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

Mr Wynn (for Merck) and Dr Stec (for MSD) were instructed to provide estimates of the royalties that would have been agreed between the parties in a hypothetical negotiation. The parameters of that assessment were agreed. In particular, the assumption was to be that Merck was a willing licensor and MSD a willing licensee; and the hypothetical negotiation should be assumed to have resulted in a licence that would cover the exact scope of MSD’s misuses of the Merck mark in the ways that were found to have constituted breaches of contract and trade mark infringements. The experts agreed that this would have been a licence of the Merck mark as an “umbrella brand”.

The experts agreed that the hypothetical negotiation should be assessed based on a reasonable person’s expectations as to the future, rather than with the benefit of hindsight; but they also agreed that hindsight information could (at least in some respects) be used as a proxy for those expectations.

The experts also agreed that, in principle, two approaches could appropriately be used to value the notional licence in issue in these proceedings:

Mr Wynn’s preferred approach in the present case was the comparables approach. On that basis he calculated damages in a range of between £18.6–46.1m. If he used the economic benefits approach as a cross-check, he put the damages figure at between £8.1–8.7m. Dr Stec fundamentally disagreed with the comparables approach and said that it was not possible to apply that methodology, even in a modified fashion, to reach a reliable damages figure. His preferred approach was the economic benefits approach, which he used to reach damages figures of £1.27m (based on an assumed 2010 negotiation date) or £1.44m (2007 negotiation date).

The opening submissions of the parties reflected the positions of their respective experts on this point. MSD maintained essentially that position in its closing submissions. With adjustments for inflation and the discount rate, but excluding interest, MSD’s final damages figures were £2m (2010 negotiation date) or £2.2m (2007 negotiation date).

As noted above, however, Merck’s position in closing submissions changed significantly as a result of the change of position of Mr Wynn during his cross-examination. Although Merck’s written closing submissions still retained nominal reliance on the comparables approach, Mr Brandreth’s oral closing submissions made no further comment on that approach, and instead solely addressed a reformulated case on the economic benefits approach, which put the damages figure at a total of more than £14.15m.

Since Merck did not explicitly abandon its reliance on the comparables approach, it remains necessary to address that first, before turning to the alternative economic benefits analysis.