When the Law Forces You to Sue
posted by William McGeveran
I chuckled when I saw the headline on this AP story in my local St. Paul newspaper last week: Red Cross Sued for Using Red Cross. It’s often pretty easy to make trademark law look silly. (I know because I’ve spent all summer writing an article about it — coming soon to an articles editor in-box near you!). But that headline pretty much sums up the story: Johnson & Johnson has sued the American Red Cross (ARC) over the relief organization’s efforts to license the use of its red plus-sign image on medical products (like this one) that it endorses. J&J claims that it owns exclusive trademark rights to the red cross image when used on such items, and the nonprofit Red Cross can use it only to identify its core good works.
So why is Johnson & Johnson pursuing a lawsuit that gets the company lampooned in the press? And makes it look like a heartless miser? And gets it threatened with boycott? And to top it off, triggers a reaction from their opponent that stokes all those sentiments? Indeed, ARC president Mark Everson even delivered an implicit threat (via a New York Times story) to use its substantial political heft to ask Congress for special preemptive legislation (an entirely plausible scenario, though I wonder if J&J would have a takings claim):
The Red Cross products that J.& J. wants to take away from consumers and have destroyed are those that help Americans get prepared for life’s emergencies,” Mr. Everson said. “I hope that the courts and Congress will not allow Johnson & Johnson to bully the American Red Cross.
Johnson & Johnson protests that the company is a reluctant plaintiff, as its spokesman told the Times:
We deeply regret that it has become necessary to file this complaint. The company has the highest regard for the American Red Cross and its mission.
What gives?
Michael Froomkin has the answer, I think:
For non-trademark geeks, I should also perhaps explain that given the way trademark law works, if J&J didn’t sue ARC and the companies that are branding goods based on its licenses, then J&J would risk losing control of its valuable mark.
As one of those trademark geeks, that was my thought too. Common law surrounding the maintenance of trademark rights suggests that the failure to police a mark can ultimately lead to a finding that you have “abandoned” your rights. This abandonment doesn’t happen very often, but it’s such a catastrophe if it does occur that markholders pretty aggressively take care that they never appear to acquiesce to any potentially infringing use of their mark. Which means they send cease and desist letters and file complaints even against the most sympathetic defendants, when it is otherwise totally against their interest to do so.
I think this is a pretty good example of a perverse incentive. Should the legal system really force people to sue when they would prefer not to? What about a mechanism by which J&J could acquiesce for limited purposes without any adverse effect on their rights in any subsequent litigation?
[Cross-posted at Info/Law]
August 15, 2007 at 4:34 pm
Posted in: Intellectual Property
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Responses (5)
Michael Froomkin - August 15, 2007 at 5:50 pm
Such a mechanism exists. It’s called a license. :>
Seriously, though, the way is to get the ARC licensees to purport to accept they need a license from J&J.
Even that, though, has issues, at it imposes a duty of monitoring on J&J so that they can’t be accused of having given a “naked license”.
WIlliam McGeveran - August 15, 2007 at 8:20 pm
Maybe even a naked license should be a counterweight to abandonment arguments down the road. I’m looking for something J&J can do unilaterally. It would resemble what you teach a kid about avoiding unnecessary conflict: if it isn’t really bothering you, just say “that doesn’t bother me” and then ignore it.
It reminds me of how Linden Labs, the creator of Second Life, recently responded to a parody that used its logo. Instead of a cease and desist letter they sent a humorous lawyerly letter granting the parodist a “nonexclusive, non-transferable, non-sublicenseable, revocable, limited license.” Of course such things probably don’t exist in the real world. But maybe something like them should?
Sigivald - August 16, 2007 at 3:38 pm
But it is bothering J+J, and quite reasonably.
This is the ARC taking a mark that J+J was using previously to the ARC’s existence, to market health-care products, and trying to use it in the same field in direct competition with J+J.
Having read the ARC’s releases on this subject makes me very unsympathetic; when your argument boils down to “We do good stuff, so who cares about the law?”, you’re not going to get my sympathy.
William McGeveran - August 16, 2007 at 3:56 pm
Sigivald:
I agree that J&J is probably in the right, legally speaking. But I can’t imagine the amount of money involved ($2-5 million) can be worth the negative publicity of suing the Red Cross. If this were a different sort of dispute for that amount of money, J&J should evaluate the costs and benefits and walk away rather than sue. Here, I would imagine, J&J feels forced to sue only because of the underlying law.
alan p - August 18, 2007 at 6:04 pm
Would J&J’s claim stand up in court though? After all, The Red Cross used the red cross before being chartered, from 1881 iirc, and its hardly as if the red cross is not in general usage.
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