With decisions of July 30 and July 31, 2013 in case LRO2013-0068 and LRO2013-0069, the Panel of the WIPO Arbitration and Mediation Center rejected the Legal Rights Objection filed against the applied-for gTLD strings .merck and .emerck by Merck KGaA (Germany) on the basis that these do not infringe the trade mark rights of complainant Merck & Co, Inc. (US). In this note both cases, which are virtually identical as to facts and motivation, will be discussed together.

Merck KGaA and Merck & Co., Inc. both pharmaceutical companies, share a common history. Merck & Co., Inc. was once founded as a subsidiary of Merck KGaA. When Merck & Co, Inc. became independent, trade mark co-existence agreements were entered into between the parties.

Both parties have trade mark registrations for the word mark ‘MERCK’. Subsidiaries of Merck & Co, Inc. are owners of US and Canadian trade marks for the word ‘MERCK’, which are registered for inter alia pharmaceutical products. Merck KGaA owns registrations for the word mark ‘MERCK’ in various countries throughout the world, apart from – as specified in the co-existence agreements – the United States and Canada. Merck KGaA also owns several registrations throughout the world for marks including the word ‘EMERCK’.

Merck & Co, Inc. argued that the gTLD strings .merck and .emerck are confusingly similar to her registered trade marks for the word ‘MERCK’ and therefore constitute an infringement of her rights in these marks. Operation of the disputed gTLD strings by Merck KGaA would cause irreparable harm to the considerable brand equity that Merck & Co, Inc. has built in its MERCK marks, which cannot be prevented by the implementation of geographically-based limitations that would give only parties outside of North America the ability to register domain names and access websites within the gTLD strings.

Merck KGaA, however, argues that this so-called geo-targeting does prevent confusion, as she already currently demonstrates by re-directing North American Internet users trying to access website content in which the Applicant is identified as “Merck”. In addition, Merck & Co, Inc. has registered various domain names including the word ‘merck’ which are not geo-limited, so that they infringe Merck KGaA’s trade mark rights registered outside North America.

In delivering its findings, the Panel first considers whether Merck & Co, Inc. has standing in these procedures, as she mainly relies on trade marks owned by its subsidiaries. No licence agreements which would demonstrate Merck & Co, Inc.’s right to invoke these trade marks in legal proceedings have been submitted, nor has the Objector asserted ownership of the subsidiaries. The Panel nevertheless finds that Merck & Co, Inc. has standing in these cases, because in its view these cases do not turn on the parties trade mark rights.

As a starting point, the Panel - rightly - rejects the view that in order to successfully obtain a gTLD a trade mark owner should own trade mark registrations in all countries of the world. If this view would be accepted, another party could prevent a trade mark owner with registrations in certain, but not all, countries from obtaining a gTLD simply by registering the relevant trade mark in an ‘uncovered’ country.

After having considered a non-exclusive list of eight factors, whereby the Panel applied the UDRP test in determining whether the gTLD strings applied for are identical or similar to the invoked trade marks, the Panel rejects Merck & Co, Inc.’s objections.

The UDRP test requires a straightforward visual or aural comparison between the trade mark and the domain name in issue, whereby the relevant trade mark needs to be recognisable as such within the domain name. On the basis of this test, the Panel concludes that the trade mark MERCK is the essence of the disputed gTLD string .merck, so that the gTLD string and the trade mark are identical. In relation to the .emerck gTLD string - marking the only difference between the two cases - the Panel notes that the “e” prefix has long been recognised as a designation for goods or services sold or delivered electronically over the Internet and has become known as a worldwide all-purpose prefix connoting Internet-related activity. EMERCK could therefore be recognised as an “electronic” MERCK. Hence, the Panel finds that the .emerck gTLD string is similar to the MERCK trade mark.

Following the considerations that Merck KGaA makes bona fide use of the marks MERCK and EMERCK, which use does not interfere with the legitimate exercise by Merck & Co, Inc. of its trade mark rights, the Panel rejects the objections of Merck & Co, Inc. Although the Panel notes that the disputed gTLD string could create a likelihood of confusion with Merck & Co, Inc.’s marks, necessary measures taken by Merck KGaA such as geo-targeting will render the possible confusion not greater than any confusion that exists as a result of two similar companies using a similar trade mark as a result of a common history.

In many instances, the new gTLD dispute Dispute Resolution Procedure has resulted in rejections of the Legal Rights Objections filed by Objectors. In that sense, the MERCK cases are no exception. However, the .merck and .emerck cases are among the first in which non-dictionary terms (compare .tunes, .home and .express) are challenged. Although the rejection of the objections may in part be explained by the common history of Merck & Co, Inc. and Merck KGaA, it will be interesting to see whether this case will set the trend regarding future non-dictionary gTLD string challenges.

Written by Denise Verdoold and Gino van Roeyen