J&J vs. Red Cross: The Battle Continues

Nov 14, 2007
By Pharmaceutical Executive Editors

The American Red Cross never promised Johnson & Johnson that it wouldn't market commercial products branded with the red cross emblem that the two organizations have shared for more than a century. That, at least, seems to be the opinion of Judge Jed S. Rakoff of the US District Court for the Southern District of New York, who last week dismissed J&J's claim of "promissory estoppel." However, the other seven claims in the suit—including four others that ARC and its codefendants had challenged—remain intact.

"We were pleased with the court's decision, which allows the case to proceed as planned," Marc Monseau, director of corporate media relations for J&J, told Pharmaceutical Executive.

The "promissory estoppel" claim was based in part upon an 1895 agreement between J&J and ARC's Clara Barton on how the two parties would handle the red cross logo in the event that Congress passed pending legislation regulating its use. ARC argued to the court that in the absence of that legislation, the agreement meant nothing, and in addition, Red Cross had marketed items similar to those in question at several points in its history.

The other claims ARC wanted dismissed included:

The claim that ARC had engaged in intentional interference with J&J's "prospective economic advantage."

A pair of claims that ARC partners Water-Jel Technologies and First Aid Only had violated trademark-related settlements.

A claim that ARC had induced Water-Jel and First-Aid Only to violate those settlements.

ARC went straight for the heartstrings in its press release on the court's decision: "I appreciate the court's decision and hope that Johnson & Johnson will reassess their actions and drop the case altogether," Mark W. Everson, ARC's president and CEO was quoted as saying. "As the recent wildfires in California demonstrated, the Red Cross has an important mission to perform, and we want to put this distraction behind us and do the work the American people expect us to do."

Red Cross's role in caring for the distressed poses a real danger for J&J, says one legal expert. "There may very well be legitimate concerns from a trademark-law standpoint," Helen Minsker of Banner & Whitcoff in Chicago told Pharm Exec. "But, to me, it seems like a terrible public relations risk for Johnson & Johnson. This is inevitably going to result in bad press for J&J. There's just no way around it." Minsker added that while it's too early in the case to make a decision on the strength of the company's case, some of her colleagues were stunned by J&J's decision to follow through with the suit. Minsker said, "Pretty much everybody I talked to, their first reaction was, 'They did what?' I think the next reaction was, 'Surely they could've found a way to work this out.' My guess is that some place along the way they probably will." In its initial press release regarding the suit, J&J claimed that it had attempted to engage the American Red Cross in mediation, but that it had been rebuffed.

Minsker agrees, at least in part: "You have [J&J and the American Red Cross] over the years having worked out whatever differences they might have had. … It's pretty extraordinary that suddenly there doesn't seem to be dialogue any more."

The American Red Cross did not respond to requests for information for this article.

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