Jun 9, 2016

'MERCK': Still Very Much a Globally Divided Brand

We previously reported on a case in the Chancery Division of the High Court, in which German company, Merck KGaA, succeeded in a claim of trade mark infringement against US Company Merck & Co. Inc. relating to use of the 'MERK' trade mark ("Mark") in the UK. See article entitled "'Merck': A Globally Divided Brand – Trade Mark Infringement" here.

Co-existence Agreement

The two very similar sounding companies have been involved in various disputes relating to the use of the Mark in different jurisdictions.   The dispute was initially addressed in 1955 by way of a co-existence agreement ("Agreement").  Under the terms of the Agreement the US Company was allowed to use the Mark in the U.S. and Canada and that the German company could use the Mark in the rest of the world.  However, the agreement did not address use of the Mark on the company's websites and on social media (for obvious reasons!)

Also the Agreement did not stipulate the governing law (note that a well drafted agreement will have a governing law clause should there be any dispute)

Jurisdiction and Decision

At a preliminary hearing before the present case the court concluded that the agreement was governed by German law.

In the present case the Court ruled that use of the Mark on the US Company's website constituted UK trade mark infringement of the German company's rights, on the basis that the website was global and therefore directed to the UK.

The Court also held that under German law, the Agreement governed the use of the word MERCK as a trade mark on the internet, even though the agreement did not specifically state this.

It is possible that had the Agreement been governed by the laws of a different jurisdiction that the wording of the co-existence agreement would have been interpreted differently.

Appeal of High Court Decision to the Court of Justice of the European Union

The US Company Merck & Co. Inc has been appealed to the Court of Justice of the European Union (CJEU).

In such circumstances the appealing party normally refers one or a number of 'questions' to the CJEU for determination.  Such questions are usually based on the interpretation, and points of, law.

The questions referred to the CJEU relate to the interpretation of Article 109(1) (a) Council Regulation (EC) No. 207/2009.  This Article provides that a court shall stay its proceedings for infringement if there are prior proceedings in another court in the EU between the same parties for the same cause of action where the trade marks are identical for identical goods and services.

The Article states:

"1. Where actions for infringement involving the same cause of action and between the same parties are brought in the courts of different Member States, one seized on the basis of a Community Trade mark and the other seized on the basis of a national trade mark:

(a) The court other than the court first seized shall of its own motion decline jurisdiction in favour of that court where the trade marks concerned are identical and valid for identical goods or services.  The court would be required to decline jurisdiction may stay its proceedings if the jurisdiction of the other court is contested."

(b) …"

The question referred to the CJEU asks if the term "same cause of action" should apply to use of a worldwide and therefore EU wide internet presence and online content.

The CJEU ruling is expected soon however this appears to be one dispute that will rumble on for many years yet.

Posted by: in: Civil Procedure, Contract, News, Trade Marks

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