As I’m sure everyone knows, the Johnson & Johnson (hereafter referred to as J&J) conglomerate has sued the Red Cross for using it’s trademark, the red plus sign. The reason is that the two organizations have an agreement that dates back to the late 1800’s where the Red Cross would get perpetual, free use of the trademark for non-commercial activities. This includes fund-raising, relief activities, etc. Due to the number of operations the Red Cross has mounted in recent years, the current Red Cross board decided to license their logo to other groups for a royalty. This royalty is designed as an alternate fund-raising vehicle.



Now J&J’s filing demand the following:

— Stop the Red Cross and its licensing partners from using the Red Cross
emblem permanently on first aid, preparedness and related products sold
to the public;
— Surrender to J&J for destruction the Red Cross’ inventory of accused
products;
— Hand over to J&J all Red Cross proceeds from the sale of these products
with interest; and
— Pay punitive damages to J&J along with attorney fees related to its
legal action against the Red Cross.

One would question how much money this vehicle is going to bring into the Red Cross. Ultimately it could be several hundred million dollars, but for now I am sure it is not. The Red Cross has not yet released what the anticipated proceeds from this royalty would be, but The New York Times claims that they believe it would be less than $10 million per year.

Now lets look at what J&J contributes to charity. According to Forbes, J&J is the third biggest corporate donor in the US, behind Wal-Mart and Bank of America. They donated nearly $122 million in 2004, the last year I was able to find reliable data. An attorney for J&J said that the corporation had donated over $5 million to the Red Cross in the last 3 years alone. They also contributed over $5 million to Katrina relief.

To me, this simply sounds foolish. As Seth Godin says, the Red Cross needs to be less outraged, think through their previous decisions, use a good mirror and apologize.

I am frankly nearly speechless by the Red Cross’s activities in this area. You would think that the Red Cross board would know that this decision to license products–which begin in 2004–would cause problems. I am even more flabbergasted by the apparent direct and competitive nature of the licensed products to products that J&J have sold for decades. If, as the Red Cross claims, that the products are to help Americans with their disaster preparedness, then that is a wonderful thing. However, it would have been much smarter to work with a partner like J&J. The thing that strikes me though is that the Red Cross is licensing more than just preparedness kits. They are licensing surgical gloves and other items that I assume that an average person doesn’t need. Regular latex gloves are fine for most of us.

I believe that J&J is clearly in the right, that the Red Cross is infringing on their trademark, that buy trademark law J&J is required to defend their mark or lose it.

I say that the the president of the American Red Cross, Mark W. Everson, should take his “vitriol” and swallow it along with his pride. J&J is not doing this simply to make more money. In fact, I doubt they really care about any cash settlement except as an incentive to the Red Cross. Mr. Everson, apologize, cancel your licensing agreements and manage your risk better in the future. You made the first move in signing the licensing deals. Now make the last move by correcting your mistake.