Merck Sharp & Dohme Corporation v Merck KGaA

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Andrew Phang Boon Leong JCA,Judith Prakash JCA,Steven Chong JCA,Quentin Loh JAD
• Judgment Date: 26 February 2021
• Neutral Citation: [2021] SGCA 14
• Year: 2021
• Published date: 03 March 2021
• Hearing Date: 29 October 2020
• Plaintiff Counsel: Ho Pei Shien Melanie, Lam Chung Nian, Chang Man Phing Jeremy, Lim Xian Yong Alvin and Lin Si Hui (WongPartnership LLP)
• Defendant Counsel: Professor Yeo Tiong Min SC (School of Law, Singapore Management University) as amicus curiae.,Kang Choon Hwee Alban, Mok Ho Fai and Teo Tze She (Bird & Bird ATMD LLP)
• Court: Court of Appeal (Singapore)
• Citation: [2021] SGCA 14
• Docket Number: Civil Appeal No 223 of 2019

Sundaresh Menon CJ (delivering the grounds of decision of the court): Introduction

Issue estoppel, cause of action estoppel and the doctrine of abuse of process are all principles that are part of the armoury of tools availing a court confronted with the need to act so as to prevent litigants from being twice vexed in the same matter or in respect of the same or sufficiently similar issues. At the same time, these doctrines also promote the public interest in upholding the finality of litigation. Where issue estoppel is said to arise out of a prior local decision (“domestic issue estoppel”), it is these twin rationales of protecting defendants from unfair vexation and upholding finality in litigation that principally animate the court’s formulation of the applicable legal rules. Where, however, issue estoppel is said to arise from a prior foreign decision (“transnational issue estoppel”), additional considerations come into play in shaping how the interests of justice may be best served.

In our judgment, the principles governing domestic issue estoppel as set out in The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd (nTan Corporate Advisory Pte Ltd and others, other parties) and another appeal [2015] 5 SLR 1104 (“RBS”), among other precedents, cannot apply without some modification when a court is considering transnational issue estoppel. In this respect, and especially because the application of the relevant principles might impact Singapore’s international relations, we consider it pertinent to have regard also to recent legislative developments that include the promulgation of the Choice of Court Agreements Act (Cap 39A, 2017 Rev Ed) (“CCAA”), the slated repeal of the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) and the amendment of the Reciprocal Enforcement of Foreign Judgments Act (Cap 265, 2001 Rev Ed) (“REFJA”). We think this is an opportune time for us to review, reconsider and, where appropriate, recalibrate at least some of the principles governing transnational issue estoppel. Before we develop our analysis of the legal principles, we set out the relevant factual background, which in this case goes back a considerable time.

Background The co-existence agreement on the use of the name “Merck”

The respondent, Merck KGaA (formerly known as E Merck) (“the Respondent”), and the appellant, Merck Sharp & Dohme Corp (formerly known as Merck & Co, Inc) (“the Appellant”), both trace their roots to a German family business that commenced in 1668 under the name “E Merck”. Over the years, disparate branches of the business began to operate separately and independently in Europe and North America.

In the 1970s, the predecessors of the Appellant and the Respondent entered into a co-existence agreement to govern the use of the name “Merck” in various jurisdictions around the world. This agreement was contained in two documents, respectively termed the “1970 Agreement” and the “1975 Letter”.

The 1970 Agreement provided in relevant part as follows:

AGREEMENT made January 1, 1970

between

MERCK & CO., INC. of Rahway, New Jersey, USA

and

E. MERCK of Darmstadt, Germany.

Definitions:

1.) a) ‘Merck & Co.’ as used herein shall mean Merck & Co., Inc. and its subsidiaries and affiliates. b) ‘E. Merck’ shall mean E. Merck an ‘offene Handelsgesellschaft’ according to German Law and its subsidiaries and affiliates.

…

f) ‘All other countries’ as used herein means all countries of the world other than the United States, Canada, Germany, Cuba and the Philippines.

United States and Canada:

2.) a) Merck & Co. will not object to the use of the name E. Merck in the United States and Canada by E. Merck as all or part of a firm-name or corporate name provided such names are geographically identified with Germany as follows: ‘E. Merck, Darmstadt, Germany’ all words being given equal prominence. b) E. Merck recognizes the exclusive right of Merck & Co. to the use of the trademark Merck in the United States and Canada and in such countries will not use or attempt to acquire rights in any trade mark containing Merck.

Germany:

3.) a) E. Merck will not object to the use in Germany by Merck & Co. of (i) Merck & Co., Inc. or Merck & Co. Limited as all or part of a firm name or corporate name provided such names are geographically identified with the United States or Canada as follows: ‘Merck & Co., Inc., Rahway, N.J., U.S.A.’, and ‘Merck & Co. Limited, Montrea1, Canada’, all words being given equal prominence. (ii) ‘Merck Sharp & Dohme’ as all or part of a firm name, corporate name or name of a corporate subdivision, provided such names are geographically identified with a country other than Germany, all words being given equal prominence. b) Merck & Co. recognizes the exclusive right of E. Merck to the use of the trademark Merck in Germany and in such country will not use or attempt to acquire rights in any trademark containing Merck.

