Fascinating: Some Ancient WW II History Means Merck's Choice Of Law Argument Will Likely Prevail

[Ahem -- check the new masthead -- it tells a new story, and will likely mean the continuance of this blog, in some form.] Now, in the ongoing multi-national litigation about an old 1970 agreement, on the contours of the rights to use the term "Merck" -- by the German company, and the US based one -- an even older bit of history, will now likely control this rather arcane "third year of law school" question. [Most students take "conflicts of laws/choice of law" in their third year.] Even though this is no longer solely a Merck-focused blog, I was captivated by these new details -- ones I never knew. [So we start our run, as a non-Merck focused blog -- with a Merck focused post. Irony -- that's for me (no more alts., though). . . smile.]

It turns out that in the argument over whether US (New Jersey) law, or German law should govern how the agreement is interpreted, the US government (during World War II) stepped in under the Sherman Act, and had a judge invalidate a prior version of the agreement -- as an unlawful restraint of trade. Much has happened since, but the general principle is that this action for violation of the subsequent 1970 contract was brought in the US, has long been interpreted in the US, and in fact was negotiated at a ABA meeting in St. Louis, Missouri, several decades ago -- by the GCs of each company. I think it likely that US law will govern. [I say this despite the fact that German law is governing the French lawsuit, and UK law is governing the British one. Those make out different claims under local "country-by-country" law.] Here's Friday's filing -- a 31 page PDF -- and the bit that caught my eye, below:

. . . .The earliest Agreement between the parties was entered into in 1932 ("1932 Agreement"). The 1932 Agreement recognized the right of Merck’s predecessors (“Merck Predecessors”) to the term “MERCK” in the United States, its territories and dependencies and Canada, and the right of KGaA’s predecessors (“KGaA Predecessors”) to the term “MERCK” in the rest of the world, with certain designated shared territories. See Exhibit D.

In 1943, the U.S. Department of Justice filed a civil complaint in the District Court for the District of New Jersey under the Sherman Anti-Trust Act alleging that the 1932 Agreement was an unlawful contract in restraint of trade. In 1945, Judge Forman, Judge of the District Court in Trenton, New Jersey at the time, issued a Final Judgment (the “1945 Decree”) cancelling the 1932 Agreement and requiring that Merck Predecessors notify the Department of Justice of any intention to enter into arrangements or agreements with KGaA Predecessors. Section VII of the 1945 Decree, see Exhibit E. Judge Forman also expressly retained this Court’s jurisdiction over the enforcement of the 1945 Decree:

"Jurisdiction of this cause is retained for the purpose of enabling any of the parties to this decree to apply to the Court at any time for such further orders and directions as may be necessary or appropriate for the construction or carrying out of this decree, for the amendment, modification, or termination of any of the provisions thereof, for the enforcement of compliance therewith and for the punishment of violations thereof. . . ."

So, the parties apparently could not reach agreement on choice of law, as I had earlier guessed they might. All of that would seem to militate in favor of retaining US law as the law governing this Lanham Act, and contract breaches claim -- in the New Jersey federal District courthouse.

A decision will be forthcoming in the next few weeks, by the able judge. Off for a workout, on a gray but warm Sunday late-morning here. Hang in there you little copper colored twisty shepherd moon-lette!

नमस्ते