Merck KGaA v Merck Sharp & Dohme LLC & Ors

The principle of open justice is the starting point when confidentiality is asserted, and ordinarily the party seeking protection must justify departure from publicity. That starting point may be displaced in its practical application where the parties have entered a contractual confidentiality regime governing disclosed documents. A party bound by such an agreement must make a targeted application identifying the particular documents and proposed collateral use, and establish special circumstances constituting a good reason for release. The court should avoid disproportionate satellite litigation involving document-by-document analysis where an open judgment can be understood without the underlying confidential material. Access by members of the public remains governed by the open justice jurisdiction. Foreign use should ordinarily be pursued through the statutory procedure for obtaining evidence for proceedings in other jurisdictions.

Merck and MSD were parties to long-running trade mark infringement and breach of contract litigation. Following a public damages inquiry and a fully public judgment awarding Merck approximately £6 million, Merck sought orders preserving confidentiality over 91 documents and restricting MSD’s collateral use of them.

The restrictions arose both under Civil Procedure Rules 1998, rule 31.22, and under a contractual confidentiality agreement. MSD argued that documents read or referred to at the public trial should ordinarily become available for collateral use, and that Merck had failed to justify confidentiality document by document. The central issue was whether MSD should be released from the contractual and procedural restrictions, particularly for use in foreign proceedings.

1. Application granted in principle. The court proposed orders preserving the restrictions on MSD’s collateral use of the Confidential Documents, subject to a future targeted application limited by time or purpose.
2. The fundamental starting point was open justice. Its purposes were public scrutiny of the court’s decision-making and public understanding of how and why decisions were made. The fully public damages judgment could be understood without access to confidential internal documents, unredacted expert reports or unredacted skeleton arguments.
3. The contractual confidentiality regime materially altered the practical allocation of the burden. MSD had agreed not to make collateral use of documents designated confidential and had accepted Merck’s designations without a contractual mechanism for challenging them. Deployment under rule 31.22(1)(a) did not abrogate that obligation.
4. Accordingly, MSD bore the practical and evidential burden of making a targeted application identifying particular documents and a specified proposed use, and of showing an open justice reason or special circumstances constituting a good reason for release. Merck could then make a targeted response on confidentiality, including whether confidentiality had diminished through the passage of time.
5. A blanket or line-by-line review of 91 documents, or even 20 sample documents, would be disproportionate and inconsistent with the overriding objective. The court was entitled to proceed on a working assumption that at least some Category A and B material was capable of protection and that Category B and C documents might require redaction.
6. Use in foreign proceedings did not engage English open justice principles. The appropriate route was an application under the Evidence (Proceedings in Other Jurisdictions) Act 1975. Members of the public remained free to seek access through the open justice jurisdiction.