61ST CONGRESS HOUSE OF REPRESENTATIVES 2d Session

REPORT No. 1592

AMERICAN NATIONAL RED CROSS

JUNE 15, 1910.-Referred to the House Calendar and ordered to be printed

Mr. DENBY, from the Committee on Foreign Affairs, submitted the

following

REPORT

[To accompany S. 6877]

The Committee on Foreign Affairs, to which was referred the bill (S. 6877) to amend an act entitled "An act to incorporate the American National Red Cross," approved January 5, 1905, respectfully reports it back to the House with the recommendation that it be passed.

Attention is called to H. R. 22311 and the report thereon (H. Rept. 1256), now pending on the House Calendar, having been favorably reported from the Committee on Foreign Affairs, which bill is identical in its objects with the one hereby reported.

348

H. R. 22311, SIXTY-FIRST CONGRESS, SECOND SESSION

(SEE S. 6877)

Hearings held by Committee on Foreign Affairs, House of Representatives, Thursday, April 21, 1910

THE RED CROSS

COMMITTEE ON FOREIGN AFFAIRS,

U. S. HOUSE OF REPRESENTATIVES,

Thursday, April 21, 1910.

The committee met at 11:35 o'clock a. m., Hon. David J. Foster (chairman) presiding.

(The committee had under consideration the following bill:)

[H. R. 22311, Sixty-first Congress, second session]

A BILL To amend an act entitled "An act to incorporate the American National Red Cross," approved

January 5, 1905

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section four of the act entitled "An act to incorporate the American National Red Cross" is hereby amended to_read_as follows:

"SEC. 4. That from and after the passage of this act it shall be unlawful for any person within the jurisdiction of the United States to falsely or fraudulently hold himself out as, or represent or pretend himself to be a member of, or an agent for, the American National Red Cross, for the purpose of soliciting, collecting, or receiving money or material; or for any person to wear or to display the sign of the Red Cross or any insignia colored in imitation thereof for the fraudulent purpose of inducing the belief that he is a member of or an agent for the American National Red Cross. It shall be unlawful for any person, corporation, or association, other than the American National Red Cross and its duly authorized employees and agents and the army and navy sanitary and hospital authorities of the United States, to have or to use within the territory of the United States of America and its exterior possessions the emblem of the Greek Red Cross on a white ground, or any sign or insignia made or colored in imitation thereof, or of the words "Red Cross" or "Geneva Cross" or any combination of these words in connection with the said emblem or without connection with it for any purpose whatsoever: Provided, however, That owners of trade-marks heretofore registered in the United States Patent Office in pursuance of the trade-mark laws of the United States, and owners of trade-marks for the registration of which applications were filed prior to January fifth, nineteen hundred and five, in the United States Patent Office, and for which registration upon such applications has been or shall hereafter be made in pursuance of the laws of the United States, shall not be deemed forbidden by this act to use such trade-marks in accordance with the terms thereof.

"If any person violates the provisions of this section he shall be deemed guilty of a misdemeanor, and upon conviction in any federal court shall be liable to a fine of not less than one or more than five hundred dollars, or imprisonment for a term not exceeding one year, or both, for each and every offense.'

SEC. 2. That the following section is hereby added to said act:

"SEC. 8. That the endowment fund of the American National Red Cross shall be kept and invested under the management and control of a board of nine trustees, who shall be elected from time to time by the incorporators and their successors, under such regulations regarding terms and tenure of office, accountability, and expense as said incorporators and successors shall prescribe.'

There appeared before the committee Maj. Gen. George W. Davis U. S. Army, retired, chairman of the central committee of the American National Red Cross; Miss Mabel T. Boardman, a member of the central committee of the American National Red Cross; and William C. Henderson, esq., of Washington, D. C., representing Johnson & Johnson, a corporation, of New Jersey.

STATEMENT OF WILLIAM C. HENDERSON, ESQ., OF 501 F STREET, NW., WASHINGTON, D. C.

The CHAIRMAN. Whom do you represent?

