J&J had further accused ARC of trademark dilution. In order to prove that cause of action, J&J would need to show that the red cross is distinctive as a marker of J&J's goods. Judge Rakoff noted that ARC has used the red cross as an emblem for more than 100 years. ARC historically used the emblem to identify workers, shelters and first aid supplies, and other products, including on buildings to denote places for blood drives. ARC's right to use the emblem was granted by congress. J&J's right to use the emblem is part of the "grandfather" proviso, and Judge Rakoff said the law was clear that a "grandfathered" user cannot use dilution law to trump the use for an emblem granted by congress to the ARC. In addition, there is no evidence that users of ARC products confuse them with J&J's products.

ARC's counterclaims under consideration include J&J itself violating Section 706 by impermissibly exceeding its grandfathered rights--saying J&J was not using the emblem for the same purpose and class of goods as before 1905. The court said no violation had occurred; prior to 1905 J&J's emblem was used on medicine, pharmaceutical preparations, dental, medicinal, and surgical appliances, and cosmetics. Judge Rakoff said that J&J's current uses were legally equivalent to its uses in 1905 and were in fact the same class of goods, even if those goods were updated to reflect current technologies. All three of ARC's counterclaims were dismissed.


What is the result of these legal rulings? First, the ruling establishes that ARC has the right to license the famous red cross symbol for commercial purposes and not be in violation of federal law or the Geneva Convention. In addition, now that most of the causes of action and counterclaims have been dismissed, the issues in the case are focused to J&J's three remaining claims and the two counterclaims of the other codefendants. J&J's claim against ARC is limited to one: tortious interference with contracts, referring to J&J's former agreement with FAO and Water-Jel not to use the red cross emblem. J&J's other claims to be decided at trial are breach of contract by FAO, and breach of contract by Water-Jel due to their licensing agreement with ARC. Trial should be scheduled on those issues shortly.

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