Consent as the Connecting Thread: High Court stays national IP and contract claims under Art. 136 EUTMR and Brussels Recast; strict Order 11 evidence reaffirmed

Introduction

In Merck KGaA & Ors v Merck Sharp & Dohme LLC & Anor [2024] IEHC 613, the High Court (Barrett J) confronted a dense knot of parallel trade mark and contract litigation spanning multiple jurisdictions, all springing from two global “Merck” corporate families whose shared 17th‑century origin belies their now competing interests. The plaintiffs (“German Merck”) sued Merck Sharp & Dohme LLC (“US Merck”) in Ireland for breach of the 1970 co‑existence agreement (as supplemented in 1975), and sued Merck Sharp & Dohme Ireland (Human Health) Ltd (“MSD Ireland”) for Irish trade mark infringement and passing off. The gravamen was to restrain “Merck” use in Ireland by the US Merck group.

The application before the Court was brought by the defendants to: (i) set aside leave to serve US Merck out of the jurisdiction (Order 12, rule 26 RSC), (ii) decline or stay jurisdiction over the Irish trade mark claim under Article 136 EUTMR, (iii) alternatively stay under Articles 29/30 of the Brussels I Recast (EUJR), and (iv) stay the balance under the Court’s inherent jurisdiction. Central to the Court’s task were overlapping EU-wide EUTM proceedings pending in Germany and prior UK judgments, with diametrically opposed approaches already visible between English and German courts regarding the meaning of the 1970 Agreement (both applying German law).

At a factual level, the Irish claims rested on “slim pickings” in Ireland: a handful of “@merck.com” email addresses, a US Merck vice-president’s attendance at a 2019 Irish conference, and the supply of hard copies of a long‑standing Merck veterinary manual to UCD—against the backdrop of a primarily Internet‑based dispute.

Summary of the Judgment

• The Court set aside the 31 July 2023 order granting leave to serve US Merck out of the jurisdiction (Order 12, rule 26 RSC), holding that the plaintiffs failed to provide mandatory affidavit particulars enabling the Court to assess comparative cost and convenience under Order 11, rule 2. Submissions are no substitute for evidence.
• The Court stayed the Irish trade mark infringement claim against MSD Ireland under Article 136(1)(b) of the EU Trade Mark Regulation (EUTMR), given the close relationship with pending EUTM infringement proceedings in Germany and the risk of conflicting decisions.
• The Court stayed the balance of the proceedings (including passing off) under its inherent jurisdiction to avoid fragmented and potentially irreconcilable adjudication.
• In reaching these outcomes, the Court emphasised that “consent” to use of the “Merck” sign is an essential element in both trade mark infringement and the pleaded breach of contract, creating a common juridical core that triggers lis pendens/related actions logic (Articles 29/30 EUJR) and Article 136 EUTMR. The Court adopted a “broad brush” and “err on the side of caution” approach to relatedness and risk of irreconcilable judgments.

Analysis

Precedents Cited and How They Shaped the Decision

1) Order 11 service-out: Donnelly v Vivier [2022] IECA 104; Trafalgar v Mazepin [2023] IEHC 195; Analog Devices; IBRC v Quinn

Donnelly and Trafalgar confirm that on a motion to set aside service out (Order 12, rule 26), the plaintiff bears the burden of proving that the case falls within an Order 11 gateway and must supply affidavit particulars necessary for the Court to exercise its discretion under Order 11, rule 2. This includes comparative cost and convenience evidence. The standard on merits is a “good arguable case,” but the service-out jurisdiction is exercised with care and circumspection out of comity. The Court held that German Merck provided no evidence—only submissions—on why Ireland was “without doubt” preferable to New Jersey for the contract claim. That omission was fatal.

2) Substantial connection: Grehan v Medical Inc [1986] ILRM 627

Grehan warns against allowing service out where there is only a tenuous connection with Ireland, and requires a real connection in fact and law. Here, the alleged Irish breaches (notably US-allocated “@merck.com” emails) pointed to the US as the true locus. The few Irish instances did not satisfy the substantial connection threshold to force a US defendant to litigate in Ireland.

3) Related actions and caution: Websense v ITWAY [2014] IESC 5

The Supreme Court instructs courts to adopt a broad, autonomous interpretation of “related actions” (now Article 30 EUJR) aimed at avoiding conflicting reasoning, and to “err on the side of caution” (following AG Lenz in Owens Bank v Bracco). Barrett J applied this admonition to the interlocking contract/TM disputes, already producing conflicting UK and German outcomes under German law.

