Red Cross Beats J&J In Federal Court

June 2, 2008       Mark Hrywna      

The American Red Cross (ARC) is free to use the red cross emblem on products it sells to further its mission under protections granted by Congress in its federal charter more than a century ago, a federal judge ruled.

Johnson & Johnson (J&J), a New Brunswick, N.J.-based healthcare conglomerate, filed eight claims last September regarding the human service agency’s use of the red cross emblem on health and safety products, some of which were sold by J&J’s competitors. A judge dismissed some of the claims in November.

The charter gave ARC the right to use the a Greek red cross on white background, the emblem described in the first Geneva Convention, in carrying out its purposes, said Jed Rakoff, judge for the U.S. District Court, Southern District of New York.

“There is no evidence in the record to suggest that members of the general consuming public see the Red Cross name and emblem as a designation of J&J’s products rather than as a designation of ARC or the International Red Cross,” the judge wrote in a 33-page ruling. “Because ARC has used the name and emblem for over 100 years and has been granted exclusive use of the name and emblem by Congress, J&J cannot seriously argue that the words “Red Cross” and the Red Cross emblem serve as an exclusive designation of J&J products.”

J&J had argued that use of the red cross emblem by other companies violates federal statute, which prohibits any use other than by those grandfathered in, like J&J, and the Red Cross. The Red Cross said it’s been using the emblem since it was founded by Clara Barton 1881 and has been selling first aid kits and other safety and health products since at least 1903.

Acting Red Cross President and CEO Mary S. Elcano said, “Within our charter, (we) can absolutely do this, use the symbol as we have been, in health and safety products in any forum we’ve chosen, whether Wal-Mart, Target, or through chapters, within the authority of its charter and consistent with Geneva Convention.”

Incoming CEO Gail J. McGovern will take over the post on June 23. “We hope J&J will work with us to bring this dispute to a prompt end so we can focus on what’s important: delivering lifesaving Red Cross services to the American people,” she said.

In a statement after ruling, J&J spokesman Marc Monseau said: “We are pleased that the court upheld J&J’s use of its Red Cross trademark over the past century as entirely appropriate under federal law, and that the court upheld our right to pursue the tortious interference and breach of contract claims. We are disappointed that the court rejected our claims involving ARC’s commercial uses of the emblem. We are reviewing the decision and look forward to continuing this process to resolve our legal dispute with the American Red Cross.”

Two of the four co-defendants had prior settlement agreements with the pharmaceutical company that the Red Cross did not know about. That part of the litigation may be held over for trial, Elcano said. “We very confident that whole,” she said.

Several claims and counterclaims remain for trial, but Elcano said the litigation for all intents and purposes is over for the Red Cross. There are three claims remaining and only one “tangentially” affects the Red Cross, in that it allegedly interfered with contractual relations, she said. The Red Cross was unaware that two of the four co-defendants, Water-Jel Technologies and First Aid Only had previous agreements with J&J when it entered into agreements with the two companies, Elcano said.

Due to the complexity and significance of the trademark case, Elcano said outside counsel was hired. Though most of the charges are expected to be covered by insurance, Elcano said the litigation has been extremely disruptive, taking resources away from the organization’s mission.

“We felt compelled to defend the brand. It’s an international brand, as well. For J&J to come at us the way they did was the kind of thing the Red Cross had to protect,” Elcano said.

In recent years, the Washington, D.C.-based Red Cross has entered into agreements with companies to market health and safety related products, in some cases with companies that are competitors to J&J. In that original filing, the company had asked for proceeds, interest, punitive damages and attorney fees related to the legal action, and for the products themselves so they can be destroyed.

Asked whether the litigation will affect the relationship between the two organizations, Elcano said, “For me, it’s just how business goes. Let’s face it, it’s an excellent company, in American business and internationally. It’s our hope that these two iconic organizations can work together.”

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This article is from NPT Weekly, a publication of The NonProfit Times.

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