An Ethical Insight

that the Red Cross symbol is trademarked to Johnson & Johnson pharmaceutical products and the American Red Cross cannot use it on their profit-based products line. The reason for this civil action suit is unethical as the American Red Cross and Johnson & Johnson could have prevented it from reaching court. The American Red Cross should have also protected its emblem in the a hundred years of use by Johnson & Johnson. One of the two organizations is guilty of fraud as they each legally claim the emblem. The same goes for the case of copyright infringement as both parties claims the other of doing so. Both parties also lack proper decision-making framework that is efficient, as the issue has escalated to a public civil action suit. It is hard to ethically assign ranks of importance both of the organizations, as they are both fundamentally different. It is also highly unethical for Johnson & Johnson to challenge the International Humanitarian Law all these years and now, attempt to legally violate it. It was also unethical for the American Red Cross to not defend the International Humanitarian Law beforehand, as it is the very constitution on which it is formed. In view of this issue, the following steps are recommended: the American Red Cross should take more initiative to protect and uphold the International Humanitarian Law; Johnson & Johnson should research on a new symbol to represent its pharmaceutical products; The Congress of America and the American Legal system should review any contradicting, overlapping or unresolved issue in the copyright division and take the necessary course of action; and The consumers of the United States of America whom are also American Red Cross members should take a legal stand in favor of the organization that they perceive correct in this issue to force an “out of court” resolution

THENIVAALAVEN VIMAL (2007010041)

J O H N S O N & J O H N S O N VS. A M E R I C A N R E D C R O S S

by Johnson & Johnson against the American Red Cross. The civil action states

An Ethical Insight

This report focuses on the ethical components of the recent civil action suit filed

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Johnson & Johnson vs. American Red Cross: An Ethical Insight N UMBER

HEADING

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1.0

INTRODUCTION

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2.0

DISCUSSION OF ETHICAL ISSUES

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2.1 THE CAUSE OF THE CIVIL SUIT

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2.2 FRAUD

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2.3 DECISION MAKING FRAMEWORK

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2.4 COPYRIGHT VIOLATION

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2.5 THE ISSUE OF PLACING THE IMPORTANCE:

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NOBILITY OR NUMEROUS PROFIT-BASED STAKEHOLDER CONCERNS? 2.6 THE BREACH OF THE INTERNATIONAL

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HUMANITARIAN LAW 3.0

CONCLUSION

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4.0

RECOMMENDATIONS

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Johnson & Johnson vs. American Red Cross: An Ethical Insight 1.0 INTRODUCTION This report delves into the ethical issues regarding to the recent Johnson & Johnson Civil Complaint against American Red Cross and Commercial Licensees. This takes into account the International Humanitarian Law provisions, the Congress of America’s decision in the past, the objectives of a profit-based company in such an action, and such is the ethical analysis. Johnson & Johnson is a well-known pharmaceutical company in the United States of America that has become a household name. Due to their success in the United States, the company has developed into an international brand, however, its headquarters and base of operations remains in New Jersey, United States of America. Their range of products includes medicines, clinical as well as surgical equipment, etc. (Johnson, 2007) The American Red Cross is a branch of the International Federation of Red Cross, Red Crescent and Red Crystal formed in the United States of America by Clara Barton (Cross, 2007). The American Red Cross is formed in accordance to the 12 objectives outlined (refer to Appendix 3) in the International Humanitarian Law. Recently, the American Red Cross started to introduce health products using the Red Cross symbol. The use of this symbol sparked outcry by Johnson & Johnson as the company had been using the same symbol as their registered trademark. However, as the name suggests, the American Red Cross defends its use. The Johnson & Johnson civil suit states that this legal action was taken on basis of numerous failed cooperation, mediation and discussion. Currently, both the parties have issued public statements (Appendixes 1 and 2) and have taken follow-up legal action. Thus, the case currently is in pending for its legal proceedings in court. This report examines on what were the professional and business ethics aspects in this scenario in terms of what caused this dispute, how it could have been prevented and how it could have been handled. The recognizable ethical issues in this case are copyright violation, misuse of given rights, the

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Johnson & Johnson vs. American Red Cross: An Ethical Insight more “noble and justifiable cause”, breach of predominant international laws and the breach of trust. This report relies on the official statements issued by the relevant parties, the author’s knowledge in business and professional ethics and the author’s certified knowledge in the International Humanitarian Law. This report also uses the American Psychological Association’s reference system readily installed in Microsoft Office 2007.

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Johnson & Johnson vs. American Red Cross: An Ethical Insight 2.0 DISCUSSION OF ETHICAL ISSUES 2.1 The Cause of the Civil Suit The cause of this civil suit is the need to preserve both the organization’s trademarks, but the continual egoistic use of the Red Cross symbol by both the organization resulted in a legal suit. If Johnson & Johnson were particular of keeping the commercial use of the Red Cross emblem, Johnson & Johnson should have applied for a proper legal right through the Congress to do so. The American Red Cross should have also had made a strong stand to say that the American Red Cross has all the rights to retract their indigenous emblem away form Johnson & Johnson (as the symbol is preserved so in the International Humanitarian Law) (Malaysia, NA)

2.2 Fraud Both the public statements claim that each respective party has a legal stand whereby they had used the Red Cross symbol longer with Congress’s permission. As both of the party cannot be right, one of the organizations is guilty of attempting fraud by issuing fake statements and legal provisions that in turn causes and illicit advantage in the legal proceedings. This definite ethical and legal breach is unacceptable in terms of lying and undermining the legal system.

