FTC Announces Intent to Issue Compulsory Process Orders Regarding Marketing of Food and Beverages
By Guest Blogger Tyler Anderson
This post also appears on The Food Liability Law Blog
In a May 25, 2010, Federal Register Notice, the Federal Trade Commission (the “FTC”) announced its intention to issue compulsory process orders to 48 food and beverage manufacturers, distributors, marketers, and quick service restaurant companies. The proposed orders seek information concerning the companies’ marketing expenditures targeted toward children and adolescents, and nutritional information about the companies’ food and beverage products marketed to children and adolescents.
The proposed orders, issued under Section 6(b) of the Federal Trade Commission Act, 15 U.S.C. § 46(b), will seek information in six categories, including:
• The categories of foods marketed to children (ages 2-11 years) and adolescents (ages 12-17 years);
• The types of measured and unmeasured media techniques used to market food products
to children and adolescents;
• The amount spent to communicate marketing messages about food products to children and adolescents;
• The nature of the marketing activities used to market food products to children and adolescents;
• Marketing to children and adolescents of a specific gender, race, ethnicity, or income level; and
• Marketing policies, initiatives, or research in effect or undertaken relating to the marketing of food and beverage products to children and adolescents.
By procuring this information, the FTC will be able to evaluate the impact of self-regulatory efforts on the nutritional profiles of foods marketed to children and adolescents. In addition, the FTC seeks to determine and analyze how companies allocate their promotional activities and expenditures among various media and for different food products. Interested parties may submit comments on or before June 24, 2010.
This FTC action is a follow-up to its July 2008 report entitled, Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation. That report represented the findings of a 2006 FTC study of promotional activities related to food and food products targeted toward children and adolescents. It found that, while room for improvement existed, the food and beverage industries had made significant progress on this front since the FTC and the Department of Health and Human Services co-sponsored a Workshop on Marketing, Self-Regulation & Childhood Obesity in 2005. As everyone from the First Lady to the World Health Organization is focused on the impact of marketing on childhood obesity, the results of this FTC action will bear monitoring.
News from Washington, D.C.
This was a relatively busy week in D.C. for dietary supplement legislation. First, a bill was introduced that would enable the FDA to better enforce the DSHEA, and second, a special Senate committee held a hearing on dietary supplement safety. Read more about each after the jump:
Continue Reading...Five Tips for "Green" Advertising
Yesterday, Stoel Rives' Salt Lake City office hosted a seminar on Advertising Law with Catherine Lake, Josh Gigger, and myself presenting. As part of the seminar, I offered some tips on avoiding legal problems when advertising the environmental friendliness of your goods or services. Here is a summary of those tips:
New Legislation Seeks to Soften FDA Regulation of Nutritional Supplements
One major complaint of companies marketing nutritional supplements is that the FDA severely limits their use of scientific findings in promoting the health benefits of their products. Under current FDA regulations, use of a scientific study to advertise the health benefits of a given product can convert the product from a nutritional supplement into a drug, and therefore impose the vast array of regulations applied to drugs. As a result, nutritional supplement manufacturers have to be very careful about claiming health benefits or citing to scientific research, whether on their product labeling or even on their websites.
In response to these concerns, Congressmen Jason Chaffetz (R-UT) and Jared Polis (D-CO), introduced what they are calling the “Free Speech About Sciences Act.” This proposed legislation seeks to soften the application of these FDA regulations to nutritional supplements. If the law were to pass, companies would be allowed to reference “legitimate scientific research” in support of claims about the health benefits of their products. In order to fall within the definition of “legitimate scientific research,” the study must have been conducted and reviewed according to certain standards, and must appear in a peer-reviewed scientific publication. Companies must also follow certain guidelines in presenting the findings, such as including an accurate and balanced summary of the research, providing consumers a citation to the study, and providing information about the entities who funded the research.
Will the New Health Care Law Improve Chilren's Nutrition?
It is hard to deny that Americans are putting on the pounds and that the problem is often starting with poor nutrition during childhood. The problem has not gone unnoticed and a number of organizations, including the federal government, are trying to trim down the epidemic.
Authors Ellen-Marie Whelan , Lesley Russell, and Sonia Sekhar of the Center for American Progress recently published the report, "Confronting America's Childhood Obesity Epidemic: How the Health Care Reform Law Will Help Prevent and Reduce Obesity" (link to website introducing the report, with links to the full version and executive summary). As is clear from the title, the report analyzes the potential effect of the new health care reform laws on children's nutrition. Specifically, the authors discuss the Patient Protection and Affordable Care Act and highlight the following provisions as those with the most effective measures for combating childhood obesity:
- Improved nutrition labeling in fast food restaurants, which will list calories and provide information on other nutrients (For more information on this specific provision, take a look at Richard Goldfarb's excellent post with his thoughts on the new labeling requirement).
- The Childhood Obesity Demonstration Project, which gives grants to community-based obesity intervention programs
- Community Transformation Grants, which gives grants to community-based efforts to prevent chronic diseases
The report also analyzes a number of other aspects of the law that, while not targeted specifically at combating obesity, the authors believe will have some positive effect on the problem.
