Prior to 1905, respondent used "Red Cross" as a trade name and
displayed the Red Cross symbol on its products. Section 4 of the
American Red Cross Act of January 5, 1905, forbade
"any person or corporation, other than the Red Cross of America,
not now lawfully entitled to use the sign of the Red Cross,
hereafter to use such sign . . . for the purposes of trade or as an
advertisement to induce the sale of any article whatsoever."
That section was amended in 1910 so as to forbid the use of the
symbol or the words "Red Cross" for the purpose of trade or as an
advertisement "to induce the sale of any article" or "for any
business or charitable purpose" by any person other than the
American National Red Cross or the sanitary and hospital
authorities of the army and navy, except that "no person,
corporation, or association that actually
Page 328 U. S. 194
used . . . the said emblem . . . or words for any lawful purpose
prior to" January 5, 1905 "shall be deemed forbidden by this Act to
continue the use thereof . . ." The Geneva Convention of 1929,
ratified by the United States in 1932, bound the contracting
Governments to take or recommend to their legislatures such
measures as might be necessary "to prevent the use by private
persons . . . of the emblem or the name of the Red Cross" from the
time set in the legislation and not later than five years after the
effective date of the convention. Congress enacted no legislation
to effectuate this undertaking. In 1942, the Federal Trade
Commission charged petitioner with a violation of § 5(a) of the
Federal Trade Commission Act, as amended by the Act of March 21,
1938, which makes unlawful "unfair methods of competition in
commerce, and unfair or deceptive acts or practices in commerce."
After appropriate administrative proceedings, the Commission found
that respondent's use of the words and symbol were misleading to
the purchasing public, and ordered respondent to cease and desist
from using the words "Red Cross" to describe its products and from
displaying the symbol on them.
Held:
1. Under the facts of this case, the Commission may not
absolutely forbid the use of the words and symbol by respondent.
Pp.
328 U. S. 198,
328 U. S. 200,
328 U. S. 204.
(a) The 1910 Act granted, or at least recognized, the right of
pre-1905 users to continue their use. P.
328 U. S.
200.
(b) This specific right was not intended to be swept away by the
1938 amendment to the Federal Trade Commission Act. P.
328 U. S.
202.
(c) Since Congress has taken no action to effectuate the
undertaking in the Geneva Convention of 1929 to prevent their use
by private persons, it does not impair the rights of good faith
pre-1905 users granted or recognized by the 1910 Act. P.
328 U. S.
203.
2. Reading the 1910 and 1938 Acts
in pari materia, the
good faith use of the words and symbols by pre-1905 users is
permissible; but the Commission may require the addition of
language which removes any misleading inference that the products
are in fact sponsored, approved, or in any manner associated with
the American National Red Cross. P.
328 U. S.
202.
3. The fashioning of the order which should be entered is
entrusted to the Commission, which has wide latitude for judgment.
P.
328 U. S.
203.
149 F.2d 424 affirmed.
Page 328 U. S. 195
The Federal Trade Commission ordered respondent to cease and
desist from using the words "Red Cross" to describe its products
and from displaying the Greek red cross on them. 38 F.T.C. 1. On
petition for review, the Circuit Court of Appeals reversed the
Commission's order and remanded the case to the Commission for the
formulation of a new order which, though not forbidding the use of
the words and symbol, might require statements which would avoid
any inference that the goods were sponsored or approved or in any
way connected with the American National Red Cross. 149 F.2d 424.
This Court granted certiorari. 326 U.S. 704.
Affirmed, p.
328 U. S. 204.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
Respondent manufactures and sells toilet tissues and paper
towels in interstate commerce. On each package or roll of one brand
are a Greek red cross and the words "Red Cross." Respondent
registered the words "Red Cross" and the Red Cross symbol as a
trademark, and it features them in its advertisements and on its
letterheads.
By § 4 of the American Red Cross Act of January 5, 1905, 33
Stat. 600, 36 U.S.C. § 4, it was made unlawful
"for any person or corporation, other than the Red Cross
Page 328 U. S. 196
of America, not now lawfully entitled to use the sign of the Red
Cross, hereafter to use such sign or any insignia colored in
imitation thereof for the purposes of trade or as an advertisement
to induce the sale of any article whatsoever."
That section was amended by the Act of June 23, 1910, 36 Stat.
604, 36 U.S.C. § 4. Sec. 4 of that Act made unlawful the use of the
Greek red cross on a white ground or the words "Red Cross" for the
purpose of trade or as an advertisement "to induce the sale of any
article" or "for any business or charitable purpose" by any person
other than the American National Red Cross [
Footnote 1] or its duly authorized employees and agents
or the sanitary and hospital authorities of the army and navy. It
contained, however, a proviso which reads as follows:
"That no person, corporation, or association that actually used
or whose assignor actually used the said emblem, sign, insignia, or
words for any lawful purpose prior to January fifth, nineteen
hundred and five, shall be deemed forbidden by this Act to continue
the use thereof for the same purpose and for the same class of
goods."
