Merck KGaA and Others v Merck Sharp & Dohme LLC and Another

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr Justice Max Barrett
• Judgment Date: 18 October 2024
• Neutral Citation: [2024] IEHC 613
• Docket Number: [2023 No. 3882P]

Between

Merck Kgaa, Merck Serono (Ireland) Limited, Merck, Millipore Limited, Sigma-Aldrich Ireland Limited and Versum Materials Ireland Limited

Plaintiffs

and

Merck Sharp & Dohme LLC and Merck Sharp & Dohme Ireland (Human Health) Limited

Defendants

[2024] IEHC 613

[2023 No. 3882P]

THE HIGH COURT

Breach of contract – Infringement of trade marks – Jurisdiction – Defendant seeking to set aside the plaintiffs’ leave to serve the proceedings out of the jurisdiction – Whether the case came within Art. 136(1)(b) of the EU Trade mark Regulation

Facts: The first defendant, Merck Sharp & Dohme LLC (US Merck) was sued for breach of contract. The second defendant, Merck Sharp & Dohme Ireland (Human Health) Ltd (MSD Ireland), was sued for infringement of Irish trade marks and passing off. The core of the claims against the defendants was to restrain the use of the word ‘Merck’ in connection with the business of the US Merck group in Ireland. US Merck applied to the High Court seeking that Barrett J decline jurisdiction in, or stay, the proceedings commenced against the defendants under Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12th December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (O.J. L351/1-32, 20.12.2012) (EUJR) and Regulation (EU) No. 2017/1001 of the European Parliament and of the Council of 14th June 2017 on the European Union trademark (O.J. L154/1-99, 16.6.2017) (EUTMR). In the case of the proceedings against US Merck, it also sought that Barrett J set aside the proceedings by reference to O. 11 RSC. More particularly US Merck came to court seeking: (1) an order pursuant to O. 12, r. 26 RSC, setting aside the order of the court dated 31st July 2023 giving the plaintiffs, Merck KGaA, Merck Serono (Ireland) Ltd, Merck, Millipore Ltd, Sigma-Aldrich Ireland Ltd and Versum Materials Ireland Ltd, leave to serve the proceedings out of the jurisdiction; (2) an order striking out the claims of breach of contract against US Merck; (3) an order pursuant to Art. 136(1)(a) EUTMR declining jurisdiction in respect of the claim of trade mark infringement against MSD Ireland; (4) alternatively an order pursuant to Art. 136(1)(b) EUTMR staying the claim of infringement against MSD Ireland; (5) an order pursuant to Art. 29 and/or Art. 30 EUJR and/or the inherent jurisdiction of the court, declining jurisdiction or staying the proceedings, as applicable; (6) such further and other relief as the court deems fit or appropriate; and (7) costs.

Held by Barrett J that the following conclusions could safely be reached: (1) the case came within Art. 136(1)(b) of the EUTMR; and (2) when it came to the O. 11 point a basic requirement had not been met by German Merck. Barrett J was told that it was not possible to sue in New Jersey but he did not know why this was so, nor had any good reason been offered as to why it was so (if it was so). He held that the burden rested on German Merck to satisfy him in that regard; it had failed to discharge that burden.

Barrett J held that, the foregoing being so, the following orders fell to be made: (i) an order pursuant to O. 12, r. 26 RSC, setting aside the order of 31st July 2023 giving the plaintiffs leave to serve the proceedings out of the jurisdiction; (ii) an order pursuant to Art. 136(1)(b) EUTMR staying the claim of infringement against MSD Ireland; and (iii) an order pursuant to the inherent jurisdiction of the court staying the balance of the proceedings remaining after (i) and (ii).

Application granted.

Summary

In this judgment I explain why I will make the following orders: (i) an order pursuant to O.12, r.26 RSC, setting aside the order of 31 ^st July 2023 giving the plaintiffs leave to serve these proceedings out of the jurisdiction, (ii) an order pursuant to Art.136(1)(b) EUTMR staying the claim of infringement against MSD Ireland, (iii) an order pursuant to the inherent jurisdiction of the court staying the balance of the proceedings remaining after (i) and (ii).

JUDGMENT of Mr Justice Max Barrett delivered on 18 ^th October 2024

Introduction

1 . Outside the family law arena it is uncommon to find plaintiffs and defendants with the same name involved in litigation against each other. So how is it that there is a German Merck on the plaintiffs' side of the courtroom in this case and an American Merck on the defendants' side? The answer is that although German Merck and American Merck share a common ancestor in Friedrich Merck (a 17 ^th century Bavarian-born apothecary), in the centuries since they have become two entirely separate and competing families of companies. They are a little like the Plantagenets and the Tudors of the commercial world: warring Houses with a common ancestry but with the conflict between them no less fierce for that – and with the added confusion that both Houses share the same name.