Court Cuts Back Claims in Great Pomegranate Dispute
By Guest Blogger Jay Eckhardt
This post also appears in the Food Liability Law Blog
In a dispute over product labeling and marketing, the Coca-Cola Company avoids liability as a result of its careful compliance with FDA rules. (Also, see Rick's post from last week, regarding Coca-Cola's victory in a dispute over its original formula label found on Coke® Classic.) But pomegranate champion POM Wonderful can still pursue a Lanham Act deceptive advertising claim against the company.
On May 5 the U.S. District Court for the Central District of California issued summary judgment orders that cut out two of POM's claims against Coca-Cola's "Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Juice Blend." (Download a copy of the Central District of California's Order here.)
The court acknowledged that consumers have griped about the emphasis on pomegranate and blueberry in the Minute Maid product labeling and advertising. (See Ken's post about a consumer class action concerning Tropicana's pomegranate blueberry juice blend here.) Still, the court agreed with Coca-Cola that POM could not bring a Lanham Act claim challenging the product name, because the company complied with FDA labeling requirements. The Minute Maid product contains less than one-half of one percent (0.5%) pomegranate and blueberry juice, but the court determined that the name is compliant with FDA rules, which allow for product names that prominently cite ingredients that are less than prominent in volume. Because the label clearly notes that the juice is "flavored" with pomegranate and blueberry juice and that the juice is a "blend" of several juices, the court held that the name complies with applicable FDA regulations (21 C.F.R. §§ 102.33(c) and 101.22(i)(1)(i)).
A second claim raised by POM was thrown out by the court. POM sought restitution under California Business & Professions Code section 17200, which provides a cause of action for "Unfair Competition." The court dismissed this claim because "restitution" has been narrowly interpreted by the California Supreme Court, thus barring POM's claim for recovery of a "lost business opportunity." Among authorities cited for the decision to dismiss this claim, the court reported that POM's similar claims under California's Unfair Competition law, brought against Tropicana and Welch's, have recently been dismissed in separate actions.
A third claim survived Coca-Cola's summary judgment attack. POM may proceed under the Lanham Act to challenge the marketing and advertising for the "blueberry pomegranate" product. The court held that POM may attempt to prove at trial that advertising and marketing actually deceived customers, or that Coca-Cola willfully and intentionally misled customers with the marketing of its product.
As noted from the court's order, Coca-Cola is not the only target of POM's litigation strategy. Other juice makers, Tropicana and Welch's, have been the focus of POM's efforts to defend its niche. Ken reported on POM's challenge to Ocean Spray's pomegranate cranberry juice blend last August, when POM survived Ocean Spray's initial motion to dismiss all claims.
An inspired marketing campaign for POM's products, and its essential ingredient, helped build the pomegranate franchise. It's hard to say whether litigation against advertising and labeling practices of POM's pomegranate competitors will be effective. At the same time, there's no doubt that POM is well aware of the burdens of FDA labeling regulations – the company was one among 17 companies notified by the FDA last February that its product labeling and advertising did not pass muster. The FDA warned POM that its advertising was suspect, based on the health claims made on its web site about the benefits of pomegranate juice.
Energy Drinks and Nutrition Bars too Related to Avoid Consumer Confusion
The Trademark Trial and Appeal Board (TTAB) recently issued a decision that highlights the importance of not assuming that goods that fall in different international trademark classes are unrelated in a likelihood of confusion analysis. In In re Spirits of the USA, LLC (not citable 4/21/10), the TTAB held held that energy drinks (class 32) and nutrition bars (classes 5 and 30) are too related to avoid a likelihood of consumer confusion when used in connection with the mark "Runner". The TTAB concluded that energy drinks and nutrition bars both provide energy and are commercially related products that are sold in the same channels of trade to the same classes of consumers, so confusion is likely.
How can you know if the relationship between the products you plan to list in your trademark application and those in an existing third party registration are likely too close? Do what examining attorneys at the USPTO do: search for third party registrations that list both your products and the products listed in the registration in question. If a number of these third party registrations exist, the examining attorney is likely to cite them in a refusal claiming that this evidence suggests that the listed products are of a type which may emanate from a single source and therefore are likely to cause confusion in the marketplace. (See In re Albert Trostel & Sons Co., 29 USPQ2d 1783, 1785-86 (TTAB 1993)).
"Can You Really Afford To Do Business Without Politics?"
“I often hear people say that they will just focus on the business side of things and not worry with the politics, but the question is: can you really afford to do business without politics.” - Daniel Fabricant, PhD of the Natural Products Association. This is an interesting question presented in today's article on Nutra Ingredients-USA.com regarding lobbying for the nutrition industry, and what some insiders identify as excessive freeloading by U.S. nutrition companies.
The article presents the view that companies are not doing enough to let the industry's voice be heard in Washington, quoting one source saying that many display "all the characteristics of a parasite". To show the benefit of organized political efforts by nutrition-related companies, Suzanne Shelton gives the example of Senator McCain's withdrawal of support from S.3002 but warns that the industry needs to step up to avoid losing advocates like Senator Orrin Hatch and Congressman Frank Palone Jr.
So industry insiders, is lobbying a necessary component of growth and stability for the nutrition industry?
Thanks to Tyler Anderson of the Food Liability Law Blog for forwarding the article.
