The controversy surrounds the use of the Red Cross or the Geneva Cross against a white background. The Geneva Convention was a result of Henry Dunant's efforts to supply humanitarian assistance to the wounded on the battlefield and the distinctive Red Cross was a product of the Convention for the Amelioration of the Wounded in Armies in the Field. More recently, under the Federal Criminal Code, Section 706, the Red Cross may not be used or displayed by anyone other than the American Red Cross ("ARC") itself. Johnson & Johnson ("J&J") unhappy with ARC having licensed such use to four other parties, pursued litigation.
Judge Rakoff noted that "on the face of it Section 706 does not prohibit ARC from making any use whatever of the Red Cross emblem and words." His interpretation is based primarily on one, the Charter Act of 1910 which emphasizes this "breath of use" and second, the lack of prohibition in Section 706 for ARC's use of emblem and words.
The Charter Act of 1910 states that the use of the logo is prohibited by any one other than those already mentioned "for the purpose of trade or as an advertisement to induce the sale of any article whatsoever or for any business or charitable purpose”. The licensing agreement which ARC entered into was "for the purposes of trade" and to "induce the sale of an article." The licensing agreements also do "not contravene Section 706" as the purpose of such agreement is charitable, thereby legitimizing the entire use. Further, licensing to third parties, who under agreement such as "cause marketing" used the logo for similar purposes, is not prohibited. For the cases where the third parties make use of the logo for profit, there is still no violation of Section 706 because ARC expressly permitted such use. The opinion states specifically "In both cases, ARC itself is engaging in a use the statute permits, and the subsequent uses of the Red Cross emblem and words by the parties with whom ARC contracts, not to mention those still further down the usage chain, cannot be held to violate 706 without thereby rendering nugatory the permission granted ARC for the initial use."
Significantlym, J&J claimed that ARC's trademark should be invalidated which was subsequently counterclaimed. Premised on the violation of Section 706, a claim for invalidating the trademark, the exclusive use of which was granted by Congress to ARC 100 years ago, failed. The Court found that since Section 706 was not violated, the question of invalidating the trademark rights owned by ARC is moot.
The saving grace for J&J was that, it remained in legitimate use of the logo and was not indulging in commercial uses inconsistent with the purpose originally determined. J&J falls into the excepted "grandfathered" user, it's use will be protected if the use of the "the emblem “for the same purpose and for the same class of goods” as it was before 1905." (See fn 13. in Opinion: "The grandfather clause of 18 U.S.C. § 706 reads: “This 13 section shall not make unlawful the use of any such emblem, sign, insignia or words which was lawful on the date of enactment of this title.”). The Court finding that J&J's commercial uses were consistent with the pre-1905 uses, declined to grant ARC's allegation that J&J's current use exceeded those granted by the "grandfathered" clauses.
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Other Comments:
"In his opinion, Judge Rakoff noted the Red Cross had an agreement dating as far back as 1904 to use its logo on first-aid kits sold by a New Jersey company called First Aid Supply of the Red Cross, in exchange for a small sales commission."
Thus, Judge Rakoff lays stress on the existence of licensing agreements as far back as 1904. Steering his interpretation towards the "purpose" being consistent with the Charter Act and the lack of prohibition on licensing if the purpose was "charitable, business oriented" and "authorized" by ARC, Judge Rakoff implied that ARC had a free hold on deciding the use of the logo.
"The judge also said there could be little confusion in consumers' minds about the difference between a J&J product and one merely endorsed by the Red Cross."
That's self explanatory really!
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