A Merck-y appeal is remitted to the High Court

Is that a silver lining or murky weather on the horizon?

The longstanding dispute over the use of the MERCK trade mark around the world is set to continue for the foreseeable future as the Court of Appeal of England and Wales remitted various issues back to the High Court in Merck KGaA v Merck Sharp & Dohme Corp & Ors [2017] EWCA Civ 1834.  The IPKat summarised the High Court decision here.

Various criticisms were levelled at that judgment (see paragraphs 22 to 25 for the full list).  Most of these criticisms were dismissed.  They included whether:

1. there was a procedural irregularity on the basis that the judge's decision extended beyond the scope of the claim (paras 73 to 117);
2. clause 7 of the agreement in dispute covered entity names, domain names and email addresses (paras 118 to 139); and 
3. the agreement applies to services (para 140 to 152).

The question of targeting was more controversial.  In particular whether Merck US' use of MERCK targeted the UK.  The recent authorities, including the Argos decision were considered and the Court of Appeal endorsed that judge's conclusion that whilst a lack of intention to target a market cannot be used to avoid liability, intention is a relevant factor to be taken into account when reaching a conclusion on targeting.  The current position on targeting as summarised from the various decisions of the Court of Justice of the European Union (CJEU) was summarised in paragraphs 166-170:

166. The general principles which emerge from these decisions of the Court of Justice are conveniently considered by reference to an advertisement of goods and may be summarised as follows. 

167. First, in determining whether an advertisement of goods bearing a trade mark on the website of a foreign trader constitutes use of the trade mark in the UK, it is necessary to assess whether the advertisement is targeted at consumers in the UK and in that way constitutes use of the mark in relation to goods in the course of trade in the UK. 

168. Secondly, the mere fact that a website is accessible from the UK is not a sufficient basis for concluding that an advertisement displayed there is targeted at consumers in the UK. 

169. Thirdly, the issue of targeting is to be considered objectively from the perspective of average consumers in the UK. The question is whether those average consumers would consider that the advertisement is targeted at them. Conversely, however, evidence that a trader does in fact intend to target consumers in the UK may be relevant in assessing whether its advertisement has that effect. 

170. Fourthly, the court must carry out an evaluation of all the relevant circumstances. These may include any clear expressions of an intention to solicit custom in the UK by, for example, in the case of a website promoting trade-marked products, including the UK in a list or map of the geographic areas to which the trader is willing to dispatch its products. But a finding that an advertisement is directed at consumers in the UK does not depend upon there being any such clear evidence. The court may decide that an advertisement is directed at the UK in light of some of the non-exhaustive list of matters referred to by the Court of Justice in Pammer at paragraph [93]. Obviously the appearance and content of the website will be of particular significance, including whether it is possible to buy goods or services from it. However, the relevant circumstances may extend beyond the website itself and include, for example, the nature and size of the trader's business, the characteristics of the goods or services in issue and the number of visits made to the website by consumers in the UK.

Following the application of this test to the facts in the case, the Court of Appeal concluded that the judge was entitled to reach his conclusion regarding websites and social media activity (para 182- 197).  Arguments regarding the use being de minimis and the impact of the German doctrine of equilibrium were both considered.

So why was the case remitted to the High Court?

Some of the issues required further first instance examination, such as (see para 320):

i) the issue of partial revocation of the registered trade marks;
ii) whether the impugned activities of Merck US constituted use in the UK in the course of trade in relation to any relevant goods or services;
iii) whether any uses of the kind identified in ii) above are negligible or trivial and so fall to be regarded as de minimis;
iv) the appropriate form of any relief to be granted by way of final order in respect of (a) the claim for breach of contract; and (b) the claim for infringement of registered trade mark.

Part of the basis for remitting the decision was that the court did not make sufficient finding in relation to many of the types of use alleged to constitute infringement such as press releases and emails.  The Court of Appeal also considered that the findings regarding websites and social media were too general and required more detailed and consistent reasoning.  They further criticised the judge for not giving Merck US the opportunity to be heard before finding that Merck Global was entitled to injunctive relief.  For all these reasons, the case was remitted to the High Court for further consideration.