Update: On Merck “Naming Rights Spats” Around The Globe: Mixed Outcome In Mexico… SEC Form 10-K

I have been busy with other things, but I did want to provide the “soup to nuts” update on all of this, that one might not otherwise see, which is. . . buried deep, at near the bottom of page 105, of the SEC Form 10-K Merck filed Thursday after market close — for the readership.

In it, we learn that Merck should soon hear about additional trademark decisions out of Germany, and won in part (and lost in part) in Mexico — last month. Here’s the bit:

. . . .As previously disclosed, in January 2016, to protect its long-established brand rights in the United States, the Company filed a lawsuit against Merck KGaA, Darmstadt, Germany (KGaA), historically operating as the EMD Group in the United States, alleging it improperly uses the name “Merck” in the United States. KGaA has filed suit against the Company in France, the UK, Germany, Switzerland, Mexico, India, Australia, Singapore, Hong Kong, and China alleging, among other things, unfair competition, trademark infringement and/or corporate name infringement. In the UK, Australia, Singapore, Hong Kong, and India, KGaA also alleges breach of the parties’ coexistence agreement.

In December 2015, the Paris Court of First Instance issued a judgment finding that certain activities by the Company directed towards France did not constitute trademark infringement and unfair competition while other activities were found to infringe and constitute unfair competition. The Company and KGaA appealed the decision, and the appeal was heard in May 2017. In June 2017, the French appeals court held that certain of the activities by the Company directed to France constituted unfair competition or trademark infringement and, in December 2017, the Company decided not to pursue any further appeal.

In January 2016, the UK High Court issued a judgment finding that the Company had breached the co-existence agreement and infringed KGaA’s trademark rights as a result of certain activities directed towards the UK based on use of the word MERCK on promotional and information activity. As noted in the UK decision, this finding was not based on the Company’s use of the sign MERCK in connection with the sale of products or any material pharmaceutical business transacted in the UK. The Company and KGaA have both appealed this decision, and the appeal was heard in June 2017. In November 2017, the UK Court of Appeals affirmed the decision on the co-existence agreement and remitted for re-hearing issues of trademark infringement, the scope of KGaA’s UK trademarks for pharmaceutical products, and the relief to which KGaA would be entitled. The re-hearing was held, and no decision has been handed down. In November 2018, the District Court in Hamburg, Germany dismissed all of KGaA’s claims concerning KGaA’s EU trademark with respect to the territory of the EU. In accordance with the Judgment of the Court of Justice of the EU delivered in October 2017, the District Court in Hamburg further held that it had no jurisdiction over the claim by KGaA insofar as the claim related to the territory of the UK. KGaA has appealed this decision.

Further decisions from the District Court in Hamburg, Germany, in connection with claims concerning KGaA’s EU trademark, German trademark and trade name rights as well as unfair competition law with respect to the territory of Germany are expected on February 28, 2019.

In January 2019, the Mexican Trademark Office issued a decision on KGaA’s action. The court found no trademark infringement by the Company and dismissed all of KGaA’s claims for trademark infringement. The court ruled against the Company on KGaA’s unfair competition claim. Both KGaA and the Company have appealed this decision. . . .

Obviously, the German court is overdue, on handing down its trademark decision — so we will watch for that. It would seem that the amount of legal fees piling up around the globe will soon begin to approach at least the lower end of the range of damages being sought worldwide. When, in the experienced trial lawyer’s view, will it be time, for Mr. Frazier. . . to settle? That’s a puzzlement to me — especially as each side wins only in part, around the world — and each side loses in part — as well, it seems.

Now you know — mini polar vortex arriving here — and I’m out grilling a rib-eye. That’s how we do — at 10,200 feet!


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