All other countries:

4.) In all other countries E. Merck recognizes that ‘Merck Sharp & Dohme’ as a trademark or name is not confusingly similar to any of the trademarks or names used or owned by E. Merck and E. Merck will not object to Merck & Co.’s use and registration of Merck Sharp & Dohme as all or part of a trademark, tradename or corporate name. When requested E. Merck shall so state in writing. The embellishments of design of such trademarks shall not imitate marks owned by E. Merck. 5.) In all other countries E. Merck will not object to the use by Merck & Co. as all or part of a firm-name or corporate name of ‘Merck & Co., Inc.’ used in association with words such as ‘Rahway, N.J., U.S.A.’ which identify it geographically with the United States or ‘Merck & Co. Limited’ used in association with words such as ‘Montreal Canada’ which identify it with Canada, all words being given equal prominence. 6.) In all other countries Merck & Co. recognizes that E. Merck is entitled to use the word ‘Merck’ or combinations such as ‘E. Merck’ as a trademark or name provided that any such marks or names adopted in the future shall not be confusingly similar to marks or names adopted or used by Merck & Co. under Paragraphs 4 and 5 above. When requested Merck & Co. shall so state in writing. 7.) In all other countries Merck & Co. has undertaken to cancel all existing registrations, withdraw all applications and discontinue all use of the trademarks ‘Merck’, ‘Merck Cross’ and ‘MerckMerckMerck’.

…

The 1975 Letter set out several clarifications to the 1970 Agreement. The parties did not rely on any of its provisions in this appeal, and we therefore do not set out its terms here.

The English and Australian proceedings

The Appellant and the Respondent are embroiled in litigation in a number of jurisdictions around the world, including the United States, England, Germany, Switzerland, Mexico, India, Australia, China and Hong Kong, over the use of the name “Merck”.

Relevant for the purposes of this appeal are three English decisions (collectively, “the English Decisions”) that were handed down before proceedings were commenced in Singapore by way of HC/S 415/2018 (“Suit 415”). These comprise: a preliminary determination by the High Court of England and Wales (“HCEW”) on 21 November 2014 that the governing law of the 1970 Agreement and the 1975 Letter was German law (“the English Preliminary Decision”, being Merck KGaA v Merck Sharp & Dohme Corp & Others [2014] EWHC 3867 (Ch)); the decision of the HCEW on 15 January 2016 essentially interpreting various clauses of the 1970 Agreement, including cl 7, and holding that the agreement precluded the Appellant from using the name “Merck” on its own as a firm name or company name in “the rest of the world”, which the HCEW defined as “all countries other than those (US, Canada and associated territories [by which the HCEW appeared to mean Cuba and the Philippines] and Germany) where specific arrangements [had been] made”. The HCEW also held that the Appellant had breached this agreement (“the HCEW Decision”, being Merck KGaA v Merck Sharp & Dohme Corp, Merck & Co Inc, Merck Sharp & Dohme Limited, Intervet UK Limited, Intervet International BV [2016] EWHC 49 (Pat)); and the decision of the English Court of Appeal (“ECA”) on 24 November 2017 affirming the HCEW Decision (“the ECA Decision”, being Merck KGaA v Merck Sharp & Dohme Corp, Merck & Co, Inc, Merck Sharp & Dohme Ltd, Intervet UK Ltd, Invervet International BV [2017] EWCA Civ 1834). For completeness, we note that by the ECA Decision, some issues were remitted to the HCEW, and that gave rise to a fourth decision, Merck KGaA v Merck Sharp & Dohme Corp, Merck & Co Inc, Merck Sharp & Dohme Limited, Intervet UK Limited, Intervet International BV [2020] EWHC 1273 (Ch), which was issued after Suit 415 was commenced. However, this latest decision was not relevant to the issues in this appeal, and we therefore say no more about it.

The Appellant also relied on a decision of the Australian Federal Court dated 12 July 2019 (“the FCA Decision”, being Merck KGaA v Merck Sharp Dohme Corp [2019] FCA 1084), in which the court declined to decide separately before the trial whether the ECA Decision gave rise to issue estoppel in respect of cl 7 of the 1970 Agreement (at [19]). The substantive proceedings were subsequently settled by way of a consent order that was entered into “without admissions”, and the Respondent sought to have evidence of this adduced at the hearing before us. We disallowed the Respondent’s application because we did not consider that such evidence would assist us in this appeal.

The Singapore proceedings

On 23 April 2018, the Respondent and Merck Pte Ltd commenced Suit 415 against the Appellant and three other defendants for trade mark...