Petitioner's use of the trade name and emblem antedate January
5, 1905. [
Footnote 2] But, in
1942, the Federal Trade Commission
Page 328 U. S. 197
charged petitioner with a violation of § 5(a) of the Federal
Trade Commission Act, 38 Stat. 719, as amended 52 Stat. 111, 15
U.S.C. § 45, which makes unlawful "unfair methods of competition in
commerce, and unfair or deceptive acts or practices in
commerce."
A hearing was had, findings were made, and a cease and desist
order was issued. The Commission found that
"the use by respondent of the words 'Red Cross' and of the mark
of the Greek red cross to designate its products had the tendency
and capacity to mislead and deceive a substantial portion of the
purchasing public, in that such name and mark represent or imply
that respondent's products are sponsored, endorsed, or approved by
the Red Cross; that the Red Cross is financially interested in the
sale of the products; that the products are used by the Red Cross;
that the products are manufactured in accordance with sanitary
standards set up by the Red Cross; or that there is some other
connection between the products and the Red Cross. Not only are
these, in the opinion of the Commission, reasonable inferences to
be drawn from the use of the name and mark, but the record
affirmatively shows that the name and mark are in fact so
understood and interpreted by many members of the public."
The Commission also found that statements on respondent's
products that they are made by respondent and that the name and
mark are registered "do not serve to correct the erroneous and
misleading impression created through the use of the trade name and
mark." The Commission entered an order which, among other things,
forbade respondent from using the words "Red Cross" to
Page 328 U. S. 198
describe its products and from displaying the Greek red cross on
them. [
Footnote 3] 38 F.T.C.
1.
On a petition for review, the Circuit Court of Appeals, by a
divided vote, reversed the order of the Commission. 149 F.2d 424.
It held that the order went beyond permissible limits in forbidding
any use of the words and the mark. It remanded the case to the
Commission for the formulation of a new order which, though not
forbidding the use of the words and the symbol, might require
statements which would avoid any inference that the goods were
sponsored or approved or in any way connected with the American
National Red Cross. The case is here on petition for a writ of
certiorari which we granted because of the importance of the
problem in the administration of the Federal Trade Commission
Act.
There is no suggestion that the pre-1905 use of the words and
the symbol was an unlawful one within the meaning of either the
1905 or the 1910 Act. Nor has the Commission found that respondent
has engaged in any fraudulent activity or made any untruthful
statements in connection with its use of the words and the symbol.
Therefore, this is not a case where the words and symbols
Page 328 U. S. 199
were either adopted or used pursuant to a fraudulent design,
aimed at creating the impression that these products were sponsored
by or otherwise carried the imprimatur of the Red Cross. Hence,
here, as in
Siegel Co. v. Federal Trade Commission,
327 U. S. 608, we
have no problem involving the power of the Commission to uproot a
fraudulent scheme in its entirety. But it is argued that, however
lawful the earlier use may have been, it cannot survive a finding
by the Commission that the use constitutes an unfair or deceptive
act or practice in commerce. It is pointed out that the 1938
amendment to the Federal Trade Commission Act gave the Commission
power to protect consumers, as well as competitors, against unfair
or deceptive practices. [
Footnote
4] It is said that there are no exceptions to that broad power,
and none should be implied from the Red Cross Act of 1910. The
latter Act, it is said, confers no general rights, but only a
limited immunity, and should not be construed as exempting pre-1905
users of the name and emblem from regulatory legislation of general
application which Congress may from time to time enact for the
protection of the public. It is also argued that, by the Geneva
Convention of 1929, which was ratified
Page 328 U. S. 200
by the United States [
Footnote
5] in 1932, the United States agreed to prohibit the use by
private persons of the name and the symbol, and that the Red Cross
Act and the Federal Trade Commission Act should not be construed in
favor of conduct which this nation is under international
obligation to terminate.
We agree, however, with the Circuit Court of Appeals. It is
clear that the 1910 Act granted, or at least recognized, the right
of pre-1905 users to continue the use of the words and the symbol.
[
Footnote 6] The House Report
stated that the Act, as amended,
"will permit the use of the symbol . . . by such persons,
corporations, and associations as actually used the emblem prior to
January 5, 1905, for the purposes
Page 328 U. S. 201
for which they were so entitled to use it and for the same class
of goods. The section, as so amended, grants to the American
National Red Cross the fullest protection it is possible to afford
it by congressional enactment, and, at the same time, amply
protects the concerns possessing vested property rights in the
emblem."
