Sunday, August 12, 2007

Most ridiculous item of the week (2007-08-12)

Long before he became part of the FBI's infamous "Goon Squad" and before he became the source known as "Deep Throat," Mark Felt handled a patent infringement case for the Federal Trade Commission, regarding a brand of toilet paper called "Red Cross" and whether it misled people in thinking they were purchasing something endorsed by the Red Cross; a non-profit, non partisan NGO.

This wasn't an isolated case. The Red Crosses and Red Crescents of the world (and in Israel, the Magen David Adom) protect their trademarks and with good reason: The symbols indicate humanitarianism and impartiality, so much so that the only other group entitled to use them are medical corps and only in times of conflict (to indicate military EMTs and physicians). Even using the Red Cross on a commercially sold first aid kit is technically illegal.

Or ... is it?

Fast forward to the third millennium. The pharmaceutical giant, Johnson and Johnson, has now turned the table and is suing the American Red Cross over its decision to license the symbol for the sale of products at commercial establishments. Everything from toothbrushes to humidifiers. What is J and J asking for? An injunction demanding the inventory be turned over so they can be destroyed.

It's kind of complicated in a way when one considers J and J had the trademark before the Red Cross was founded (how they lost it on the way, I'm not quite so sure). The two do have an agreement on who gets to use the symbol and when but that dates back to 1895. Moreover, the revenues the American Red Cross gets from the sale of the products in question is puny, about $5 million per year. In a normal year, they raise about $4 billion -- it spiked up to 6 last year because of the outpouring of donations to the Katrina relief effort.

For the life of me, I can't figure out why a charity shouldn't be allowed to sell commercial wares as part of its line of business, so long as it doesn't become its primary source or such business undermines its original purpose. It's hard to believe the same company that got out of an entire line of business during the 1980s (the decision to stop producing acetaminophen in capsule form, after two cyanide poisonings) as the ultimate act of corporate citizenship would now turn around and say that a charity that is probably one of its best customers can't go into business themselves even if the profits go right back into the charity itself.

I don't know how I'd rule in this case. How would you?

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Angry Housewife said...

I was listening to the interview between a Rep. from the Red Cross and J&J on CBCOne this weekend as I drove from Tofino. She stated that the Red Croos was founded in 1881, and J&J, was founded in 1885. Where and how did you find the info stating J&J had the symbol first? I was just hoping for th einfo, not slaggin ya at all bud..

Angry Housewife

BlastFurnace said...

The NYT article seemed to be confusing about who had the symbol first, AH. But if Congress has given the Red Cross the trademark, then J and J has no more right to use it than it would to use the Olympic Rings.

That being said ... we associate a certain amount of good will with the Red Cross symbol and if the charity is selling stuff as is being claimed than it does seem to be selling out. This sounds too much like the aspirin that was once sold by the Arthritis Foundation.