Buffalo Trace Targets Bison Ridge in Trademark / Trade Dress Dispute

Bison-Buffalo

Sazerac Co., the owner of the Buffalo Trace Distillery and its flagship BUFFALO TRACE bourbon, has filed suit against Crosby Lakes Spirits, Co. in the Western District of Kentucky for federal trademark and trade dress infringement and unfair competition.  Sazerac complains that Crosby Lakes Spirits’ BISON RIDGE Canadian Whiskey is a competing product with a confusingly similar trademark and product packaging.

Each of the BISON RIDGE bottles prominently feature a sketched rendering of a standing, forward-facing buffalo, similar to the Buffalo Logo displayed on Sazerac’s BUFFALO TRACE product packaging. As with Sazerac’s BUFFALO TRACE whiskey, BISON RIDGE whisky is golden brown in color and both of its products (BISON RIDGE BLENDED CANADIAN WHISKY and BISON RIDGE SPECIAL RESERVE CANADIAN WHISKY) are marketed in clear bottles featuring the same color combination of brown, white, and gold.  In addition, as with Sazerac’s BUFFALO TRACE product packaging, the neck label on the 1.0 Liter and 1.5 Liter BISON RIDGE BLENDED CANADIAN WHISKY products incorporate an image of a forward-facing buffalo in gold situated in between and immediately above the words “BISON” and “RIDGE,” which are displayed in white font.

The defendant has responded to the Complaint with a motion to dismiss for improper venue, arguing that the case should have been brought in Minnesota.

This case highlights that owners of well-known brands (and if you know bourbon then you know Buffalo Trace) must vigilantly police their trademark and trade dress rights.  Here, even if  a reasonable consumer might not mistakenly purchase the BISON RIDGE product believing it was BUFFALO TRACE bourbon, there is a solid argument that a reasonable consumer would believe the BISON RIDGE product is sponsored by, approved by, or otherwise associated with Sazerac and its Buffalo Trace product.  And if Sazerac did not take action, then its trade mark and trade dress would be somewhat weakened since there would multiple buffalo / bison marks in the same product category, i.e., whiskey.

March 27 Webinar: Legal Pitfalls in Marketing and Labeling of Food and Beverage Clients

I am presenting a webinar next Thursday, March 27, 2014 from 1:00 to 2:00 pm EST titled Legal Pitfalls in Marketing and Labeling of Food and Beverage Products.  The webinar is free and CLE credit is available.

The program provides a framework for understanding the key players and issues that shape the conduct of food companies in marketing and labeling their products.  This will include a brief summary of relevant regulations and government agencies, as well as activists and consumer movements, that are influencing how food is marketed in the United States.  The program will then examine numerous class-action lawsuits as case studies to highlight the risks faced by food companies and the various forces that influence, or seek to influence, their behavior.  The webinar is presented by Momentum events.

All are welcome and you may sign up for this event here.

FDA Proposes Updates to Nutrition Facts Label

As anticipated, the FDA has announced its proposed updates to the Nutrition Facts label for food packages.

Proposed                             Current

Proposed-NF

Current-NF

Proposed changes include:

  • Including “added sugars” on the label to help consumers know how much sugar has been added to the product.
  • Updating serving size requirements to reflect the amounts people currently eat.
  • Adding “dual column” labels to indicate both “per serving” and “per package” calorie and nutrition information for larger packages that could be consumed in one sitting or multiple sittings.
  • Requiring the declaration of potassium and vitamin D.
  • Revising the Daily Values for a variety of nutrients such as sodium, dietary fiber and Vitamin D.
  • Removing total “Calories from Fat” but continue to require information on “Total Fat,” “Saturated Fat,” and “TransFat.”
  • Refreshing format to emphasize certain elements, such as calories, serving sizes and Percent Daily Value.

None of these proposals were unexpected.  The FDA will accept public comment on the proposal for 90 days.

Trader Joe’s Settles “All Natural” Lawsuit for $3.4 Million

A federal judge has preliminarily approved a settlement in a class-action lawsuit in which Trader Joe’s was accused of falsely advertising certain cookies, cinnamon roles, “fresh pressed” apple juice and other products as “all-natural” when they contained ascorbic acid, potassium carbonate in the form of cocoa processed with alkali, vegetable mono and diglycerides, xanthan gum, and/or sodium acid pyrophosphate, all of which plaintiffs alleged are synthetic.

