Johnson & Johnson Sues Red Cross

The New York Times has a story about a trademark lawsuit today that sounds as if it wants to be a law school exam, or maybe the background noise for a legal thriller.

Johnson & Johnson (J&J) is suing the American Red Cross (ARC) for trademark violations. The chronology is a little complicated, but the lawsuit is very simple: J&J alleges that it has a deal with the ARC, in which J&J gets exclusive rights to commercial use of the red cross symbol on bandages and the like. That deal is over a hundred years old (the Rule Against Perpetuities, it seems, doesn't apply to licenses…). After observing this ban for a century, J&J alleges, few years ago the ARC suddenly licensed the mark to some makers of “humidifiers, medical examination gloves, nail clippers, combs and toothbrushes” and emergency supply kits. J&J says they tried to negotiate, offered mediation, to no avail.

The ARC says the lawsuit is immoral: a spokesman is quoted as the complaint is “obscene” and “simply so that J.& J. can make more money.” (Er, hello? Isn't that what corporations do?)

But in fact, honoring your agreements is a moral thing to do too, and the NYT article is strangely silent on the question of whether the ARC admits the agreement with J&J exists, or whether it has some claim that the even if it did exist the agreement is now invalid. To me, that's like the dog that didn't bark in the nighttime — if the ARC thought the agreement wasn't valid, wouldn't it say so?

Ironically, J&J's original claim on the red cross design mark probably stems from a quirk in trademark law: at least before the most recent amendments, trademark law was strictly national. In other words, just because someone held rights to a mark abroad gave them no advantage in claiming rights over that mark here unless they actually used it here. As a result, it was pretty common for Americans to go abroad, see a nice trademark, come home and start an unrelated business using the mark, then win a lawsuit when the original foreign company tried to come into the US market.

It looks, from this timeline I've constructed (corrections welcomed!) like J&J may have done just that:

1863: The International Committee of the Red Cross (ICRC) is founded in Geneva, Switzerland, as a private humanitarian institution.

1887: The year J&J claim to have first used the mark in commerce in the USA.

1895: The ARC & JJ sign the deal that is the basis of the J&J suit today.

1900: ARC chartered by Congress for non-commercial purposes.

1906: J&J gets a federal registratrion for the red cross mark, citing 1887 as the date of first use

1910: ARC acknowledges there are some senior users of the mark (unclear if it named J&J, however)

1919: The International Federation of Red Cross and Red Crescent Societies (IFRC) founded. As part of the many high-minded things said at this founding, the IFRC leaders suggest they won't cheapen the mark with mere commerce.

Incidentally, Marketplace Radio is doing a story on all this, and I may be part of it. The show airs at 6:30pm on the east coast on public radio stations. It will be on WAMU if you're looking for an internet stream.

Update: For non-trademark geeks, I should also perhaps explain that given the way trademark law works, if J&J didn't sue ARC and the companies that are branding goods based on its licenses, then J&J would risk losing control of its valuable mark. So the facts that J&J is a big, rich multinational, ARC is a humanitarian organization routinely mismanaged by Republicans, and the dollar value of the contracts is small (I heard $5 million), all these are pretty much irrelevant.

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11 Responses to Johnson & Johnson Sues Red Cross

  1. The red cross is a very special trademark; see 18 U.S.C. s. 706, which makes it a crime to use the red cross or the words “red cross” without the authorization of the American National Red Cross. There’s an exception for users senior to the enactment of the provision. There’s also not a use in commerce requirement in the section.

  2. Michael says:

    The J&J complaint is actually a little odd on the sec. 706 issue. It lists as an independent count “violation of 706″ by the licensees. But I don’t read a private right of action into 706, do you?

    I can certainly see the argument that but for the agreement with J&J, ARC’s license would serve as a defense to sec. 706 and allow use, perhaps even over the Lanham Act objections of J&J (which statute is last in time?). But I don’t think we need to go there if the agreement is valid and enforceable.

  3. St. Paul said, “For me all things are permissible, but not all things are profitable.”

    For everyone in the world, the red cross logo means The Red Cross. No lawsuit will change that and it has only served to ruin J&J’s reputation.

    I am a marketing minded consumer and I didn’t even realize that they had a red cross logo until I heard about this law suit.

    They should just give the logo to the Red Cross.

    My extended comments on the idiocy of this law suit:

    http://adventuresinautism.blogspot.com/2007/08/johnson-johnson-shows-their-true-colors.html

  4. spyac says:

    I want to call a National Boycott of Johnson and Johnson products!!!

