Bird & Bird successful in UK breach of contract and trade mark action for global pharmaceuticals giant Merck KGaA, Darmstadt, Germany

15 January 2016

International law firm Bird & Bird has today secured a win in the English Court for its client pharmaceutical company Merck KGaA, Darmstadt, Germany in a breach of contract and trade mark dispute with US-based Merck Sharp & Dohme Corp (MSD).

The High Court today handed down judgment in the case of Merck KGaA v Merck Sharp & Dohme Corp, ruling that use in the UK by MSD of "Merck" alone either as a trade mark or name breached an agreement with Merck KGaA, Darmstadt, Germany dating back to 1955.

The dispute centred on Merck KGaA's claim that MSD's online use of "Merck" in the UK  breached a co-existence agreement between the parties and infringed  trade mark rights in the UK. At the heart of the litigation was how an agreement originally negotiated in 1955 applied to use on the internet and social media.

Background

Merck KGaA, Darmstadt, Germany is an international pharmaceuticals company whose origins date back to 1668. In 1891 it set up a US branch. After World War I the US branch became independent, eventually becoming MSD.

The two organisations entered into in a worldwide co-existence agreement in 1955 regarding the use of the term "Merck".  The agreement was amended in 1970.

High Court ruling

The first instance Court ruled in favour of the Claimant, with Mr Justice Norris stating in the judgment that MSD's use of "Merck" alone in the UK whether online or offline was a breach of the Agreement. He said that Merck KGaA, Darmstadt, Germany was entitled to an order restraining MSD from describing itself in any printed or digital material addressed to the UK as 'Merck', and restraining MSD's use in the UK of the trade mark 'MERCK' alone.

The Judge also ruled that uses of MERCK as part of MSDs branding on its global websites were directed to the UK and infringed the German group's UK trade mark rights.

Peter Brownlow, intellectual property partner at international law firm Bird & Bird who led the UK team acting for Merck KGaA, Darmstadt, Germany in the litigation, said:

"We are very pleased that the High Court agreed with us that the trade mark co-existence agreement still applies in today's online world – even though the internet was not envisaged in 1955 when the agreement was negotiated."

"The issues raised here around online use of trade marks and whether global websites infringe IP rights in particular countries are increasing in importance today when so much of a company's brand collateral lies in its online presence and digital assets." 

The Bird & Bird team acting for Merck KGaA, Darmstadt, Germany included partner Peter Brownlow, senior associate Nick Aries and associates Ning-Ning Li and Ahalya Nambiar. The barrister team was led by Henry Carr QC (now Mr Justice Carr) who was supported by Benet Brandreth both of 11 South Square, Grays Inn.

MSD was represented by Linklaters. Their barrister team was Geoffrey Hobbs QC and Guy Hollingworth.