When Goliath Sues David
The two most storied brands in pharmaceuticals and rescue & relief are going toe-to-toe. Johnson & Johnson and the Red Cross have peacefully shared the iconic red cross symbol for more than 100 years–until now. J&J is suing the Red Cross for trademark infringement, claiming that the charity has violated their original agreement of 1895 by licensing use of the red cross logo on products in direct competition with the drug giants’.
From an intellectual property perspective, I’m sympathetic to Johnson & Johnson’s situation. When a company allows their brand to be diminished–whether by a well-known non-profit or cutthroat competitor–they’re opening the door for others to follow suit. It’s well within their rights (and their responsibilities to their shareholders) to protect their intellectual property and their brand.
But when we move from a business perspective toward a communications perspective, it is critical that companies consider the potential for fallout. J&J tried to avoid the suit. They asked the Red Cross to settle the dispute by mediation. They even offered to allow the Red Cross to pick the mediator. But the Red Cross, for all of its great work, knew that they held the sympathetic trump card and apparently never responded to J&J’s gracious offers. J&J, feeling trapped between setting an unfortunate intellectual property precedent and a public relations free fall, moved the legal wheels forward, and decided to suffer the slings and arrows of the marketplace. (This strategy is the opposite of the way McDonald’s chose to handle a sticky situation recently.)
Unfortunately, J&J didn’t just file an injunction, demanding that the Red Cross stop using the logo as part of a fund raising scheme through deals with other companies competing products. They didn’t just demand that the Red Cross void its current competing licensing contracts and refrain from creating new ones that would violate the 1895 agreement. What they did do was sue for costs and punitive damages–and when they did that, they created a symbol–a target really–that moved the story from ‘a company protecting its intellectual property’ to ‘a greedy company suing America’s sweetheart of a charity’.
It’s well within J&J’s legal rights to request that the Red Cross destroy all existing products that fall outside of the 1895 agreement, and to forward all profits from the sales of these products to J&J. But that doesn’t mean it is right from a brand-building and communications standpoint.
For more than a century, J&J’s products have benefited from the Red Cross’s iconic brand of rescue and relief. Given a choice of first aid products side-by-side at the drugstore, we choose the one with the red cross logo. That symbol tells us that the product will have just what we need to protect our family’s well-being. And that means that J&J has benefited as much from the Red Cross’s use, as the Red Cross has benefited from J&J’s century-long benevolence.
The Bottom Line: When it comes to your company’s decision to litigate against a sympathetic and valuable adversary, make sure that the lawyers work with marketing, public relations, and other communications and brand professionals so that every possible consequence is considered.
Perhaps J&J could have just closed its checkbook to the Red Cross–they had made $5 million dollars in donations over the past three years, which trumped the money the Red Cross was making from the new, competing licensing agreements.
But if they had to litigate, remember, damages claims send their own separate message to communities. J&J has a great brand; I hope this situation doesn’t tarnish it.