Mr. HENDERSON. I represent Mr. Archibald Cox, of New York City, who is counsel for Johnson & Johnson, of New Jersey, manufacturers of a large line of pharmaceutical preparations. Mr. Cox expected to be present in person today to present the case to the committee, but I received a telephone message from him yesterday and a letter this morning in which he states that because of another engagement he finds it impossible to leave New York to be here today, and so he has asked me to represent him, and he has sent me a paper containing a concise statement of his views on this subject. Perhaps it would be well for me to read his letter. I am not so familiar with the subject as he is, because he has studied it, while I have just been called into the case.

The CHAIRMAN. Very well; read the letter and let it be inserted in the record.

Mr. HENDERSON. This letter is as follows:

WILLIAM G. HENDERSON, Esq.

NEW YORK, April 11, 1910.

DEAR SIR: By reason of engagements which I cannot break, it will not be practicable for me to be in Washington on the 12th instant, and I accordingly beg to request that you will appear for me at the hearing of the House Committee on Foreign Affairs on the bill relating to the Red Cross (H. R. 22311) and present the following on behalf of Messrs. Johnson & Johnson:

Johnson & Johnson, a New Jersey corporation, having its principal office at New Brunswick, N. J., has for about twenty-five years been engaged in the manufacture of surgical and pharmaceutical goods of many kinds. Its business is the largest of its kind in the country, and probably in the world. During that period it has continuously used as a trade-mark in connection with its goods the symbol of a red cross and its goods have been referred to, asked for, and identified by that symbol and the equivalent words, "red cross.' For example, purchasers throughout the United States desiring, say, a mustard plaster, or a package of cotton, embodying the particular excellence for which the house is well known, look for the red cross and ask for a "Red Cross mustard plaster," or a "package of Red Cross cotton." In creating the demand for the goods thus identified Johnson & Johnson have expended many hundreds of thousands of dollars and twenty-five years of the most conscientious industry. It is not going too far to say that the goodwill thus created is embodied chiefly in the Red Cross trade-mark and that to take that mark from them would be an injury more serious than the destruction of their plants.

The rights of Johnson & Johnson in the Red Cross trade-mark have been examined and protected in several courts (e. g., Johnson & Johnson v. Bauer & Black, 82 Fed., 662, 27 C. C. A., 374; Johnson & Johnson v. Brunor, 107 Fed., 466; Johnson & Johnson v. Rutan, 122 Fed., 993; Johnson & Johnson v. Seabury & Johnson, 61 Atl. Rep., 5, 67 Atl. Rep., 26).

The bill to amend the act incorporating the American National Red Cross in its present form might be construed so as to confiscate the trade-mark and goodwill of Johnson & Johnson. That bill makes any use of the red cross a crime, but provides that owners of trade-marks heretofore registered "shall not be deemed forbidden by this act to use such trade-mark in accordance with the terms thereof." This proviso is apparently intended to prevent the bill being unconstitutional, as

representing confiscation of valuable vested property rights without compensation. The proviso does not accomplish this purpose, because it overlooks the fact that property rights in trade-marks in this country depend solely upon use and not at all upon registration, which is merely a convenient form of prima facie evidence of rights arising from use under the common law. (Trade-Mark Cases, 100 U. S., 82.) As against a person who has acquired a property right by use (without registration), the bill would seem to be unconstitutional.

So far as Johnson & Johnson are concerned, their interests would be sufficiently protected by an amendment adding, at the end of line 22, on page 2, following the word "thereof," the words "for the class of goods mentioned therein," so that the clause will read: "Shall not be deemed forbidden by this act to use such trademarks in accordance with the terms thereof for the class of goods mentioned therein."

Johnson & Johnson have a half dozen or more registrations of the mark in the United States Patent Office, and any amendment which makes it plain that the bill permits the use on the "class of goods," as distinguished from the "particular description," would save them from practical injury. This is, however, a matter of importance to them, as may be indicated by an illustration: They make, for example, the many varieties of medicinal plasters set forth in the pharmacopoeia. The registration may mention medicinal plasters as "the class of goods" and indicate only, say, opium plaster as the "particular description of goods." It is of great importance that the class of goods should be recognized in a business which comprises the manufacture of hundreds of different articles.

