Merck 2014 Annual Report Download - page 218

213CONSOLIDATED FINANCIAL STATEMENTS → Notes to the Group accounts
(48) PROVISIONS
Provisions developed as follows:
€ million Litigation Restructuring Personnel
Environmental
protection Other Total
January 1, 2014 772.3 202.8 201.6 111.2 217.9 1,505.8
Additions 125.1 44.1 130.8 9.9 167.3 477.2
Utilizations – 332.3 –104.2 – 58.2 –12.1 – 36.4 – 543.2
Release – 260.3 – 8.3 – 24.4 – 3.4 – 25.1 – 321.5
Interest portion 5.0 – 1.5 17.3 – 23.8
Currency translation 22.5 2.1 14.2 0.8 4.5 44.1
Changes in scope of
consolidation / Other 60.8 – 1.3 – – 60.5 1.6
December 31, 2014 393.1 136.5 266.8 123.7 267.7 1,187.8
thereof current 140.5 65.5 120.0 11.3 224.4 561.7
thereof non-current 252.6 71.0 146.8 112.4 43.3 626.1
Litigation
As of December 31, 2014, the provisions for legal disputes
amounted to €393.1 million (2013: €772.3 million). Many of the
legal disputes and official proceedings currently pending relate to
the Biopharmaceuticals division. The legal matters described below
represent the most significant legal risks.
Product-related and patent disputes
The litigation risk with Israel Bio-Engineering Project Limited
Partnership ( IBEP ) was eliminated as of the end of 2014. IBEP
asserted claims for property rights and the payment of license fees
for the past and the future. These legal disputes were connected to
the financing of medical research projects in the early 1980s. The
Group had taken appropriate accounting measures for these legal
disputes in the past. As of year-end, the Group achieved a written
settlement with IBEP according to which the legal disputes were
settled in exchange for a sum of money. The provision recognized
in previous years was partly used and the remainder was released.
Rebif®: The Group is involved in a patent dispute with Biogen Idec
Inc., USA, (Biogen) in the United States. Biogen claims that the
sale of Rebif® in the United States infringes on a Biogen patent.
The disputed patent was granted to Biogen in 2009 in the United
States. Subsequently, Biogen sued the Group and other pharma-
ceutical companies for infringement of this patent. The Group
defended itself against all allegations and brought a countersuit
claiming that the patent was invalid and not infringed on by the
Group’s actions. AMarkman hearing was held in January 2012;
a decision has not yet been announced. The parties are currently
engaged in court- ordered mediation proceedings that have not yet
officially ended. It is currently not clear when a first-instance
decision will be made. The Group has taken appropriate account-
ing measures.
In the Performance Materials division, the Group is in negotiations
with a competitor regarding potential patent infringements. The
Group maintains that the competitor’s patent infringement asser-
tion is invalid owing to relevant prior art. The competitor has
threatened to file patent infringement lawsuits. The Group has
taken appropriate accounting measures for this issue.
Antitrust proceedings
Raptiva®:
In December 2011, the Brazilian federal state of São Paulo
sued the Group for damages because of alleged collusion between
various pharmaceutical companies and
an association of patients
suffering from psoriasis and vitiligo.
The collusion is alleged to
have aimed at an increase in the sales of the involved companies’
drugs to the detriment of patients and state coffers. Moreover, in
connection with the product Raptiva®, patients have filed suit to
receive compensatory damages. The Group has taken appropriate
accounting measures for these legal disputes in the financial state-
ments.