    JnJ has decided to sue the American Red Cross over use of the Greek cross. JnJ filed a lawsuit against the American Red Cross and four of its licensing partners for “unlawful conduct” related to the nonprofit’s use of the Red Cross emblem. What a shame that a multi billion dollar corporation wants to bully a charitable organization that helps Americans and people all over the world in times of need. Here are some of the facts.

    THE FACTS AND LEGAL ISSUES IN JOHNSON & JOHNSON SUIT AGAINST THE AMERICAN RED CROSS

    Red Cross Established First Use of Emblem:

    The Red Cross began using the red cross emblem in 1881, six years before Johnson & Johnson (J&J) began using the emblem in 1887.
    J&J obtained a trademark registration in 1887, but did not object to the Red Cross use of the emblem at that time.
    The Red Cross was first chartered by Congress in 1900, and that charter was amended in 1905. The 1905 amendment gave the Red Cross the use of the emblem, and specifically stated that “in carrying out its purposes under this [charter], [the Red Cross] may have the use, as an emblem and badge, a Greek red cross on a white ground…” The Charter grants the Red Cross “to conduct other activities consistent with” its Charter purposes.
    In the 1905 Charter amendment, Congress intended the Red Cross to have the exclusive use of the emblem, and this was confirmed by the U.S. Patent and Trademark Office (PTO) when they specifically reserved an application serial number for the Red Cross to register its Emblem in EVERY class of goods and services without limitation.
    J&J was concerned that it would lose its right to use the emblem on its products, so it lobbied congress to allow it to continue, or “grandfather” its use of the red cross symbol. Congress passed a law making it a crime for third parties other than the Red Cross to use a red cross symbol fraudulently but also permitted J&J and the dozens of other companies to continue to use the red cross emblem for only those products used by those companies as of that time. Congress made this a criminal statute specifically to protect the Red Cross from unauthorized users of the emblem.

    “Barton Agreement” Never Ratified

    In 1895, when Congress was first considering legislation to charter the Red Cross, J&J went to Clara Barton and negotiated an agreement (the “Barton Agreement”) that would have permitted J&J to continue to use the red cross emblem if Congress gave the use of the emblem to the Red Cross in a charter.
    The Barton Agreement was effective only if Congress passed a specific law that would have prohibited J&J from continuing to use a red cross symbol. Congress did not pass the law, so the agreement never took effect.
    Thus, the Barton Agreement was effectively rendered null and void. J&J admitted this fact in testimony before Congress in 1942 in hearings in the House of Representatives on the “Protection of the Name and Emblem of the Red Cross.” 77th Cong., 2d Sess. 279-81 (1942).
    It is noteworthy that although J&J makes reference to the Barton Agreement in its lawsuit against the Red Cross, J&Jdid not quote the limiting language in the complaint, nor did it include a copy of the Barton Agreement with its other exhibits attached to the complaint, nor did it even allege ANY breach of the agreement by the Red Cross. In fact, there is no claim of ANY breach of the Barton Agreement by the Red Cross in the lawsuit.

    Dispute Over Emblem Based on Profit

    The Red Cross has been selling first aid kits commercially in the United States since 1903. Until now, J&J has never challenged this activity. Thus, for over 100 years, J&J and the Red Cross enjoyed their concurrent right to use the red cross emblem in commerce.
    In fact, over the past century, J&J and the Red Cross have joined in lawsuits against infringers of the right of the Red Cross and J&J to use the red cross emblem.
    In 2003, J&J began to complain to the Red Cross about licensing third parties to sell Red Cross first aid kits in retail stores. Red Cross tried to partner with J&J on preparedness and on this issue, but these conversations never led to an agreement.
    J&J then began telling retail stores that carried Red Cross products that there was “an existing trademark dispute” between J&J and the Red Cross.
    During the past several years, on several occasions, J&J has tried to convince the Red Cross to limit its use of the red cross emblem on licensed products in retail stores. Only within the past three weeks has it become apparent to the Red Cross that J&J was possibly doing more than saber-rattling. Since that time, the Red Cross has been working carefully, analyzing its legal position and weighing options.

