We recently hailed — as very good news — the disclosure in court that these two massive international public companies were set to conduct a mediation with a preeminent but retired federal judge “as referee“, to try to work out a “win/win” settlement — without a “winner take all” federal Lanham Act trial in the NJ federal courts, and high likelihood of… truly jaw-slacking damages — for one of the parties.
To make those discussions meaningful, both sides need to know just how much the other is making in the US off of the name, wordmark and branding called “Merck” — as two separate companies are employing the same one. Here’s that request, from the US company, for updated US finanacial performance info, and a bit:
…Merck’s request is simple and falls squarely within the heartland of Federal Civil Procedure Rule 26(e). Merck asks only that defendant Merck KGaA (“KGaA”) update the documentary evidence (compiled in four spreadsheets) that it previously produced concerning its sales and expenses in the United States. This information is relevant to Merck’s request to recover “defendant’s profits” as “compensation” for KGaA’s misconduct, as the Lanham Act expressly authorizes the Court to grant. 15 U.S.C. § 1117(a). Merck’s request is fully consistent with ordinary litigation practice. Damages numbers are routinely brought forward in intellectual property cases before trial to avoid giving a defendant a free pass for misconduct in the period since the close of discovery. The information requested is entirely within KGaA’s control. It is routine business information of a kind that KGaA already has produced, and that both sides’ experts have already used to calculate KGaA’s U.S. profits….
KGaA’s representation that Merck has not alleged continuing harm (ECF No. 320 at 30:21-22) is belied by the Pretrial Order. For example, Merck’s Disputed Facts section on liability emphasized the continuing nature of KGaA’s misuses, and the harm it causes Merck. See, e.g., ECF No. 311 at 73 ¶ 72 (“Defendant’s intentional illegal use of the ‘Merck’ name has caused and will cause continue to cause irreparable and ongoing harm to Plaintiffs’ trademarks, reputation, goodwill, and business in the future…. This harm is ongoing and capable of being repeated.”). In the damages section, Merck stated that its reported disgorgement calculations are understated due to the limited scope of KGaA’s prior financial disclosures. See id. at 76 ¶ 4 (“These numbers are limited by the financial data that Defendant produced through fact discovery, and do not reflect additional damages incurred due to Defendant’s unlawful rebranding to date.”). These points are not new: Merck has always maintained that KGaA’s misuse is continuing….
Merck respectfully requests the Court order KGaA to produce updated U.S. sales and expenses figures to complete its production of “[d]ocuments sufficient to show, on a monthly basis, the marginal costs, fixed costs, and profit margins for each of the goods or services sold in the United States by or on behalf of Defendant since January 1, 2006….”
Now you know, Condor predicts this letter motion will be granted. And so — onward — with summer-like weather here at elevation: gonna’ be in the 70s today, while it was below 18, with deep snow, until just two days ago. Blue skies ahead… Woot!
नमस्ते
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