Preliminary hearing to rule on Merck-y past

German or Jersey? Merck KGaA v Merck Sharp & Dohme Corp & Others, a Chancery Division, England and Wales, ruling last week from Mr Justice Nugee [don't ask: the Kats haven't come across him either, but he is a Chancery judge], addressed an important preliminary issue. This case isn't on BAILII and doesn't even seem to have a neutral citation reference, but it has been picked up and noted by Sweet & Maxwell's often useful Lawtel subscription-only service.

In short, this was that rarest of beasts, a piece of real trade mark infringement litigation between the two Mercks, who have also had a recent spat over the Merck Facebook page. By agreement, Merck Sharp & Dohme (MSD) was permitted to use the MERCK trade mark in the US and Canada, but its use in certain other territories was restricted.  It appears that Merck KGaA (MK) alleged that MSD had infringed its trade mark in the United Kingdom and, while it's not stated explicitly in the note received by this Kat, it looks as though there had been use of the mark but that MSD was arguing that it was a use that was permitted under the terms of the agreement, since MSD was arguing here that the agreement was governed by New Jersey law.  No, said MK, it was governed by German law.

MSD then made an application for the court to give a preliminary ruling as to which was the law that governed the agreement.  According to MSD, the advantages of hearing the preliminary issue were that it would (i) reduce the length of the substantive trial by removing the need for the parties to prepare their arguments on the basis that each law was the governing law, (ii) determine a discrete area of inquiry and (iii) be heard relatively swiftly over one or two days.

Nugee J granted the application for the preliminary ruling.  In his view
* it was likely that the preliminary issue could be heard over two days, within the next four to eight months [Merpel demands to know why the parties have to wait four-to-eight months. There seems to be no end of available judicial talent, particularly since a ruling on which law governs an agreement isn't something one needs particular IP expertise for. Is it something to do with the summer's impending sports events?].  
* there was some overlap between the preliminary issue and those of the substantive trial as the case would turn on the interpretation of the agreement, but all other issues were discrete.  
* the preliminary issue was a reasonably self-contained issue which needed to be determined at some stage, and it would indeed remove the need for preparing for the action on two different bases.  
* on the downside, the hearing date could not be guaranteed and the losing party might yet obtain permission to appeal against the decision, and it was likely that there would be some prejudice, but it was unclear how much.  
* it was impossible to quantify how much time would be saved, since the underlying facts would need exploring in any event, but the preliminary issue might save one day of the trial.  
* while there would be some extra costs and the risk of duplication, the cost of hearing the preliminary issue was relatively insignificant. 
* neither party would gain any tactical advantage if the preliminary issue were to be heard, and a variance in costs would affect both sides.  
* in conclusion, it was appropriate to hear the issue, which could take place reasonably quickly and without much difficulty, leaving both the court and the parties to focus on the substantive infringement issues when preparing for trial without having to advance their respective cases on two alternative bases.
The IPKat has to remain patient and speculate as to which provisions of contract law as between New Jersey and Germany might be so different as to make a big difference between infringement and non-infringement. Meanwhile, he's a little puzzled that this issue was not explicitly addressed at the time of the agreement since it's not exactly a novel point.  Might it have been left open since the parties could not agree?

Merpel can't understand why either party wants to use the word MERCK. It's unattractive when compared with bright sparkly pharma names like Actavis, Astellas, AstraZeneca, Novartis, Solvay or Teva. Worse, it's a homophone of MURK (see Urban Dictionary, here [not for the squeamish] and the Free Dictionary, here). In any event, she'd bet a leaf or two of her favourite catnip that most people on the planet don't even know that there are two Mercks. Do readers have any good suggestions for rebranding one or both of these unfortunately-named companies?

A possible New Jersey/Germany connection: New Brunswick and Old Brunswick
Preliminary hearing to rule on Merck-y past Preliminary hearing to rule on Merck-y past Reviewed by Jeremy on Monday, February 24, 2014 Rating: 5


  1. And of course, murk is not a "homophone" of Merck where the e takes the pronunciation like the English "ai" as in "fair".

  2. But in English "er" is not pronounced "ai", which is why Merck rhymes with "berk"

  3. I must admit, I always had problems distinguishing Blur and Blair.


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