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The Almighty Buck

+ - Red Cross Strikes Back

Submitted by Joe the Lesser
Joe the Lesser (533425) writes "Following up on the story yesterday, the American Red Cross has issued a rebuttal to Johnson & Johnson regarding the use of the Red Cross logo in sales of preparedness kits. They state that not only did they use the symbol six years before Johnson & Johnson, but they brought up the 'Barton Agreement' which was actually never ratified and "J&J admitted this fact in testimony before Congress in 1942." Moreover, they have been selling preparedness kits with the logo concurrently with Johnson & Johnson products since 1903. The memo is below:

The following message is from Chuck Connor, Senior Vice President, Communication and Marketing:

As you all know, Johnson & Johnson filed a lawsuit on August 8, suing the American Red Cross and four of its licensing partners with respect to products sold in retail stores. The Red Cross intends to vigorously defend the suit. Following are the Red Cross rebuttals to J&J's claims. We have sent you messages and FAQs, and will be updating those in the future. Now we are sending you our essential legal arguments. We urge Red Cross units to use the following information in explaining our case to their communities.

As always, please direct any national media inquiries you receive to Carrie Martin at (202) 303-4459 or MartinC@usa.redcross.org. For additional details about the licensing program, contact Jennifer Niyangoda at (202) 303-4922 or NiyangodaJ@usa.redcross.org.

  THE FACTS AND LEGAL ISSUES IN J&J CASE

RED CROSS ESTABLISHED FIRST USE OF EMBLEM

1. J&J claims that it began using the Red Cross emblem before the American Red Cross. In fact, the Red Cross began using the red cross emblem in 1881, six years before Johnson & Johnson (J&J) began using the emblem in 1887.

2. J&J obtained a trademark registration in 1887, but did not object to the Red Cross use of the emblem at that time.

3. 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.

4. 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.

5. 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 thus passed a law making it a crime for third parties other than the Red Cross to use a red cross symbol 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

6. 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 exclusive use of the emblem to the Red Cross in a charter.

7. 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.

8. 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).

9. It is noteworthy that although J&J makes reference to the Barton Agreement in its lawsuit against the Red Cross, J&J did 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.

DISPUTE OVER EMBLEM BASED ON PROFIT

10. 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.

11. 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 jointly the red cross emblem.

12. 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 and J&J had discussions related this issue, but these conversations never led to an agreement.

13. 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.

14. 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.

J&J'S CLAIMS IN LAWSUIT DISPUTED

15. 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.

16. 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 infringed 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 this criminal stature is being used by J&J as a sword against the Red Cross.

17. 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.

18. 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.

19. 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.

20. 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."
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Red Cross Strikes Back

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