Businesses are operating in an increasingly global market place. Trade marks are essentially national and so online marketing presents a new set of issues for brand-owners. With two international businesses coming to blows over use of the brand MERCK, a brand-sharing agreement that worked for 40 years or so was put under strain. The court did not hesitate to apply the spirit of the agreement, and old-fashioned trade mark law, to internet and social media marketing methods, and called for greater control over which users can access online materials.
A bit of history
Many people are aware of the existence of two pharmaceutical giants both going under the name MERCK. The US-based group in fact grew out of the German Merck business in the 1890s. The two businesses separated, and through a series of disputes and settlement agreements made arrangements for use of the MERCK name in different parts of the world.
These arrangements have worked pretty well since the last settlement agreement in 1970, but the rapid growth in online marketing now presents new difficulties.
This came to a head recently in the UK courts, with a particular focus on whether the 1970 agreement could cover internet usage of the brand.
Merck US's online presence
Merck US operates a number of websites, using domain names such as "merck.com", "merckformothers.com", "merckresponsibility.com" and "merckmanuals.com". These sites are accessible globally and use the brand MERCK on its own.
The judge agreed with German Merck that this marketing activity breached the 1970 agreement. He was not impressed by Merck US’s arguments that:
- the websites were really targeted at the US and Canada where their use of MERCK was legitimate - accessibility from the UK is simply unpreventable "overspill"
In fact, the websites were global with parts targeted at a UK audience. For example;
- the site architecture directed users of the "msd-uk" domain to the "merck.com" website
- site visitor numbers showed very substantial non-US visitor traffic
- Merck US could have used tools such as its social media policies and "geo-targeting" to redirect website users from particular locations.
Merck US will now have to take steps to comply with the 1970 agreement. It will have to stop describing itself in any digital material addressed to the UK as "Merck". It will have to make changes to its websites and domain names, using geo-blocking and pop-ups where appropriate so that UK users know when they are leaving the UK site. It will have to review its social media activity, avoiding further use of "merck.com" and "@merck.com" addresses unless geo-targeting is used to control access from outside the US.
Merck US was also found to have infringed German Merck’s registered trade marks under the familiar doctrines of use of a trade mark in relation to identical and similar goods and services.
Online marketing has to comply with the old rules