Another amendment has been suggested by a manufacturer who has used the mark for 30 years or more in another industry and has no registration, having relied on his common-law property right. It also would prevent the bill being confiscatory and perhaps meet the views of those who advocate it. This amendment is as follows: Cancel the proviso-that is, all of lines 14 to 22, inclusive— and substitute in lieu thereof the following:

"Provided, however, That this act shall not be construed to interfere with or forbid the use of any trade-mark, word or words, or symbol, by any person, firm, or corporation which, or whose assignors, has used such trade-mark, word or words, or symbol, in his trade or business since before January fifth, nineteen hundred and five, and which shall on or before six months after the passage of this act file with the secretary of the American National Red Cross affidavit of such use.' In brief, any amendment which will alter the bill so that it cannot destroy their goodwill and property would be satisfactory to Johnson & Johnson. They respectfully protest against the passage of the bill in its present form as unnecessary, unjust, and unconstitutional.

Yours very truly,

ARCHIBALD COX.

Now, I think that letter, may it please the committee, sets forth briefly and clearly the views of Mr. Cox, counsel for the Johnson & Johnson Company. The bill, as stated by him, does make it unlawful after its passage to use the symbol of the red cross or the words "red cross" upon any goods, with this proviso:

That owners of trade-marks heretofore registered in the United States Patent Office in pursuance of the trade-mark laws of the United States; and owners of trade-marks for the registration of which applications were filed prior to January fifth, nineteen hundred and five, in the United States Patent Office, and for which registration, upon such applications has been or shall hereafter be made in pursuance of the laws of the United States, shall not be deemed forbidden by this act to use such trade-marks in accordance with the terms thereof.

You will observe that the bill as framed exempts from its provisions the owners of trade-marks who have, prior to January 5, 1905, obtained registration for those trade-marks in the Patent Office, and further exempts from the provisions

Mr. DENBY. Pardon me; it says "for which registration upon such applications has been or shall hereafter be made."

Mr. HENDERSON. The first provision is for those who have obtained registration prior to January 5, 1905, and then follows this

and for which registration upon such applications have been or shall hereafter be made in pursuance of the laws of the United States.

That is, applications filed prior to January 5, 1905.

Mr. DENBY. Yes.

Mr. HENDERSON. In other words, in order to be exempt from the provisions of this bill the owner of a trade-mark who has used the mark for twenty-five or thirty years in his business must have either obtained registration prior to January 5, 1905, or must have filed an application for registration prior to that date, which application is still pending in the Patent Office; and if registration has been or shall be issued upon that application filed prior to January 5, 1905, then the owner of that registered trade-mark is exempted from the provisions of this bill.

Mr. DENBY. Your contention is that any person ought to be exempted who had a legal right to use the trade-mark at any time prior to this amendment?

Mr. HENDERSON. This amendment, or prior to the prior act?

Mr. DENBY. The prior act? The prior act provides that any person may use it who had the legal right prior to that time.

Mr. HENDERSON. Yes.

Mr. DENBY. So that if you say any person who had the right prior to this act, it would not open the door to anybody prior to 1905, because they were barred by the old act?

Mr. HENDERSON. They were barred by the old act; and if this was framed so as to allow those who had the lawful use of the trade-mark prior to the passage of the former act to use it now, this bill would be constitutional and would not divest anyone of vested rights. The present bill seems to proceed upon the theory that the right to a trade-mark and property in a trade-mark is acquired only by registration in the Patent Office. The fact, and the law, is that a trademark right must be acquired by actual use before a party can go into the Patent Office and obtain registration. It is a common-law right. Mr. DENBY. Your contention, briefly, would be that nobody can be barred by this act who had the right to use the trade-mark prior to January 5, 1905?

Mr. HENDERSON. According to the terms of this act, those parties are exempted from its operation.

Mr. DENBY. Had the terms been different, it would not be constitutional?

Mr. HENDERSON. It would not be constitutional; consequently, the purposes of the act would simply fail, and I take it that the promoters of this, who are engaged in a most commendable philanthropic object, want to get something that will benefit them when they get it.

Mr. DENBY. Will you explain how the promoters would have any way of checking the use of the red cross in the finding out who was entitled to use the red cross symbol prior to January 5, 1905, except by some record? What is there, otherwise, to prevent them from coming in and seeking registration, and what check, in the absence of some record, would there be upon their proof of their right to registration?