4) “Same cause” and the centrality of consent: Easy Rent a Car v Easygroup [2019] EWCA Civ 477

Easy Rent explains that “consent” is an essential element of trade mark infringement (and of misrepresentation in passing off). Critically, when one suit seeks a declaration of consent under a contract and the other alleges infringement “without consent,” the two may share the same “cause” and “objet” for Article 29 purposes—even if one is framed in contract and the other in tort. The High Court relied on this reasoning: German Merck’s Irish contract claim and its German EUTM infringement claim both turn on whether US Merck had consent to use “Merck.” That common denominator heightened the risk of inconsistent decisions and justified a stay.

5) EUTMR Article 136 (formerly Art. 109): CJEU Case C‑231/16 Merck KGaA

The CJEU held that simultaneous actions based on national and EU marks can involve the “same cause of action,” and that the “subject matter” overlaps to the extent both actions concern the same territory; the second court must decline jurisdiction as to the overlapping territory where marks are identical and cover identical goods/services (now Art. 136(1)(a) EUTMR) and may stay where they are similar or goods/services are only similar (Art. 136(1)(b)). The Court also noted (via the AG) that entities in the same corporate group with indissociable interests may, exceptionally, be treated as the “same parties.” Barrett J applied these principles, finding this case fell within Art. 136(1)(b) at least, given the figurative Irish marks vs the word EUTM and the group-company configuration.

6) The Tatry (C‑406/92) and Palumbo (C‑144/86)

These decisions provide autonomous definitions of “same cause” (“facts and rule of law”) and “same object” (the “end in view”), and accept mirror-image claims (e.g., non‑liability vs liability) as the same cause/object. They also clarify that partial identity of parties triggers a tailored response (declining jurisdiction only to the extent of overlap) and that “irreconcilability” for Article 30 seeks to avoid contradictory reasoning, not merely mutually exclusive enforcement consequences. Barrett J used these tools to focus on reasoning risks across jurisdictions rather than formal labels.

7) LTJ Diffusion (C‑291/00)

LTJ provides the strict test for identity of sign (no modification/addition; trivial differences that go unnoticed by an average consumer may still count as “identity”). This mattered to whether Article 136(1)(a) (mandatory) or 136(1)(b) (discretionary) applied, given German Merck’s own pleadings (in both Ireland and Germany) asserting identity between “Merck” and its marks. The Court nonetheless proceeded under the discretionary route of 136(1)(b), which was more than sufficient to stay.

Legal Reasoning

A. Order 11: Evidence, not assertion

The plaintiffs had to show a gateway (Order 11, rule 1) and then furnish affidavit particulars enabling the Court’s mandatory discretion under rule 2 (comparative cost and convenience) to be exercised. They did neither adequately:

• No affidavit evidence comparing Ireland to New Jersey as litigation fora. Assertions in written submissions (“it is clear… Ireland is without doubt the appropriate forum”) do not satisfy rule 5’s requirement for sworn particulars.
• Grehan’s “more-than-tenuous” Irish connection was not met: the tiny number of Irish instances, many US-originating (US assigned emails; global app store listings; conference not organised by MSD), did not justify service out.

Result: the service-out order was set aside under Order 12, rule 26.

B. Article 136 EUTMR: Irish TM claim stayed

The German EUTM proceedings and Irish national TM claim both target the same practical object: restraining the “Merck” sign use in Ireland. Even if plaintiffs framed differences (word vs figurative marks; US Merck vs MSD Ireland), the Court found:

• Identity/similarity: On the plaintiffs’ own pleadings, identity/similarity was alleged. LTJ permits a strict-yet-realistic identity analysis. At minimum, similarity triggered Art. 136(1)(b) discretion to stay.
• Same cause/parties: CJEU Merck recognises that national vs EU mark claims can be the “same cause” where the marks and facts correspond, and that group companies with indissociable interests may be treated as the same parties exceptionally.
• Risk of inconsistency: The UK and German courts had already diverged on the 1970 Agreement under German law. Continuing in Ireland risked compounding conflicts on consent and contractual interpretation.

Result: the Irish TM claim against MSD Ireland was stayed under Art. 136(1)(b).

C. Articles 29/30 EUJR: the safety net

Even if doubt lingered on Article 136, Articles 29/30 supplied an overlapping framework:

• “Same cause/object” (Art. 29): Easy Rent shows consent ties contract and TM claims. The core enquiry—did US Merck have consent to use “Merck”?—is common across fora, making parallel proceedings vulnerable to inconsistent outcomes.
• “Related actions” (Art. 30): Websense demands a broad approach and caution. Given Internet ubiquity, cross‑border access, and German proceedings’ advanced stage, the risk of irreconcilable reasoning was palpable.

Although the Court did not have to rest its decision on Articles 29/30, their logic infused the analysis.

D. Inherent jurisdiction: staying the rest

With service out set aside and the TM claim stayed, it was appropriate to stay the remaining Irish claims (including passing off) to avoid fragmented adjudication and inconsistent reasoning.

