Jonathan Stagg
Jonathan Stagg is an associate practicing in the Corporate, Securities and Finance section of the firm's Business Services group. Jonathan assists clients with mergers and acquisitions, business formation, public and private offerings, venture capital and general securities law compliance.
Peeled, Inc. Seeks Injunction, Damages in Trademark Infringement Suit Against Peeled Fruit LLC
Peeled, Inc. (“Peeled”) www.peeledsnacks.com, a company specializing in healthy, natural snack foods including dried fruits and dry roasted nuts, recently filed a trademark infringement suit in the United States District Court for the Southern District of New York against Peeled Fruit LLC (“Peeled Fruit”) www.simplypeeled.com. Peeled Fruit sells frozen soft-serve fruit, with fresh fruit toppings. Peeled alleges that Peeled Fruit is attempting to cash in on the brand awareness and goodwill associated with Peeled’s marks.
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Peeled began marketing its products under the marks “Peeled,” “Peeled Fruit,” and “Peeled Snacks” as early as 2004. Since that time, Peeled’s marks have received extensive coverage in television and print media, including receiving a coveted spot on Oprah’s O List as one of Oprah’s favorite afternoon snacks, and receiving the 2008 “Best of Food” award from Health Magazine. Peeled registered the mark “PEELED SNACKS” on January 10, 2006 with the United States Patent and Trademark Office..jpg)
Peeled alleges that Peeled Fruit not only knew about Peeled’s use of the marks, Peeled Fruit “adopted the trademarks with the intent to trade and capitalize on the goodwill generated by Peeled, Inc.’s extensive and widespread use of its trademarks, as well as its extensive sales, advertising and consumer acceptance and recognition.” Peeled argues that the similarities between the products sold by both companies make the shared use of the marks likely to cause confusion, mistake and deception among consumers.
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.
Preparing Your Company For Good Manufacturing Practice (GMP) Inspections
The dietary supplement industry has faced uncertainty over how FDA Inspectors will enforce the new Good Manufacturing Practice (GMP) regulations (21 C.F.R. 111). GMP inspections began last year, and dietary supplement manufacturers can now look to inspection observations reports filed by FDA inspectors to prepare their companies in advance of GMP inspections.
Although the GMP regulations currently apply only to companies with more than 20 employees, the rules are set to expand to include smaller manufacturers soon. Steve Meyers, of NaturalProductsInsider.com recently prepared a good summary of FDA inspection observation reports filed within the past year. Here are the higlights:
- Procedures: Inspectors carefully analyze a company’s procedures to ensure that procedures are written, complete, and cover every element of the manufacturing process.
- Implementation of Procedures: Inspectors focus on how effectively each aspect of the company’s written procedures are being implemented.
- Cleanliness: Inspectors focus heavily on cleanliness of the facility, how materials are transported and stored, sanitation procedures, etc.
- Testing: Inspectors focus how effectively the company tests each phase of the manufacturing process, from identifying the quality of the raw materials to verifying the strength of the seal on the packaging.
- Design of Facility: Inspectors even focus on the overall design of the facility, including wither the design ensures proper sanitation, quality control procedures, etc.
Dietary Supplement Manufacturers Encounter "New Drug" Labeling Pitfalls In FDA's Enforcement of Federal Food, Drug, and Cosmetic Act
Manufacturers of dietary supplements should continue to keep a wary eye toward the claims they make in their product labeling, in light of recent government action. Regulatory enforcement actions by the FDA, in association with the United States Attorney’s Office, highlight the risks associated with the manufacture and labeling of dietary supplements.
Recently, government ire was peaked when one dietary supplement manufacturer made broad labeling claims touting its products’ ability to diagnose, mitigate, treat, cure or prevent certain diseases (including diabetes, irritable bowel syndrome, gout, high blood pressure, heartburn and diarrhea).
According to the government, the maker’s claims made it subject to several FDCA provisions, including Section 343(r)(6), and corresponding requirements under the Code of Federal Regulations. Consequently, the claims reflected in the products’ respective labeling resulted in the “designation” of each as a “new drug,” triggering federal regulatory compliance relating to the maker’s submission, and subsequent government regulatory review, of New Drug Applications (NDAs), Abbreviated New Drug Applications (ANDAs) or Investigational New Drug applications (INDs), for each product.
After each was designated a “new drug”, the following enforcement action was filed by the United States Attorney’s Office: United States v. Thao, et al (.pdf). Further, the “new drug” designation, and the resulting trigger of additional regulatory requirements, left the maker subject to charges stemming from several statutory violations leading to government claims of wire and mail fraud, money laundering and conspiracy.
The stakes associated with inaccurate or overreaching product labeling are high. Effective guidance through the labeling process, with the advice of counsel familiar with requirements under Federal law, is a must.
