilibrium. Longstanding honest concurrent use of “merck.com” and “@merck.com” created an equilibrium relevant to relief. Later expansion disturbed it. Merck US had to take reasonable measures, including geo-targeting or equivalent safeguards, localised email addresses and suitable pop-up warnings. The same principle did not protect recent domain-name variants.
4. Trade marks. The MERCK branding was use as a mark in relation to goods and services, including pharmaceuticals, research and healthcare services, and infringed under sections 10(1), 10(2) and 10(3) of the Trade Marks Act 1994. Use merely describing the corporate entity was not, without more, trade mark infringement.
5. Counterclaim and relief. Partial revocation followed for specified goods and services lacking genuine use or sufficient clarity. The own-name defence under section 11(2)(b) failed. Merck & Co Inc and Merck Sharp & Dohme Ltd were joint tortfeasors in the identified infringements; Intervet UK Ltd was liable for its own identified infringement. The claim succeeded and the counterclaim succeeded only to the stated extent. Declaratory and injunctive relief was to be settled.