Notably, plaintiffs cited the following statement in their Complaint that had been on the FAQ section of the Trader Joe’s website.

If you see Trader Joe’s on a label, then you can know that the product contains NO artificial flavors, colors or preservatives; NO genetically modified ingredients; NO MSG; and NO added Trans Fats. What does it contain?  Quality

Under the proposed settlement, Trader Joe’s will establish a settlement fund of $3.375 million from which class member may receive payment for the average price of the purchased goods.  Trade Joe’s has also agreed to stop advertising the products as “all-natural.”

Supreme Court to Decide Whether POM Can Sue Coke Over Labels That Satisfy FDCA

Minute-MaidThe Supreme Court has agreed to hear an appeal by POM Wonderful LLC in its  suit against Coca-Cola regarding allegedly misleading labels.  The case was originally filed by POM in 2008 when it alleged that Coca-Cola misled consumers about the contents of its Minute Maid “Pomegranate Blueberry” juice (with “flavored blend of 5 juices” in smaller type below).  The claims were brought under the false advertising provision of Lanham Act as well as under California’s Unfair Competition Law and False Advertising Law.  POM claimed the label is misleading to consumers because, despite the name, the product  contains very little pomegranate or blueberry juice and consists of, instead, approximately 99% apple and grape juice, which is less-expensive (specifically, 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice).

But Coca-Cola said the images on the product correctly identify the five fruits in the juice blend and that the name – “Pomegranate Blueberry – flavored blend of 5 juices” – informed consumers as much while describing that the blend tastes like pomegranate and blueberry.

The 9th Circuit affirmed the district court’s grant of summary judgment to Coca-Cola because POM was impermissibly challenging FDA regulations permitting the name and labeling that Coca-Cola used.  It reasoned that the Food, Drug and Cosmetic Act (“FDCA”) comprehensively regulates food and beverage labeling which, in turn, means that a plaintiff cannot sue under the Lanham Act (1) to enforce the FDCA or its regulations; (2) to interpret ambiguous FDA regulations; or (3) even to decide whether conduct violates the FDCA.  Accordingly, express preemption existed.

As best we can tell, Coca–Cola’s label abides by the requirements the FDA has established.  We therefore accept that Coca–Cola’s label presumptively complies with the relevant FDA regulations and thus accords with the judgments the FDA has so far made. Out of respect for the statutory and regulatory scheme before us, we decline to allow the FDA’s judgments to be disturbed.

The 9th Circuit thus did not reach the question of whether the label was, in the context of a Lanham Act claim, deceptive and/or misleading.

On appeal to the Supreme Court, the question presented as stated by POM is:

Whether the court of appeals erred in holding that a private party cannot bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.

Coke frames the question differently:

Whether the Ninth Circuit correctly held that a private litigant cannot use the Lanham Act’s general prohibition against “misleading” statements to challenge a product name and label specifically authorized, and deemed “not misleading,” by regulations duly issued by the [FDA] pursuant to the [FDCA].

The subtext of the case is that POM was losing sales to Minute Made in the face of POM’s extensive advertising and promotion of its  pomegranate juice products as having particular health benefits (for which it has received attention from FTC as noted in my prior posts here).  The case will likely be argued before the Supreme Court in April with a ruling expected by June. 

FDA Declines Courts’ Requests to Determine if GMO’s Allowed in “Natural” Products

The FDA has declined the referral requests from three U.S. District Courts seeking to have the FDA pronounce on whether “GMO ingredients may be used on food products labeled as “natural” or “all natural.”   The three cases are Cox v. Gruma Corp., 4:12-cv-6502 (N.D. Cal.), Barnes v. Campbell Soup Co. 3:12-cv-05185 (N.D. Cal.) and In Re General Mills, Inc. Kix Cereal Litigation, 2:12-cv-00249 (D. N.J.).

The FDA explained its rationale as follows in a January 6, 2014 letter to the three relevant judges signed by Leslie Kux, Assistant Commissioner for Policy:

FDA has not promulgated a formal definition of the term “natural” with respect to foods.  The agency has, however, stated that its policy regarding the use of the term “natural” on food labeling means that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would normally be expected to be in the food.”   See 58 Fed. Reg. 2302, 2407 (1993).