E. Additional threads

• Group-company defendants: The Court was alive to plaintiffs’ tactical selection of MSD Ireland alone for the Irish TM claim. CJEU and AG authority allows courts to look past form to the indissociable interests of group companies for lis pendens purposes.
• Geo‑Blocking Regulation: The German court’s refusal to grant geo‑blocking relief illustrated the constraints EU law may place on remedies—another reason to avoid conflicting mandates across Member States.
• Own‑name defence: While EUTMR now confines this to natural persons, the German “same‑name”/equilibrium jurisprudence—and the 1970/1975 co‑existence framework—remained highly relevant in Germany. Those doctrines further raised the risk of divergent judicial approaches if Ireland proceeded.

Impact

• Parallel IP litigation: Litigants should expect Irish courts to stay national trade mark actions where closely connected EUTM proceedings are first‑seised elsewhere, even if:
  • the national marks are figurative and the EUTM is a word mark;
  • the defendants differ within the same corporate group.
• “Consent” bridges contract and tort: Where both trade mark and contract claims hinge on consent to use a sign, Irish courts will treat them as sharing a core juridical basis for lis pendens/related-actions analysis. Fragmenting claims across jurisdictions risks stays and loss of momentum.
• Order 11 discipline: Ex parte service‑out applications must be underpinned by sworn, particularised evidence on comparative cost and convenience. Assertions in written submissions will not suffice. The low threshold on merits does not dilute the evidential burden on convenience.
• Group-company strategy: Suing a local subsidiary in an attempt to sidestep Article 136 or Articles 29/30 may fail if group interests are indissociable. Courts will look to substance, not labels.
• Remedies and EU regulatory overlay: The Geo‑Blocking Regulation may constrain available online remedies. This amplifies the need to coordinate litigation strategy at EU level rather than piecemeal national proceedings.
• Comity and caution: Websense’s “err on the side of caution” is alive and well. Irish courts will prefer stays over proceeding in parallel where the risk of conflicting reasoning is real.

Complex Concepts Simplified

• Article 136 EUTMR (simultaneous/successive EU and national TM actions):
  • (a) Mandatory decline where trade marks are identical and for identical goods/services, between the same parties, and proceedings concern the same territory.
  • (b) Discretionary stay where marks or goods/services are only similar.
  • Partial territorial overlap matters: the “subject matter” is the overlap of territorial effect.
• Articles 29/30 EUJR (Brussels I Recast):
  • “Same cause/object” (Art. 29): focuses on facts and legal basis (cause) and end in view (object). Mirror-image claims can be the same cause/object (The Tatry; Palumbo).
  • “Related actions” (Art. 30): very broad. The test is a risk of irreconcilable judgments (conflicting reasoning), not necessarily mutually exclusive outcomes. National courts should err on the side of caution (Websense).
• Consent in trade mark law:
  • Under EUTMR and the Trade Marks Act 1996, “without the proprietor’s consent” is an essential element of infringement. If consent exists, there is no infringement.
  • That is why a contract claim about whether consent was given (and on what terms) can overlap juridically with an infringement claim.
• Identity vs similarity of signs (LTJ Diffusion):
  • Identity is strict but pragmatic: trivial differences that the average consumer would not notice may still be “identity.”
  • Where identity is uncertain, courts can still stay under the similarity limb (Art. 136(1)(b)).
• Own‑name vs same‑name doctrines:
  • EUTMR’s “own name” defence now only protects natural persons.
  • German “same‑name”/equilibrium principles may nonetheless inform private law relations and coexistence agreements—one source of the UK/German judicial divergence here, and a reason to avoid parallel adjudications.
• Geo‑Blocking Regulation:
  • Prohibits unjustified blocking or limiting access to online interfaces based on location. Exceptions exist where required by law.
  • It may limit a court’s ability to order geographic blocking of global websites—an important remedial constraint to consider in IP litigation strategy.

Conclusion

This judgment delivers three clear messages. First, service out of the jurisdiction demands disciplined affidavit proof on convenience. Without it, leave will be set aside. Second, where a plaintiff pursues overlapping national and EU trade mark and contract claims across Member States, and the core legal issue (consent) is common, Irish courts will readily stay national proceedings under Article 136 EUTMR and, if necessary, Articles 29/30 EUJR to avert conflicting reasoning. Third, tactical pleading choices—suing a local subsidiary; styling marks as figurative vs word; isolating causes of action—will not obscure substantive overlap where group interests are indissociable and the object is the same: to restrain use of a sign.

Against the backdrop of starkly divergent UK and German analyses of the same 1970 Agreement (both applying German law), Barrett J deliberately adopted the Websense “err on the side of caution” approach, privileging comity, coherence, and the unitary character of EU trade marks over national fragmentation. For IP and commercial litigators, the case provides a robust roadmap: centralise overlapping EU/national disputes where possible; expect Article 136 stays where you do not; and never neglect the evidential rigour Order 11 demands.