Readers with long memories may recall the litigation between the pharmaceutical companies Merck KGaA on one hand and Merck Sharp & Dohme (MSD) and its associated companies on the other, which occupied the English courts from 2015 to 2020.
The dispute concerned issues including the use of "MERCK" as a trade mark and the interpretation of a Co-Existence agreement between the parties dating from 1970. The case concluded in July 2020 with an order by Sir Alistair Norris. You might have thought that was the end of the matter...
However, last year the parties were back in court, after Merck (the Claimant) alleged that MSD and the other Defendants had breached the court order by using MERCK as a trade mark and name and had infringed its trade marks.
Merck sought declaratory relief in respect of each of more than 50 alleged breaches of the Order (set out in Annex 2 of its application). These alleged breaches included use on websites, online media and other uses. The judge, Mr Justice Edwin Johnson, described the evidence provided in support of the claims as “voluminous”.
Edwin Johnson J concluded that the Defendants had breached the order in some cases but not in others because the use was inadvertent.
The court’s order
Paragraph 2 of the 2020 Order injuncted the First Defendant from using in the UK “(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”.
Paragraph 3 further ordered the defendants not to “infringe UK trade marks Nos. 1123545 and 1558154, and International registered marks (UK) Nos. 770 038 and 770 116 by using the sign MERCK as a trade mark in the course of trade in the United Kingdom”.
However, paragraph 4 set out that certain actions that would not be a breach of paragraph 2 or 3. These included: “(h) For the Defendants inadvertently to act in breach, if the error is corrected within 7 days of notification in writing by the Claimant to the Defendants or their solicitors, or of the Defendants otherwise becoming aware of such inadvertent error.”
Declaratory relief
Edwin Johnson J first considered whether he should grant declaratory relief. He concluded that, if and to the extent that the MSD Defendants were in breach of the order, he should make declarations to that effect. He added:
“I do not consider that I should treat the Application as the equivalent of a construction summons, either by confining myself to declarations as to the meaning and effect of the Order, or by limiting myself to consideration of examples of situations which might constitute breaches of the Order or by the expression of provisional or qualified conclusions on the content of Annex 2.”
For each alleged breach, the judge had to assess whether there had been use of the trade mark Merck or the use of Merck as a contraction of MSD’s corporate name or as a trade or business name and/or infringement of specified trade marks by the use of the sign MERCK as a trade mark in the course of trade in the UK.
Before considering the alleged breaches in detail, the judge considered the correct approach to constructing the order; the burden of proof; the scope of the “inadvertent error” exception mentioned above; targeting and the recent Supreme Court judgment in Lifestyle Equities v Amazon (reported here); and some general points about trade mark infringement.
The judge drew three points from the Supreme Court judgment in Lifestyle Equities: (1) it did not change the law on targeting and only criticised the Court of Appeal in respect of certain specific aspects of the case; (2) it emphasised that when assessing targeting, the judge must evaluate or carry our a multifactorial assessment of all the relevant circumstances; and (3) it is therefore necessary to make an overall assessment of the relevant websites, online media and uses complained of.
Defining an 'inadvertent error'
The judge construed the words “inadvertent error” to mean “a genuine accident, in the sense of something which was not desired or intended, but slipped through when another result was intended”.
Based on evidence in relation to some of the alleged breaches, he rejected the claimant’s “narrowly confined” interpretation of “inadvertent error” regarding material imported to the MSD website from its US website, saying:
“The relevant point seems to me to be that Merck US understood the need to weed out illegitimate references to Merck … and to weed out links to the wrong (ie. Merck as opposed to MSD) website. What went wrong … was that the weeding out process was not quite thorough enough. This is to be regretted, but errors of this kind do happen. In this instance it seems to me that the weeding out errors were inadvertent, were the subject of prompt corrective action, and were the kind of errors which Sub-paragraph (h) was intended to excuse.”
In total, the judge assessed 33 alleged breaches or groups of breaches of the order. Breaches of either paragraph 2 or paragraph 3 were established in 17 of these cases (two only in part).
What does this mean?
This case again highlights the associated risks arising from the use of trade marks and names on websites, particularly when ownership of the marks varies by jurisdiction. The judgment provides useful guidance on how the courts will construct orders, and provides particular insight on the use of the term “inadvertent error”.
The judgment is also notable as it is one of the first to apply the recent UK Supreme Court judgment in Lifestyle Equities.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com