H.Rep. No.1256, 61st Cong., 2d Sess., pp. 2-3. It is apparent
from the terms of the 1905 Act and the 1910 Act [
Footnote 7] that Congress was concerned not
only with protecting the Red Cross against pretenders, but also
with protecting the public against the false impression that goods
purchased were the products of the Red Cross or were sponsored by
it. Congress, however, did not go the full distance. It preserved
the right of earlier, good faith users to continue the use of the
words and the symbol. It may have concluded that the mark which had
been acquired was a valuable business asset
Page 328 U. S. 202
which should not be destroyed. Or it may have thought that the
extent and manner of the use by the established concerns were not
likely to injure the public. [
Footnote 8] But, whatever the purpose, the fact remains
that the good faith use of the mark by the pre-1905 users was
intended to be preserved unimpaired.
We cannot lightly infer that this specific right was intended to
be swept away under the 1938 amendment to the Federal Trade
Commission Act. Repeals by implication are not favored. Yet, if the
order of the Commission stands, the right granted or recognized by
the 1910 Act becomes a nullity. For the use of the words and the
symbol by good faith pre-1905 users becomes
per se
unlawful. As the 1910 Act, like the Federal Trade Commission Act,
was in part directed towards protection of the public against
deceptive practices, we think the two Acts must be read
in pari
materia. The problem is to reconcile the two, if possible, and
to give effect to each. We think that may be done by recognizing
that, while the good faith use of the words and symbols by pre-1905
users is permissible, the Commission may require the addition of
language which removes any misleading inference that the
Page 328 U. S. 203
products are in fact sponsored, approved, or in any manner
associated with the American National Red Cross.
We need comment only briefly on the Geneva Convention of 1929,
which was ratified by the United States in 1932. [
Footnote 9] The undertaking "to prevent the
use by private persons" of the words or symbol is a matter for the
executive and legislative departments. The problem has been before
the Congress in recent years. [
Footnote 10] No action has yet been taken. But we can
find in that inaction no basis for concluding that the rights of
good faith, pre-1905 users granted or recognized by the 1910 Act
are today in any way impaired. Indeed, the existence of that right
was recognized as giving rise to the need for additional
legislation. [
Footnote 11]
That assumption can hardly be reconciled with the conclusion that
complete relief is already accorded under the Federal Trade
Commission Act.
We do not undertake to prescribe the order which the Commission
should enter. The fashioning of the remedy
Page 328 U. S. 204
is a matter entrusted to the Commission, which has wide latitude
for judgment.
Siegel Co. v. Trade Commission, supra. We
only hold that, under the facts of this case, the Commission may
not absolutely forbid the use of the words and the symbol by
respondent.
Affirmed.
MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
[
Footnote 1]
The Red Cross organization had its origin in a treaty drafted at
the Geneva Convention in 1864 and acceded to by the United States
in 1882. 22 Stat. 940. The American Association of the Red Cross
was incorporated in 1881 under the laws of the District of
Columbia. It was reincorporated in 1893 under the laws of the
District of Columbia as the American National Red Cross. On June 6,
1900, it was incorporated under the same name by Act of Congress,
31 Stat. 277, and was reincorporated January 5, 1905. 33 Stat. 599.
From the time of its first incorporation in 1881 down to the
present, it has used the words "Red Cross" as a part of its name,
and has also used the emblem adopted by the 1864 Geneva Convention,
the Greek red cross on a white ground.
[
Footnote 2]
Toilet tissues were marketed by petitioner under that trade name
and emblem since 1897, and paper towels since 1933. The trademark
was first registered in the Patent Office in 1911, and was extended
to cover paper towels in 1934.
The Commission made no finding as to whether the paper towels
were of the same class of goods as the toilet tissue within the
meaning of the proviso to § 4 of the 1910 Act.
[
Footnote 3]
It ordered respondent to cease and desist from
"1. Using the words 'Red Cross' or any abbreviation or
simulation thereof, either alone or in combination or connection
with any other word or words, to designate, describe, or refer to
respondent's products."
"2. Using or displaying on respondent's products or in any
advertisement of such products the mark of the Greek red cross, or
any other mark, emblem, sign, or insignia simulating or resembling
such cross."
"3. Representing in any manner or by any means, directly or by
implication, that respondent's products are sponsored, endorsed, or
approved by the Red Cross; that the Red Cross is financially
interested in the sale of said products; that said products are
used by the Red Cross; that said products are manufactured in
accordance with sanitary standards set up by the Red Cross; or that
there is any other connection between said products and the Red
Cross."
[
Footnote 4]
In
Federal Trade Commission v. Raladam Co.,
283 U. S. 643,
283 U. S.
647-648, the Court had ruled that,
"The paramount aim of the act is the protection of the public
from the evils likely to result from the destruction of competition
or the restriction of it in a substantial degree, and this
presupposes the existence of some substantial competition to be
affected, since the public is not concerned in the maintenance of
competition which itself is without real substance."
