IP Cases & Articles

Merck & Co Inc (MCI) v Merck KGaA (MKG) – gTLD Decision

In two recent related decisions, which are amongst the first in which non-dictionary generic top-level domain (gTLD) terms have been challenged, a World Intellectual Property Organisation (WIPO) Arbitration and Mediation Centre panel has rejected objections against gTLD applications to register .merck and .emerck.

The objector Merck & Co, Inc (MCI) and the defendant Merck KGaA (MKG), share a well documented common history in relation to the trade mark MERCK. MCI was originally founded as a subsidiary of MKG and after the companies split at the end of the First World War, they agreed to co-exist. MCI subsidiaries maintained the rights to use the name MERCK in the US and Canada and MKA had the rights to use the name everywhere apart from the US and Canada. MKA owns various trade mark registrations throughout the world for 'EMERCK' and 'MERCK'. MCI's group companies mainly use the name 'MSD' for their activities outside the US and Canada.

MCI argued that the gTLD strings .merck and .emerck were confusingly similar to its registered trade marks for the word 'MERCK' and that the applications by MKG took unfair advantage and unjustifiably impaired the distinctive character and reputation of their marks and therefore constituted an infringement of their rights.

The panel recognised that the companies were both bona fide users of the mark in different territories. It said that, as a result, the owner of trade mark rights in some but not all countries of the world should not be prevented from obtaining a gTLD. Indeed, there was no realistic alternative to taking this position because it would be hugely burdensome for trade mark owners to obtain trade mark rights 'worldwide' before being eligible to file gTLD applications.

Although the panel noted that the disputed gTLD strings could create a likelihood of confusion with MCI's marks, this would not be greater than any that may exist already as a result of the common history between the parties. MKG made clear that it would take all necessary measures, including so called 'geo-targeting', to prevent internet users in the territories in which MCI had relevant trade mark rights (US and Canada), from being able to visit websites that used the new gTLDs. Geo-targeting is a function that enables the targeting of websites to potential customers located in particular geographical areas.

The WIPO panel was not inclined (or obliged) to interpret the existing terms of the coexistence agreements between the parties. In dismissing the objections, it did however make clear that its decision was without prejudice to any judicial proceedings existing now or in the future involving the parties.

The case highlights the clear problems with global gTLD rights being granted where two companies have a history involving a common name with geographical distinctions. One thing is for sure - the situation is only likely to become more complex and litigious for these companies and it is ever more important that clear and unambiguous coexistence agreements play a key role. Where possible these should anticipate future technological and other developments such as (in this case) the registration of gTLDs, although comprehensive 'future-proofing' will always be a challenge.