Merck KGaA v Merck Sharp & Dohme LLC & Anor

This Court of Appeal decision is about online branding, territorial rights and compliance with an existing UK court order. The court dismissed Merck US’s appeal and upheld declarations that certain later uses of “Merck” breached paragraphs 2 and or 3 of the 2020 Final Order.

For businesses, the practical message is straightforward. A territorial brand restriction can affect websites, links, redirects, email addresses and other digital touchpoints. Courts will look closely at whether online content is targeted at the UK and whether an exception really fits the wording used.

The dispute sits on top of a very old commercial split in the use of the Merck name. The German-side business and the American-side business had, in broad terms, divided the world between them. The American side used the name in the USA and Canada, while the German side used it elsewhere, subject to concurrent rights in Cuba and the Philippines.

To manage that split, the parties entered into agreements including the 1970 Agreement and the 1975 Protocol. Those arrangements continued to bind Merck Global and MSD. The internet made the arrangement harder to police because branding, websites and contact routes could be seen across borders.

Merck Global became increasingly concerned that Merck US was using “Merck” outside its permitted territories, especially online. UK litigation began in 2013. Earlier judgments found breach of the 1970 Agreement and infringement of UK trade marks. That led to the 2020 Final Order, which restricted certain uses of “Merck” in the UK.

The later application was not about reopening the whole dispute. It was about whether specific later acts, many involving online materials, websites and email use, crossed the line drawn by the Final Order. The High Court worked through the allegations row by row and found some were breaches and some were not.

The Court of Appeal dealt with four main issues. First, could the court properly grant declarations that identified acts breached the Final Order, or should Merck Global have been forced to use contempt proceedings instead?

Secondly, had the judge been right to find that certain online uses were targeted at the UK and, where paragraph 3 was engaged, amounted to trade mark use in the UK? The court stressed that both paragraphs 2 and 3 required use in the United Kingdom, and that internet accessibility alone was not enough.

Thirdly, had the judge interpreted the carve-outs correctly, especially the exceptions for MSD-branded UK-specific websites linking to merck.com, employee email addresses ending @merck.com for employees outside the UK, and inadvertent errors corrected within seven days?

Fourthly, should the judge also have made declarations about the allegations that failed, rather than only declaring the breaches that were established?

The Court of Appeal dismissed the appeal in full. It agreed that declaratory relief was appropriate. There was no rule preventing the court from declaring that specific acts breached the Final Order, and the court considered that this was a useful and proportionate way to resolve ongoing compliance disputes.

The court noted that Merck Global had confirmed it would not bring contempt proceedings for the specific past acts covered by the application. The court accepted that declarations gave the parties practical guidance without unnecessarily inflaming the dispute through high-stakes contempt proceedings.

On targeting, the court upheld the judge’s approach. It confirmed that targeting is a fact-sensitive evaluation. An appeal court should interfere only if there is an error of principle. The court rejected the criticisms made of the judge’s reasoning and accepted that he had carefully assessed the different factual situations on their own merits.

On trade mark use, the court also upheld the judge’s conclusions. The appeal judgment does not recite every factual example, but it confirms that the judge had been entitled to find trade mark use in the cases where he found breaches of paragraph 3.

On the carve-outs, the court agreed with the narrower reading adopted below. It held that “UK-specific” means specific to the UK. A website that is targeted at the UK as part of a wider international audience is not therefore a UK-specific website. The court also agreed that the website carve-out was conditional on the specified pop-up being generated.

The court further agreed that the employee email address carve-out did not extend to generic inboxes. The wording referred to email addresses for employees based outside the UK, and the separate treatment of the generic address medicalinformationuk@merck.com supported that reading.

Finally, the court agreed that “inadvertent error” meant a genuine accident. It did not cover deliberate acts carried out under an erroneous belief that they were permitted. The court accepted that this interpretation better matched the wording and the background to the order.

On the final ground, the court rejected the complaint that the judge should also have made declarations about the allegations that failed. There had been no cross-application for negative declarations, and the framing of the declaration was a matter for the judge’s discretion.

Most businesses will never face a dispute on this scale, but the operating lessons are highly reusable. If your business shares a name with another trader, licenses a brand by territory, or has settled a naming dispute, online systems can quietly create legal risk. A global website, a footer, a redirect, a downloadable PDF, a contact form or a generic inbox can all matter.

This case also shows that legal drafting and technical implementation must match. If an order or agreement allows one narrow setup, such as a UK-specific site linking to another domain with a mandatory pop-up, you should not assume that a broader global setup is close enough. Courts will compare the wording with the real user journey.

Another practical point is governance. The court was willing to use declarations to provide worked examples of what complied and what did not. That is a reminder to keep internal approval rules, evidence of fixes, records of when issues were identified and proof of when changes went live.

If your business has territorial branding limits, start with the documents that create the restriction and then test your real-world setup against them. The court’s reasoning shows that wording matters, but so do the facts of how users actually encounter the brand online.

Do not review only the homepage. The risk may sit in linked pages, contact routes, downloadable materials or back-end systems that were set up for convenience and then left in place. A compliance review should cover both customer-facing content and the systems behind it.

A simple audit can reduce the risk of drifting into breach. The aim is to identify where the restricted name appears, who can see it, whether the use is aimed at the UK and whether any exception genuinely applies.

Work through the customer journey first, then the supporting systems behind it. That is often where generic inboxes, redirects, legacy pages and overlooked links are missed. The court’s reasoning shows that a business should not rely on broad assumptions about how a global digital estate will be viewed.

One important feature of the case is procedural. The Court of Appeal accepted that declarations could be a sensible way to resolve a live compliance dispute about an existing order. The court saw value in giving the parties practical guidance on concrete examples rather than forcing them straight into contempt proceedings.

That does not mean contempt stops mattering. It means a court may be willing to use a lower-key route where the parties need clarity on how an order applies to real situations. For a business owner, the lesson is that early clarification can be better than letting a technical dispute harden into a sanctions dispute.

The judgment also shows why evidence matters. The High Court had a large body of written material and worked through the allegations in detail. If your business is trying to show compliance, records of changes, screenshots, dates, internal instructions and proof that technical fixes were implemented can all become important.

The Court of Appeal judgment was handed down on 28 March 2025. It dismissed the appeal from the High Court and left in place the declarations that certain uses of “Merck” breached paragraphs 2 and or 3 of the 2020 Final Order.

This is a useful authority on declaratory relief, online targeting and the strict reading of carve-outs in brand-related court orders. For businesses, its value is practical and ongoing because the same issues arise in websites, linked domains, email systems and territorial brand controls.