A court in Melbourne, Australia found  Merck (NYSE:MRK) guilty of negligence in a case where the company failed to warn a doctor that Vioxx had heart risks associated with its use. The Merck Australian unit was ordered to pay $261,000 in damages as a consequence of the ruling.

Responding to the ruling, Merck almost immediately said they're going to file an appeal of the decision. what the decision meant was the alleged victim in the case, Graeme Robert Peterson, had a heart attack in 2003 partially brought on by using Vioxx.

The reason this will be fought vigorously by Merck is it's the first trial concerning the use of Vioxx outside the United States, and if the ruling were to stand, it would result in many more Australians being able to sue the company for damages from suffering heart attacks when suing the drug, which has long since been removed from the marketplace after a study revealed it could double the risk of not only heart attacks, but strokes as well.

While Merck has won over 50 percent of the 16 Vioxx lawsuits it has had litigated against it, the idea of going on almost indefinitely fighting them all caused the company to eventually create a $4.85 billion fund to use for settlement purposes.

Now that this has extended outside the U.S. and taking on class-action status, this looks like it's starting the process all over for them again, although in another nation. You see how Merck has to fight this, as if they lose in Australia, it's sure to drop like dominoes in other countries as well, making the potential payouts gigantic and possibly unsustainable.

Merck has been accused of hiding the health risks associated with Vioxx use, and the general acceptance of that as a fact has been the reason many of these lawsuits continue against them, and are now being won.

Not a good sign for the company if all their profits are eaten up by these decisions, and they continue to take public relation hits over and over again for a product they haven't had on the market for years.