Saturday, August 11, 2007

J&J vs. ARC

My sister sent me an email about this lawsuit, and I had to investigate it.

I'm still stunned.

Basically, Johnson & Johnson is suing the American Red Cross over the use of the red cross symbol, which has been used by both organizations for over 100 years.

I know enough about intellectual property law to know that J&J doesn't have much of a chance of winning this lawsuit. If they're lucky, it will simply be dismissed before they both spend many millions of dollars on legal fees. If it goes to trial, there's a decent possibility that J&J could lose their rights to the trademark altogether. And even if they win the lawsuit, they'll probably lose much more in the court of public opinion.

Last week, J&J announced major layoffs, and now they've decided to attack a federally chartered charity. Taken together, these seem like bad PR moves for a company whose marketing campaigns proclaim it to be a bastion of ethics and family values.

I had thought about putting in my 2 cents worth on the layoffs last week, but then I decided it wasn't worth it. But in light of this new development, I'm going to go ahead and give vent to I wanted to say, which isn't about J&J specifically, so much as it is about the stock market in general:

I will never understand why Wall Street rewards companies for laying people off. It just doesn't make sense to me that a company should say, "Due to mismanagement and bad planning, we're failing to achieve our financial goals. So we've decided that the easiest way to still make our numbers is to eliminate employees." (They never decide that maybe the officers and upper management need to take pay cuts or something crazy like that.) And investors say, "Oh, that sounds like a great plan! I'm sure the company will be much stronger after it shoves a bunch of employees out the door (along with all of their knowledge and experience) and decimates the morale of the remaining employees."

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