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

Fecha: 19-Sep-2025

General approach

General approach

116.

The experts were largely agreed as to the way in which an economic benefits approach to the calculation of the licence would work in practice. Specifically:

From MSD’s perspective, there might be economic benefits and avoided costs which it would be willing to pay for in a hypothetical negotiation, representing MSD’s incremental gain from the notional licence relative to a situation in which MSD conducted its business without committing any acts of breach or infringement. Those benefits establish a “ceiling” for the negotiated price, in that MSD would not be willing to pay a fee exceeding its incremental gains.

ii)

From Merck’s perspective, the grant of a licence to MSD might harm its own business, representing Merck’s incremental loss from the notional licence. That loss establishes a “floor” for the negotiated price, in that Merck would not be willing to accept a fee below its incremental loss.

iii)

While the standard approach in this situation is to establish where within the “bargaining range” between floor and ceiling the notional licence fee should lie based on the bargaining power of each side (see for example my discussion at §§290–296 of Anan Kasei), in the present case Dr Stec took a conservative approach and assumed, in Merck’s favour, that the licence fee should be set as the entirety of the incremental benefit to MSD. Merck (unsurprisingly) did not disagree with that assumption.

iv)

It was therefore common ground that the correct approach to a damages quantification under the economic benefits approach was to take the damages as the amount of all quantified benefits to MSD.

117.

A further preliminary point concerned the date of the notional licence fee negotiation. Merck’s case was for damages for trade mark infringements from 8 March 2007 (on the basis that earlier breaches are limitation-barred under UK law), and breaches of contract from 1 January 2010 (on the basis that earlier breaches are limitation-barred under German law). Dr Stec therefore calculated damages based on the hypothetical negotiation taking place on either 8 March 2007 or 1 January 2010. MSD’s primary case, however, was that there was no basis for any claim prior to 1 January 2010, essentially since there was no evidence of any material trade mark infringement prior to that date.

118.

Mr Brandreth’s oral closing submissions confirmed that if damages were assessed on an economic benefits approach, Merck did not rely on anything before 2010. He agreed, therefore, that the notional licence date should be 1 January 2010. It was common ground that the notional licence should be assumed to have covered the period up to the date of the final order of Sir Alastair Norris on liability, namely 28 July 2020.

119.

On the basis of that approach, the difference between the parties’ economic benefits calculations came down to the following points:

The avoided costs (if any) of migrating UK employee email addresses from @merck.com to @msd.com.

ii)

The avoided costs of geo-blocking the infringing websites in the UK and/or developing and maintaining mirrored websites without use of the Merck sign.

iii)

The avoided costs of developing and maintaining mirrored social media pages without use of the Merck sign.

iv)

The gain (if any) to MSD from web traffic diverted to MSD’s websites.

The avoided costs (if any) to MSD of marketing the signs Merck Sharp & Dohme and MSD in the UK.

vi)

The avoided costs (if any) to MSD of staff training to ensure compliance with the 1970 Agreement and Merck’s trade mark rights.

vii)

The appropriate approach to any unquantifiable benefits.

viii)

The effect of inflation and discount rates on the damages calculation.

120.

I will address each of these in turn.