In the Courts: Johnson & Johnson vs the American Red Cross

The Red Cross on white background was the original protection symbol declared at the 1864 Geneva Convention. During the Russo-Turkish War (1876-78), the Ottoman Empire used a Red Crescent because its government believed that the cross would alienate its Muslim soldiers. (Photo: International Federation of Red Cross and Red Crescent Societies)

Red Cross organizations use as their symbol a reversal of the colors of the Swiss national flag, in tribute to Henri Dunant and the other founders of the original organization in Geneva. It is an evocative symbol: medical aid on a basis of neutrality to warring sides on battlefields, visits to and monitoring of prisoners in camps and jails, distribution of parcels and letters to prisoners, exchange of prisoners and special missions bringing medical, nutritional and other emergency aid to both combatants and civilian populations in war zones, are some of the things that come to mind. The symbol suggests a humanitarian, non-profit-making image.

But it can also be a profit-making trademark, as for the company Johnson & Johnson (J&J). In the U.S. the company filed a lawsuit against the American Red Cross in August 2007, alleging trademark infringement. How was it possible for both parties to have used the same symbol from the late nineteenth century to 2007, apparently without effective challenge?

J&J began using the symbol in 1887, after it was first formally adopted in Switzerland in 1864. The American Red Cross was founded in 1881, receiving a Congressional Charter in 1900 which prohibited use of the symbol by others. Since J&J had been using it for thirteen years before this prohibition, the company was allowed to retain it, and claimed that in 1895 Clara Barton, founder of the American Red Cross, had agreed to the company’s exclusive right to its use for its products (the “promissory estoppel” claim). 

What changed the situation for J&J was that the Red Cross came to use the symbol on products it sold to consumers and that in 2004 it began to license other companies to use the symbol for products such as hand sanitizers, emergency and first aid kits which were in direct competition with J&J products. The objectives of the lawsuit were to prevent the Red Cross from using and licensing the symbol on first aid kits, safety gear and related products, to ensure the destruction of such products still in existence, and to obtain punitive damages and payment of J&J’s legal costs.

U.S. District Judge J. Rakoff dismissed the “promissory estoppel” claim in November 2007, by ruling that the Red Cross never agreed to refrain from using the symbol for first aid, health, safety and emergency preparedness products. What remained was J&J’s claim that the Red Cross violated federal law by licensing the symbol to other companies. Judge Rakoff ruled against this, too, in May 2008. He seems to have been much influenced by the continuing charitable, non-profit-making nature of the Red Cross: he noted that the Congressional Charter logically covered use of the symbol for business purposes which served its charitable aims and that ultimately its licensing activities raised funds for the non-profit-making work of the Red Cross. He also pointed out the irony of J&J itself having entered into just this type of licensing agreement with the Red Cross!

There is another irony in Judge Rakoff’s dismissal of the Red Cross counterclaim that J&J misused the symbol and committed trademark infringement. He found it absurd that, if the Red Cross were correct that J&J could only sell kits containing exactly the same products as those sold up to the early 1900s, “J&J would be constrained to continue forever selling kits that contain such antiquated products as cat gut ligatures and kidney plasters.”

The Johnson & Johnson logo on some of their earliest products. (Photo: Johnson & Johnson)

In the final outcome, the passage of time also went against J&J. As Judge Rakoff said in his May 2008 ruling, since the American Red Cross “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.”

Remaining issues were J&J’s claim that the Red Cross deliberately interfered with J&J’s relationship with two companies and its breach of contract claims against four companies that sold items bearing the symbol. But by this time, J&J’s prospects for a successful lawsuit had so far receded as to bring about a settlement between the two parties in June 2008 without further legal process. The parties reached an agreement that allowed them both to continue using the symbol.

Damage to its reputation may have been a factor in J&J’s decision to settle out of court. Is a victory of profit over philanthropy worthwhile? For that was the perception of some of the media and members of the public. Whereas the CEO of J&J stated that the lawsuit was undertaken, albeit reluctantly, to protect the firm’s trademarks, the Red Cross affirmed in the proceedings that the profits from the sale of products bearing the symbol went into its relief efforts. The public image of corporate power can hardly compete with that of an institution which has demonstrably served and continues to serve among the most powerless on earth.