2.3 Decision Making Framework The Johnson & Johnson public statement states that attempts to discuss, mediate and cooperation were offered to American Red Cross, but it was to no avail. Logically, both organizations should have kept their main objectives in view to make a decision. The business centered Johnson & Johnson organization should have opted an out of court decision as a public civil suit costs more, could possibly cause irreversible damage on the organization’s reputation (economic step of social responsibility). The humanitarian-cause

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Johnson & Johnson vs. American Red Cross: An Ethical Insight (philanthropic) lead American Red Cross should have prevented any possible complications such as this issue, legal proceedings as they cause unwanted trouble to the American Red Cross’s work. Improper or poor decision making protocol and framework escalated this issue that could have been solved in the boardroom not in the courtroom. A good corporate decision making framework on behalf of both the organizations could have spurred the push towards a decision that could have benefitted both.

2.4 Copyright Violation The American Red Cross has gazette the Red Cross, Red Crescent and Red Crystal at the international field, and the United States of America has signed the Geneva Conventions and Additional Protocols that support this (Malaysia, NA) (referable to Appendix 3). Johnson & Johnson is said to have “grandfathered rights from the Congress” to use the emblem (Johnson, 2007) (referable to Appendixes 1 and 2). It is can be concluded that only one organization has legitimate claim and copyrights to use the emblem in question. The other party is guilty of infringing the given limit of the copyrights that was allocated to them. In the case of Johnson & Johnson, if they are found guilty, then they have infringed the copyright far beyond the given rights, and their attempts to null-void the usage of the symbol by Red Cross shows continued unethical attempt to infringe the copyright further. In the case whereby the American Red Cross is found guilty, they infringed their copyright when they attempted to use the symbol for financial gains, beyond that of which the allocation given by the Congressional charter (this outcome is based on the assumption that Johnson & Johnson’s claim is valid.)

2.5 The Issue of Placing the Importance: Nobility or Numerous Profit-Based Stakeholder Concerns? To determine the “winner” of this civil rights suit, the legal system will have to consider which one of the organization deserves the “greater importance”, in other words, which organization’s objective deserves the higher priority?

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Johnson & Johnson vs. American Red Cross: An Ethical Insight Johnson & Johnson is an international company that has numerous stakeholder and shareholders that deserve to win this claim since a loss in this lawsuit can spell an expensive compensation that will affect a large portion of the organization, not to mention the costs to recall and rebrand their whole production lines in the United States (at press time, Johnson & Johnson products available here in Malaysia do not support the Red Cross symbol (15 March 2008)). The American Red Cross is a humanitarian based organization that serves to help American prepare, prevent and respond to disasters and emergencies (Cross, 2007) (referable to Appendix 2) at a non-profit level, in other words, the efforts made to help humanity in the United States of American without regarding to profit, however, they must avoid bankruptcy (Malaysia, NA). Thus, the dilemma is as follows: which is the greater cause (teleological) – financial benefit for possibly millions of people (financial utilitarianism) or the humanitarian benefit for all of America (humanitarian utilitarianism). 2.6 The breach of the International Humanitarian Law The International Humanitarian Law is the basis, strength and pride of the International Federation of Red Cross, Red Crescent and Red Cross, along with the International Committee of Red Cross, a component of it is Article 38 of Geneva Convention that recognizes the Red Cross and Red Crescent symbol belonging to the organizations’ humanitarian cause (the Red Crystal emblem was recognized in the third Additional Protocol in December of 2006) (Malaysia, NA). The United States of America is a country heavily involved in war and its military industry is a key industry (based on numerous documentations seen in Discovery channel from the year 2005 to present). The International Humanitarian Law is recognized there. In relation to the current cause, it is illegal for Johnson & Johnson to attempt to use to symbol, as the public statement (Appendix 1) clearly states that Johnson & Johnson has been using the symbol for a hundred years (since 1887), but the International Humanitarian Law has been in function for 145 years (1863), considering that the United States of America signed the first Geneva Convention. Negligence on the American Red Cross’s part also puts the organization in the guilty seat as it neglected upholding the International Humanitarian Law when the idea of Johnson & Johnson first adopting it was conceived. This is a serious issue in the

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Johnson & Johnson vs. American Red Cross: An Ethical Insight International Federation of Red Cross, Red Crescent and Red Crystal as most of the regional organizations neglect the protection of their respective emblems form abuse and misuse, and ethically, the American Red Cross should have stopped such actions from the very beginning (perfect examples would be the American Red Cross and Malaysia Red Crescent). This unethical act of knowingly violating the International Law, legal allocation by the Congress to do so and the recent dispute of the issue long after the misdeed has been done are unacceptable in the international level.

