Merck is involved in legal proceedings and government investigations, the outcome of which cannot currently be predicted. We also continue to bear the risks from certain proceedings against companies of the Generics group that we sold to Mylan in 2007. Thus Merck continues to be responsible for risks arising from cases concerning drug pricing in the United States. In addition, the Merck Serono division is involved in a licensing dispute in Israel as well as a dispute with a former sales partner in Italy. In the United States, our subsidiary EMD Serono is discussing a settlement of a civil claim by the U.S. Department of Justice in relation to sales of a product. In Germany, Merck is involved in antitrust proceedings concerning the exclusive distribution agreement with the laboratory wholesale distributor VWR International. Due to a preliminary decision by the Higher Regional Court of Düsseldorf, Merck is obliged to supply several of the products in its Laboratory Business to other laboratory wholesalers in Germany as well.
The company has taken all possible measures to protect its own legal position. Should individual products of the Merck Group prove to be defective and/or display undesirable side effects, this could lead to possible claims for damages and legal proceedings owing to product liability.
As a research-based company, Merck has a valuable portfolio of industrial property rights, such as patents and brands. These can become the target of attacks and infringements. We have taken the necessary precautions to identify threats and defend our rights where necessary. Generally, Merck endeavors to prevent legal risks from arising.
A compliance program applies to our employees worldwide, which enjoins them to comply with laws and guidelines, and provides them with the relevant training and support. The core of the program is the Merck Code of Conduct, which defines ethical behavior guidelines. This is complemented by a training and testing program, a SpeakUp Line for reporting compliance violations, as well as a global network of compliance officers.
Insofar as possible and practical, the company limits liability and damage risks through insurance coverage, the type and scope of which is continually adjusted to current requirements.