    Red Cross Disputes J&J’s Claims in Lawsuit

    J&J’s first claim is for “Contractual and Equitable Estoppel.” This claim does not mention any breach of any contract, and does not mention at all the Barton Agreement. It merely claims that the Red Cross made certain historical statements that it “would not enter into such commercial licenses” regarding the sale of certain Red Cross products that J&J relied upon to its detriment.
    J&J’s second claim is for “Violation of 18 U.S.C. § 706.” J&J alleges that the Red Cross and its licensing partners are somehow violating this statute. What J&J’s lawsuit fails to recognize is that this criminal statute originally was passed by Congress as a shield to protect the Red Cross from other companies that fraudulently infringe upon the right of ARC to use the red cross emblem. At no time has any federal agency, including the Department of Justice, ever claimed that the Red Cross was in violation of the use of its red cross emblem that Congress gave to it more than 102 years ago. Now J&J is attempting to use this criminal statute as a sword against the Red Cross.
    J&J’s third and final claim is for a claim that does not even involve the Red Cross. It is for a separate issue against one of the Red Cross’s licensees.
    In its claims for relief, J&J asks the court to order the Red Cross from undertaking any “sale to the consuming public” of emergency preparedness and related products, even on the Internet and through Red Cross chapters and outlets. More amazing is the request that the court order the Red Cross to surrender to J&J all of these preparedness products “for destruction” by J&J.
    To date, the Red Cross has generated about $2 million in funds for the organization from the sale of these products in retail stores. In contrast, J&J recently made $11 billion in profits in one year. This lawsuit is not about any threat to J&J’s retail business.
    In short, this lawsuit is a direct attack on the American Red Cross and its right to use the red cross emblem—a right that was given by Congress. Both the Red Cross and J&J have the legal right to use the emblem as they deem necessary to fulfill their respective missions, for the Red Cross to prepare the public for emergencies and disasters, and for J&J to make money in the marketplace. There is no merit to any of the legal claims asserted by J&J in this lawsuit. The Red Cross intends to vigorously defend the suit. We will not let J&J take the Red Cross out of the name American Red Cross.

    The American Red Cross helps people prevent, prepare for and respond to emergencies. Last year, almost a million volunteers and 35,000 employees helped victims of almost 75,000 disasters; taught lifesaving skills to millions; and helped U.S. service members separated from their families stay connected. Almost 4 million people gave blood through the Red Cross, the largest supplier of blood and blood products in the United States. The American Red Cross is part of the International Red Cross and Red Crescent Movement. An average of 91 cents of every dollar the Red Cross spends is invested in humanitarian services and programs. The Red Cross is not a government agency; it relies on donations of time, money, and blood to do its work.

  5. Very interesting back story. Thanks for the information. What I’m curious about, Professor, is what “recent amendments” you are referring to with regard to trademark law no longer being strictly national?

    Notwithstanding some exceptions, including the Benelux registration and the Community Trade Mark, trademark law is still very much national. This is certainly true in the US.

    The Paris Convention allows for claims of priority based on foreign trademark filings, but, generally, registering a mark in one country gives the owner no substantive rights in another country.

    There are a few decisions out there where an owner of a foreign trademark has been able to assert those rights in the United States, but this is by no means a settled area. There is little to prevent the trademark poaching you describe in your post

  6. Michael says:

    It’s true that TM law is still national. But combine the Madrid Protocol with world-wide ‘use’ via the Internet…

  7. Greg says:

    Sometimes it isn’t so moral to enforce a legal agreement. If you were rushing someone to a hospital, would you appreciate a cop holding you up a few minutes while he enforces the law and gives you a ticket? (But if you were feigning an emergency to hide your lead foot tendency, that’s different.)

  8. x says:

    yes, the law states blah blah blah and sometimes the law takes us away from the bigger picture.

    if it is true that the red cross started using the logo before jnj, i personally feel that they can do very well whatever they want with it.

    the fact that they are starting to sell their image to other companies making emergency and first aid products like the “much needed child grooming kit” to me seems completely irrelevant, and it will likely serve to marr their image as a reputable organisation anyway.

    they may be digging a pr hole for themselves, but is that reason enough to sue them?

  9. Jeff says:

    I agree 100% and will now stop all purchases of Johnson & Johnson, until they apologize for ever even thinking of this ridiculous lawsuit, especially after all the the Red Cross does for those in need. Talk about a Greedy J & J. Pitiful. Spread the word, boycott J & J.

  10. Michael Lee says:

    Why didn’t JNJ simply license the mark to ARC for a pittance?
    This resolves nearly everything.
    Michael Lee

  11. Sean Dix says:

    I believe that J&J is guilty of multiple anti-trust violations including sending someone to infer the many ways in which J&J could have me killed and make it look like a suicide or an accident if I tried to sue J&J for influencing CNN to do a hatchet job on my invention “FlossRings” which aired ironically on the 100th year anniversay that J&J began selling floss and just two weeks before the FlossRings were placed in the national museum of dentistry. You can read the whole story which J&J has never denied on my website at http://www.FlossRings.com

    Sincerely,
    Sean Dix
    The FlossRing Company
    145 East 15th Street
    New York, NY 10003
    http://www.FlossRings.com

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