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Johnson & Johnson vs. American Red Cross: An Ethical Insight 3.0 Conclusion This civil suit is fraught with corporate and humanitarian objectives, and it is a matter to be declared legally right or wrong in Civil Court of Justice. However, this issue has several unethical acts that are outlined above by the author according to the author’s present knowledge in the field of Business and Professional Ethics. This civil suit could have been avoided by using proper early-level intervention, proper organizational decision-making framework, effective negotiations and ethical as well as legal values. The American Red Cross (as the United States of America’s representative of the International Federation of Red Cross, Red Crescent and Red Crystal) has been unethically lenient in allowing the use of its conserved and protected symbol by a profit-based organization without contesting it in approximately a hundred years ago. It has also been unethically negligent of its legal status on using the Red Cross symbol for profit gain (assuming the Johnson & Johnson claim s true) and its need to reinstate the Red Cross symbol as the sole property of the American Red Cross (Malaysia, NA). It is also guilty of causing failure to the attempts of discussion, mediation and cooperation, according to Johnson & Johnson public statement. Johnson & Johnson is ethically wrong to attempt to claim the Red Cross emblem as it is undisputable that it belongs to the International Committee of Red Cross, Red Crescent and Red Crystal considering that the United States of America and all of the other country Johnson & Johnson operate in has signed the International Humanitarian Law (Cross, 2007). It is also guilty of delaying the clearing the legal rights and limits of that right for using the Red Cross emblem for almost a hundred years through obvious neglect and procrastination. The organization is also ethically wrong to take the issue to court as this issue could have been avoided “outside of court” that is, without the need to filing a civil suit, as in case of a loss, the enormity of the negative outcome in the civil court is too great and could possible by costly to Johnson & Johnson’s stakeholders. One of the two organizations is guilty of copyright fraud and lying to the public and falsifying legal matters. This issue can only be solved when the civil court ends its investigation (at press time, it is unclear on whether or not a court

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Johnson & Johnson vs. American Red Cross: An Ethical Insight proceeding has occurred regarding this issue yet). It is still unknown why two organizations that have two different ultimate objectives would and missions would want to publicize an issue that is seemingly trivial. And it is a clearly difficult to differentiate which of the organizations deserve the higher ranking of importance as they are formed on two different concepts and belonging to two different categories that can appeal all parts of the masses.

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Johnson & Johnson vs. American Red Cross: An Ethical Insight 4.0 Recommendations 1. The American Red Cross should take more initiative to protect and uphold the International Humanitarian Law in the mostly civic-minded society in the United States of America. 2. Johnson & Johnson should research on a new symbol to represent its pharmaceutical products as preparatory to one of the possible outcomes of the civil suit. 3. The Congress of America and the American Legal system should review any contradicting, overlapping or unresolved issue in the copyright division and take the necessary course of action to prevent any unwanted and wasteful complications in the future. 4. The consumers of the United States of America whom are also American Red Cross members should take a legal stand in favor of the organization that they perceive correct in this issue to force an “out of court” resolution as their combined voice as one of the primary stakeholders of both organizations can influence the next course of action for this civil suit.

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Johnson & Johnson vs. American Red Cross: An Ethical Insight BIBLIOGRAPHY Cross, A. R. (2007, 09 02). American Red Cross Home Page. Retrieved 03 15, 2008, from American Red Cross Website: www.redcross.org/home Johnson, J. &. (2007, 08 09). Johnson & Johnson News. Retrieved 03 15, 2008, from Johnson & Johnson Web Site: http://www.jnj.com/news/20070809_081717html Malaysia, P. B. (NA). Pendidikan Dalam Palang Meah dan Bulan Sabit Merah. (NA, Penterjemah) NA, NA, Malaysia: Institut Bulan Sabit Merah Malaysia.

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Johnson & Johnson vs. American Red Cross: An Ethical Insight Appendix Appendix 1: the Johnson & Johnson public statement, adapted from Johnson & Johnson web page at the following URL: http://www.jnj.com/news/jnj_news/20070809.htm?pageTemplate=preinter_friend ly.jsp&contentPage=/news/news_content.jsp

Appendix 2: the American Red Cross public statement, adapted from the following URL: www.redcross.org (the actual URL was unavailable at press time: March 15 2008) Appendix 3: Pendidikan Dalam Palang Merah dan Bulan Sabit Merah; a manual provided only to those whom are certified to have attended and passed the Red Cross and Red Crescent Internal Studies and International Humanitarian Law course. Warning: this manual is a closed journal that is used for private use alone. Those whom are not Malaysia Red Crescent members as it is gazette under this course are not allowed read it. The use of this manual as an appendix is approved strictly on two conditions: it has to be removed from the appendix list after its review and it is not to be reproduced wholly or partly in any means. Appendix 4: the author’s certificate that acknowledges the author’s legitimate status to use the International Humanitarian Law in aspects the author sees fit.

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