The 1938 amendment to § 5 of the Federal Trade Commission Act
was designed to make
"the consumer, who may be injured by an unfair trade practice,
of equal concern, before the law, with the merchant or manufacturer
injured by the unfair methods of a dishonest competitor."
H.Rep. No.1613, 75th Cong., 1st Sess., p. 3. And see S.Rep.
No.221, 75th Cong., 1st Sess., p. 3.
[
Footnote 5]
47 Stat. 2074. Article 28 provides in part, 47 Stat. 2092:
"The Governments of the High Contracting Parties whose
legislation may not now be adequate shall take or shall recommend
to their legislatures such measures as may be necessary at all
times:"
"
a) to prevent the use by private persons or by
societies other than those upon which this Convention confers the
right thereto, of the emblem or of the name of the Red Cross or
Geneva Cross, as well as any other sign or designation constituting
an imitation thereof, whether for commercial or other
purposes;"
"
* * * *"
"The prohibition mentioned in subparagraph (a) of the use of
signs or designations constituting an imitation of the emblem or
designation of the
Red Cross or Geneva Cross, . . . shall
take effect from the time set in each act of legislation and at the
latest five years after this Convention goes into effect. After
such going into effect, it shall be unlawful to take out a
trademark or commercial label contrary to such prohibitions."
[
Footnote 6]
The manager of the bill which became the 1905 Act stated on the
floor of the House during the debate that it would not "interfere
with any lawful right now existing." 39 Cong.Rec. 406.
Judge Learned Hand, speaking of the 1910 Act in
Loonen v.
Deitsch, 189 F. 487, 492, stated:
"Whatever may have been the policy before, Congress has now
definitely declared in the proviso of the latter act that it would
permit such marks if they antedated 1905. Congress had power so to
legalize the use of it; the question of public policy was for it
and for it alone, and it is now finally closed."
[
Footnote 7]
As we have already noted, the 1905 Act made it unlawful
"for any person or corporation, other than the Red Cross of
America, not now lawfully entitled to use the sign of the Red
Cross, hereafter to use such sign or any insignia colored in
imitation thereof for the purposes of trade or as an advertisement
to induce the sale of any article whatsoever."
And § 4 of the 1910 Act, which we have already summarized,
provided:
"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 for the purpose of trade
or as an advertisement to induce the sale of any article whatsoever
or for any business or charitable purpose 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:
Provided, however, That no person, corporation, or
association that actually used or whose assignor actually used the
said emblem, sign, insignia, or words for any lawful purpose prior
to January fifth, nineteen hundred and five, shall be deemed
forbidden by this Act to continue the use thereof for the same
purpose and for the same class of goods."
[
Footnote 8]
Judge Learned Hand, in
Loonen v. Deitsch, supra, note
6, p. 489, stated:
"Does the mark actually mean that the society is in any way
concerned with the manufacture of the goods? I think not. We have
become familiar with it in the past for many other uses than that
of the society, though happily such uses will now slowly disappear.
It has been used on hospital ambulances, upon medicaments, upon
doctors' motor cars, upon barber shops, upon laundries, and for
military field service not connected with the Red Cross Society. In
short, until the legislation of 1905 (Act Jan. 5, 1905, c. 23, 33
Stat. 599 [U.S.Comp.St.Supp. 1909, p. 1038]), it had been quite
instinctively adopted for many uses which were congruous with the
chief objects of the society, but which did not indicate that the
society had anything to do with them, or certainly with the
frequency of the use ceased to do so. Finally, Congress has clearly
recognized that fact by permitting all those who, prior to 1905,
had used the mark lawfully to continue."
[
Footnote 9]
See note 5
supra.
[
Footnote 10]
In the 77th Congress, a bill to eliminate over a period of years
the exemption given to pre-1905 users was favorably reported by the
Committee on Foreign Affairs of the House. H.Rep.2387, 77th Cong.,
2d Sess. This proposed legislation was designed to discharge the
obligation of the United States under the Geneva Convention of
1929.
Id. pp. 1, 2, 4.
In the 78th Congress, a bill passed the Senate with similar
provisions. 90 Cong.Rec. 398, 401, 3656. It was reported favorably,
with amendments, by the Committee on Foreign Affairs of the House.
H.Rep. No.2054, 78th Cong., 2d Sess. This proposed legislation was
likewise designed to discharge the obligation of the United States
under the Geneva Convention of 1929.
Id., pp. 4-6.
And
see 90 Cong.Rec. 399.
[
Footnote 11]
See H.Rep. No.2387,
supra, note 10 pp. 2, 3; H.Rep. No.2054,
supra, note 10 pp.
4-6. In the latter Report, it was, indeed, recognized "that, under
existing law, there are legal uses of the symbol by commercial
users." P. 4.