HC-2013-000089 - [2025] EWHC 2376 (Ch)

Dr Stec’s calculation of economic benefits included a figure attributed to the benefit that would have been obtained by MSD avoiding the cost of migrating its UK employee email addresses from @merck.com to @msd.com, if it had obtained the notional licence permitting it to continue using the @merck.com email addresses for its UK employees. He identified that cost as a one-off cost of £121,700, based on a disclosed document from MSD which purported to record the costs actually incurred by MSD in migrating its email accounts. That document was referred to in Ms Lanza’s evidence as indicating the costs of this migration exercise.

Unfortunately, that document was not a reliable record of the actual costs of MSD’s email migration, since it was dated 21 May 2018, whereas the evidence was that the email migration did not occur until 2020. It also appeared that the 2018 document presented a materially incomplete account of the costs of the email migration exercise. As discussed at §13 above, it became apparent during Ms Lanza’s cross-examination that this document was supplied to Ms Lanza by her solicitors, and had not been verified by her prior to her reliance on this in her witness statement.

In light of the unreliability of that evidence, Mr Brandreth contended that the court should rely instead on the evidence of four MSD witnesses, Adele Ambrose, Rashi Rai, Kelley Dougherty and Andrew Zager, filed in 2016 and 2018 for the purposes of earlier stages of the proceedings, and included in the trial bundle pursuant to a hearsay notice. Mr Brandreth contended that the evidence of those witnesses suggested that the actual cost of email migration was at least $610,000 upfront plus $250,000 annually, giving a total of around $3.2m or £2.4m.

I do not accept that submission, and did not permit Mr Brandreth to cross-examine Dr Stec on that basis. Prior to the cross-examination of Dr Stec, Merck had not ever suggested that (for the purpose of an economic benefits analysis) it would seek to argue that MSD had avoided email costs calculated by reference to the 2016 and 2018 evidence of Ms Ambrose and Ms Dougherty. Quite the contrary, Mr Wynn in his expert reports considered that it was not appropriate to include any costs of email migration, for the short reason that those were costs actually incurred by MSD, so were not avoided costs that were incremental to the notional licence. Merck’s case on damages was advanced on the basis of the evidence of Mr Wynn, with no indication prior to the cross-examination of Dr Stec that Merck was seeking to resile from Mr Wynn’s evidence and put a wholly different case in this regard.

The court will, of course, evaluate the quantum of damages by reference to the relevant material before it, which may well include factual as well as expert evidence. But that evaluation must necessarily be framed by the cases advanced by the parties, including in particular the evidence of the experts on which they rely. If Merck intended to argue that the evidence of Mr Wynn on this point was unsound and should be rejected by the court, and that rather than a nil figure for email migration it intended to contend for a figure of £2.4m, that point should have been identified at the latest in Merck’s skeleton argument, so that it could be explored properly with both experts, with both having had time to consider the point. It was far too late for this to emerge for the first time in Dr Stec’s cross-examination, with Mr Wynn having given his evidence already and in circumstances where (unsurprisingly) his evidence on this point had not been challenged by Mr Hollingworth.

The starting point in the consideration of the email migration costs must therefore be the question of whether the court should accept Mr Wynn’s evidence that the right approach should be to exclude MSD’s email migration costs (whatever they were) on the basis that these were one-off costs which MSD incurred in any event, such that those costs could not have been avoided by the grant of a licence for the period from 2010 to 2020.

In my judgment, Mr Wynn’s (unchallenged) explanation for his approach on this point was compelling. He was right to say that valuing the notional licence on an economic benefits approach requires an estimation of the incremental economic benefits that would have been obtained by entering into the licence. While that will include costs that would have been avoided by the agreement of the licence, a one-off email migration cost was not such a cost, because it would have been required in any event when the licence expired. Dr Stec was not specifically asked to comment on this in his cross-examination by Mr Brandreth, but it was apparent from his oral evidence that he included these costs on a conservative basis, in favour of Merck. Dr Stec did not offer any other reasoned basis for the inclusion of email migration costs in the calculation.

When asked about this in his closing submissions, Mr Brandreth did not disagree in principle with Mr Wynn’s analysis. He nevertheless justified the inclusion of these costs on two bases. The first was that this was a way of measuring the unquantifiable elements of the email migration process, suggesting that this was what Dr Stec intended. That is, however, not what Dr Stec said, and Mr Brandreth had not suggested this interpretation of his evidence when he cross-examined Dr Stec. It was, moreover, unclear what “unquantifiable” costs Mr Brandreth had in mind.

Mr Brandreth’s second response was to say that the majority of his calculated figure related to annual maintenance costs. I accept that if there was any reliable evidence of annual (rather than one-off) costs that would have been avoided by the grant of the notional licence, the avoidance of those costs could have been regarded as benefits incremental to the licence. But if there were indeed material costs attributable to email migration, there is no reason why they should not have been included in the calculations of both Dr Stec and Mr Wynn (which did include detailed figures for other annual costs, such as website maintenance costs). Mr Wynn did not, however, identify any such costs; nor did Dr Stec; and for the reasons set out above it was too late for Mr Brandreth to seek to introduce his own figures for these costs on the basis of hearsay evidence, after Mr Wynn had been cross-examined.

The correct approach is therefore, in my judgment, to exclude the email migration costs from the calculation of economic benefits.