Over the last few years, a long-running dispute has heated up between the US and European pharmaceutical companies that both trade under variations of the name “Merck”.

The two businesses have common ancestry, having both originated in a family-run apothecary shop in Darmstadt in Germany. The US business had increasingly become separate to the European business, and over time they had to work out how to prevent confusion in the marketplace and did so with various co-existence agreements. Merck US took North America, and the European one took the rest of the world. Ultimately, these truces did not last and the two businesses ended up in litigation.

Generally, IP rights are territorial, i.e. if you have a UK trade mark you can prevent others using that trade mark in the UK. If you have a trade mark in, say, the USA, that does not give you the right to prevent use in the UK. The complication comes when you attempt to determine where the use actually is. Is a US website, run by a US company targeting the UK?

The High Court found that Merck US’s website did target the UK. Merck US appealed and the Court of Appeal has sent the decision back to the High Court to look at it again with a little further guidance.

The Court of Appeal summarised the law (in a nutshell) as requiring an assessment of whether the average consumer in the UK would perceive the website (or ad) as targeting them. The court will look at all of the relevant factors. Those factors include the obvious ones, e.g. currency, delivery options, language, etc., but the court can also look at more beyond the website, such as the intention of the trader and the nature of the business, types of goods or services being sold and numbers of visits to the website from the UK.

The Court of Appeal’s guidance is fairly clear, but intended to be of broader application. The really interesting part comes when we have a few more examples of the lower courts deciding what is required for a website to target the UK. There are a few in the pipeline, so watch this space.