The multitude of Merck lawsuits gets CJEU involved

The two Merck pharmaceutical magnates have shared one name for decades. However, their coexistence has become anything but peaceful, with mutual lawsuits filed all over Europe, and not without good reason. The namesakes managed to confuse everyone, including Facebook, and it is safe to say it is time for a new solution of their problem. Even the European Court of Justice (ECJ) got involved, as their case pointed a few questionable areas of the European Union Trademark Regulation.

Background of the case

Merck was established 1668 in Germany. After the World War II the company decided to split into two parts: Merck KGaA or Merck Global and Merck US. Predicting that the same name might present a problem, the parties entered an agreement where Merck US was allowed to use their name in the US and Canada, while Merck Global kept the rights to the name towards the rest of the world. However, Merck US could still operate under their full name of Merck Sharp & Dohme Corp (MSD) or with the addition of a geographical indication (like Merck US). The agreement was concluded in 1955 and renewed in 1970. Unfortunately, the 1970´s agreement could not predict the massive globalization or the Internet. Therefore, when it came to large numbers of UK citizens visiting (belonging to MSD), the problem reappeared. The confusion did not stop there, as Facebook accidentally allowed for both companies to share one Facebook domain. Another thing that did not help the situation was MSD´s new campaign, starring the word “Merck” alone, without the necessary accompaniments. And finally, Merck Germany underwent a brand makeover, calling themselves the “Originals” and adding fuel to the fire. This escalated to crossfire of lawsuits all over Europe, with both parties claiming breach of the other. On 15 January 2016 the English Court decided that MSD was overstepping the boundaries, as parts of their website were clearly intended for British customers (decision HC 13 B00955).

Future of the case

The Merck case reached a new level on 25 April 2016, when the Regional Court of Hamburg (Landgericht Hamburg) asked the CJEU for a preliminary opinion on seven questions (case C-231/16). The questions evolve around Article 109(1(a)), titled “Simultaneous and successive civil actions on the basis of EU trademarks and national trade marks”. Specifically, the article says:

 “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 EU 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 trademarks concerned are identical and valid for identical goods or services. The court which would be required to decline jurisdiction may stay its proceedings if the jurisdiction of the other court is contested;”

Firstly, the Hamburg Court asked what does the EU entail? Is a virtual “territory” the same as the material? If there are two parties operating under the same domain, does it equal to them operating on the same territory?

Secondly, what is the scope of declining jurisdiction? When an application for a national trademark was prior to the European one, is the second court supposed to decline jurisdiction only for the territory of the national trademark or does the domestic court get to decide for the rest of the EU too?

Thirdly, what is the meaning of action withdrawal? If the plaintiff withdraws the national lawsuit, does it preclude declining the jurisdiction of the second court?

Finally, in the case where only some of the registered classes of the Nice Classification are identical, which Court gets jurisdiction regarding the rest?