This article was first published on The Pharma Letter.
In this article, we look at the High Court’s decision to partially revoke four of Merck KGaA’s registered trade marks on the basis of non-use. The approach taken by the court in this case provides an indication of how courts and tribunals might resolve future disputes relating to pharmaceutical trade marks. It therefore provides useful insight to those applying for and managing pharmaceutical trade mark portfolios in the UK and EU.
Merck KGaA (“Merck Global”) is a German business. In the early 20th century, its US subsidiary (“Merck US”) became an independent business. The two parties signed a coexistence agreement in the 1950s, which was updated in 1970. It provided that each party could only trade in the other’s territory if it used its full corporate name. Merck US was permitted to use MERCK in the US and Canada, whilst Merck Global used that brand everywhere else. This arrangement generally worked well until the advent of the internet, and the associated blurring of international borders. Eventually, Merck Global commenced proceedings against Merck US in relation to the latter’s use of MERCK outside of the US and Canada.
Merck Global alleged that its US and Canadian counterpart had both breached the co-existence agreement and also infringed its trade marks by virtue of its use of “MERCK” on various websites, in email addresses and on social media platforms. Broadly speaking, Merck Global won at first instance and on appeal, but the Court of Appeal remitted five issues to the High Court for further consideration.
The recent High Court judgment resolves these five issues, one of which was Merck US’s counterclaim that Merck Global’s registered trade marks should be partially revoked for non-use.
Revocation of Merck Global’s registered trade marks
History of the revocation counterclaim
For its trade mark infringement claim, Merck Global relied on various UK trade mark registrations. The precise specifications of the trade marks varied, but in each case they covered use in respect of broad terms such as “Pharmaceutical substances and preparations” or “pharmaceutical, veterinary and sanitary preparations and substances”.
Merck US sought to revoke these trade marks on the basis of non-use. It argued that Merck Global had only used its MERCK trade mark for certain sub-categories of pharmaceutical products, and so its trade marks should be revoked to restrict the specification to pharmaceutical substances for those particular indications rather than all pharmaceuticals.
In 2016, the High Court declined to revoke the trade marks. It did so because: (i) Merck Global had used the trade mark for a broad range of pharmaceutical products; and (ii) no satisfactory scheme of sub-categories had been put forward as a framework for limiting the specifications.
The Court of Appeal remitted the issue to the High Court. In doing so, it found that it might be appropriate for some trade mark owners to retain a registration for all “pharmaceutical substances and preparations”, but that was only the case where the proprietor sold products falling in “all or substantially all sub-categories” covered by that broad term. It therefore remitted the issue to the High Court for determination.
The legal approach
The court’s role when considering whether a trade mark should be partially revoked for non-use is to consider what use has been made of the trade mark, and then to arrive at a fair specification by reference to what the notional average consumer would consider to be a fair description of those goods.
The aim is “to arrive at a fair specification by identifying and defining not the particular examples of goods for which there has been genuine use but the particular categories of goods they should realistically be taken to exemplify.” 
Use of the BNF sub-categories to determine the extent of Merck’s use
In the trial of the remitted issues, both parties referred to the British National Formulary (the “BNF”), and used it as a framework within which to consider the extent of Merck Global’s use of its trade marks.
The BNF is a joint publication of the British Medical Association and the Royal Pharmaceutical Association. It aims to provide healthcare professionals with information about the use of medicines. It divides pharmaceutical preparations into classes by their intended uses, by reference to either major body systems or to disease groups. The BNF contains 15 such sub-categories.
The High Court found that Merck Global had used its trade mark for nine of the 15 BNF sub-categories, but that the categories in relation to which Merck Global’s marks have not been used were “significant in nature and number”.
Given the extent of that non-use, the judge held that Merck Global’s trade mark specifications should be limited to “Pharmaceutical substances for the treatment of …” followed by the indications or disease groups for which there had been use. By way of example, Merck Global retained “Pharmaceutical substances for the treatment of cancer and multiple sclerosis” but not the broader category “Pharmaceutical substances for the treatment of malignant disease and immunosuppression”, nor the whole category of “Pharmaceutical substances”, which the trade marks initially covered.
A harsh outcome?
Merck Global is undoubtedly a major pharmaceutical business, and the court accepted that it had used its trade marks for pharmaceutical products used in the treatment of a broad range of diseases and across many of the human body’s systems. This included treatment for diseases of the gastro-intestinal and cardio-vascular systems, asthma, depression, the endocrine system, joints, cancers and multiple sclerosis.
If we step back for a moment, from the intricacies of trade mark law, we might ask what term most people would use to describe those products. It is easy to see the attractive force in Merck Global’s argument that most people would use a relatively broad term such as “pharmaceuticals” to describe the products which it supplies, rather than thinking in terms of the much narrower BNF’s sub-categories. It also seems likely that many people would feel that the broad term “pharmaceuticals” was fair, particularly in circumstances where Merck Global’s use was shown across so many of those sub-categories.
By analogy, a clothing retailer who has sold shirts, t-shirts, jumpers, trousers, dresses, underwear and accessories would likely feel aggrieved if they were told that “clothing” was not a fair specification to use to reflect the use that they had made of their trade mark. Indeed, in the Thomas Pink case, Birss J. found that “clothing” was a fair way to describe that range of goods, even though the trade mark owner had not sold all types of clothing and that its sales for some sub-categories of clothing was much smaller than others.
Implications for future infringement actions and filing strategies
The decision in this latest Merck judgment will, we think, seem harsh to many observers and to the notional average consumer who sits at the centre of trade mark law.
Whilst the revocation finding did not, in this case, have an implication on the infringement analysis (because of the judge’s willingness to find a likelihood of confusion under s.10(2) of the Trade Marks Act), there may be other cases where the partial revocation of a pharmaceutical trade mark does lead to there being a different overall outcome in the case.
The partial revocation of Merck Global’s trade marks also raises questions for trade mark filing strategies in the pharmaceutical sector, particularly in the light of the recent CJEU decision and subsequent High Court judgement in Sky v SkyKick.
If the approach taken in the Merck decision was to be followed in the future, then many other trade marks for “Pharmaceutical substances and preparations” are likely to be vulnerable to partial revocation given that most trade marks will not have been used for substantially all of the sub-categories in the BNF. Furthermore, following SkyKick, trade mark owners who continue to file applications for “Pharmaceutical substances” when they know that they will only be used for the treatment of a narrow range of disease groups may be open to allegations of bad faith, if their filing strategy indicates that they have sought very broad protection of their trade marks where that was not commercially justified.
Observers will therefore be keen to see if this aspect of the Merck decision is the subject of an appeal, and also if it is followed by other tribunals.
 Daimler AG v Sany Group  EWHC 1003 (Ch) cited by Arnold J in The BDO Case  EWHC 418 at -).
 Thomas Pink v Victoria’s Secret,  EWHC 2631 (Ch).
 Sky v SkyKick,  EWHC 990 (Ch).