Federal Trade Commission v. A. P. W. Paper Co.
Headline: Court limits FTC power and affirms that companies who used 'Red Cross' before 1905 may continue using the name and cross, while allowing required disclaimers to prevent public confusion.
Holding: The Court held that a company that lawfully used the words 'Red Cross' and the Greek red cross before 1905 cannot be absolutely barred by the FTC, though the FTC may require corrective language to stop public confusion.
- Pre-1905 commercial users may keep using 'Red Cross' name and symbol.
- FTC can require clear statements preventing any suggestion of Red Cross sponsorship.
- Full bans on such long-standing uses are blocked without proof of fraud.
Summary
Background
A manufacturer that sells toilet tissue and paper towels used the words “Red Cross” and the Greek red cross on its products before 1905. Congress passed laws in 1905 and 1910 protecting the American National Red Cross and generally banning private commercial use of the name and symbol, but the 1910 law explicitly allowed anyone who lawfully used them before 1905 to keep using them for the same goods. The Federal Trade Commission later found the company’s packaging misleading and ordered it to stop using the words and the symbol.
Reasoning
The main question was whether the FTC could completely ban a long-standing, good-faith commercial use that Congress had protected in 1910. The Court read the two laws together and concluded Congress intended to let pre-1905 lawful users continue their use. The Court therefore held the FTC could not absolutely forbid that protected use. At the same time, the Court said the FTC may require clear corrective language or other measures to remove any misleading impression that the goods are sponsored, approved, or connected with the American Red Cross.
Real world impact
Companies that lawfully used the name and emblem before 1905 can continue those uses; they are not automatically shut down by the FTC’s consumer-protection power. But the FTC retains authority to order labels or statements that prevent consumers from thinking the Red Cross sponsors or endorses the products. The Court left the exact remedy to the FTC to design in light of these limits.
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