2 . This is an application on behalf of the first defendant (‘US Merck’) and the second defendant (‘MSD Ireland’). US Merck is being sued here for breach of contract. MSD Ireland is being sued here for infringement of Irish trade marks and passing off. The core of the claims against the defendants is to restrain the use of the word ‘Merck’ in connection with the business of the US Merck group in Ireland. US Merck seeks that I decline jurisdiction in, or stay, the proceedings commenced against the defendants under the EU Jurisdiction Regulation (EUJR) 1 and the EU Trade mark Regulation (EUTMR). 2 In the case of the proceedings against US Merck, it also seeks that I set aside the proceedings by reference to O.11 RSC. More particularly US Merck has come to court seeking:

• 1. An order pursuant to O.12, r.26 RSC, 3 setting aside the order of the court dated 31 ^st July 2023 giving the plaintiffs leave to serve these proceedings out of the jurisdiction.

• 2. An order striking out the claims of breach of contract against US Merck.

• 3. An order pursuant to Art.136(1)(a) EUTMR declining jurisdiction in respect of the claim of trade mark infringement against MSD Ireland.

• 4. Alternatively an order pursuant to Art.136(1)(b) EUTMR staying the claim of infringement against MSD Ireland.

• 5. An order pursuant to Art.29 and/or Art.30 EUJR and/or the inherent jurisdiction of the court, declining jurisdiction or staying the proceedings, as applicable.

• 6. Such further and other relief as the court deems fit or appropriate.

• 7. Costs.

3 . The parties are not unaware of the potential for confusion and (what I might loosely, and in a non-legal sense, describe as) unfair competition between them that arises from their sharing the same name. In 1955, they concluded an agreement between them which addressed how, in different parts of the world, including what is now the EU, the word ‘Merck’ would be used to designate their respective businesses, and how it would be used as a trade mark in respect of their respective products. That agreement was renewed in 1970 and amplified upon in 1975. Since then, German Merck has come to object to the manner in which US Merck has been presenting itself outside the US. Matters came to the boil in March 2013. At that time, proceedings were commenced in the UK by German Merck against US Merck for breach of the 1970 Agreement and infringement of US national Merck trade marks. Around that time proceedings were also commenced by German Merck in Germany for infringement of the EU word trade mark (for the word ‘Merck’). A whole

series of other proceedings have been commenced in various other jurisdictions

4 . Unclear to me (though I do not need to know why matters proceeded as they did) is why German Merck thought it best to fragment its claims for the EU by commencing proceedings in the UK for breach of contract while also commencing separate proceedings in Germany for infringement of the EU trade mark (EUTM) for Merck and separate parallel national trade mark claims. Suffice it to note that the end result of these manifold claims was that (perhaps unsurprisingly) a preliminary reference on jurisdiction (considered later below) eventually went to the CJEU. That reference confirmed, in effect, that the UK trade mark proceedings were going to have to be carved out of the EUTM proceedings in Germany. As will be seen, the Court of Appeal of England and Wales presciently warned in its judgment that the contract proceedings in the UK created a risk of conflicting decisions with the trade mark proceedings in Germany. Just as it warned, so it has come to pass: the UK courts and District Court of Hamburg have taken diametrically opposed views as to how the 1970 Agreement falls properly to be interpreted. This disparity of conclusions has arisen even though both courts were applying German law.

5 . I do not have to decide in this application which of those two competing views of German law falls to be preferred. I merely note that the commencement of the Irish proceedings is consistent with German Merck's apparent preference for a multiplicity of proceedings and (perhaps unsurprisingly) has yielded lis pendens issues now as between Ireland and Germany (where the judgment of the District Court of Hamburg remains under appeal). I cannot also but note that when it comes to the Irish proceedings, German Merck seems to be relying on ‘slim pickings’ in terms of its grievances. Thus, at issue are, e.g., the use of a very small number of @merck.com e-mail addresses within US Merck, the participation of a US Merck VP at a conference in Ireland in 2019, and the supply to UCD library of hard copies of a Merck manual of veterinary medicine which has been published since 1955.

6 . In the bevy of just-described proceedings the High Court of England and Wales was the first court in Europe to give judgment. Applying German law, it found US Merck to be guilty of breach of the 1970 agreement and infringement of UK national trade...