If FDA were inclined to revoke, amend, or add to this policy, we would likely embark on a public process, such as issuing a regulation or formal guidance, in order to determine whether to make such a change; we would not do so in the context of litigation between private parties.  Issuance of a regulation or guidance document allows an agency to obtain data, information, and views from all stakeholders wishing to engage on an issue.  ….
 [In addition,] [a]ny definition of “natural” on food labeling has implications well beyond the the narrow scope of genetically engineered food ingredients about which the Court’s referral pertains.   For example, if the agencies were to define the term, they would likely need to consider among other things: relevant science; consumer preferences, perceptions, and beliefs; the vast array of modern food production technologies in addition to genetic engineering (e.g., use of different types of fertilizer, growth promotion drugs, animal husbandry methods); the myriad food processing methods (e.g., nanotechnology, thermal technologies, pasteurization, irradiation); and any strictures flowing from the First Amendment.  Thus, even if we were to embark on a public process to define “natural” in the context of food labeling, there is no assurance that we would revoke, amend, or add to the current policy, or develop any definition at all.
In other words, the FDA is keenly aware that an effort to craft a comprehensive definition of “natural” necessarily opens the door to an array of issues and interest groups that would complicate an already complex process.  Thus, the FDA concluded by observing that its current priorities are public health and safety matters, including developing regulations relating to the Food Safety and Modernization Act and the Patient Protection and Affordable Health Care Act.
The FDA’s response is not necessarily a rejection of the GMA’s recent request to have the FDA define natural (as set forth in my prior post).   Rather, the FDA is noting to these courts that the rule-making process would take years, that it is not inclined to start that process now, and that it would not engage in this process in the context of litigation.

GMA Encourages FDA to Act on Labeling of GMO Ingredients as “Natural”

I previously wrote about two U.S. District Courts which stayed class action suits targeting “all natural” claims in light of the primary jurisdiction doctrine.  See here and here.  Both courts deferred to the FDA’s “unique expertise and resources suited to resolving the issues presented by Plaintiff’s claims,” i.e., whether use of GMO ingredients precludes any use of “all natural” claims.  The cases were stayed for six months with the potential for additional extensions of time based on good cause, including an indication from the FDA that it intends to resolve this issue.

Two other courts, however, rejected this approach because, in part, “various parties have repeatedly asked the FDA to rule on “natural” labeling, and the FDA has declined to do so because of its limited resources and preference to focus on other priorities.”  See here.

The Grocery Manufacturers Association (GMA) is now urging the FDA to move forward and resolve the issue as requested  by the two U.S. District Courts.  In a letter dated December 5, 2013, the GMA asked the FDA, in light of the district court referrals, to “actively address this question through the rule making process” which will “bring uniformity and consistency to both consumers and food manufacturers.”  In addition, the GMA noted:

GMA’s members have a strong interest in “natural” labeling for foods containing ingredients derived from biotechnology.  Several of the most common ingredients derived from biotechnology are  from crops such as soy, corn, canola, and sugar beets.  There are 26 state legislatures considering whether foods containing ingredients derived from biotechnology should be labeled and whether they are permissible in “natural” foods.  Moreover, there are approximately 65 class action lawsuits that have been filed against food manufacturers over whether foods with ingredients allegedly derived from biotechnology can be labeled “natural.”  Given the predominant use of crops derived from biotechnology in our economy as well as consumer and state interest in this issue, whether foods that contain ingredients derived from biotechnology can be labeled “natural” is an important matter to GMA members and is one that warrants FDA’s involvement.

See the complete GMA letter here and its separate website The Facts About GMOs.

The FDA’s request comes on the heels of a letter from the Center for Food Safety to the FDA which provided a contrary view.  Notably, the Center for Food Safety’s chief concern that the FDA might define “the term ‘natural’ for use on food labels in an ad hoc, fact-specific, and haphazard manner, per individual court request, lacking public process and general applicability.”  It then requested basically the same relief sought by the GMA – that the FDA “should address this issue by defining “natural” through the rulemaking process provided for by the Administrative Procedure Act (APA), which requires that the agency provide notice of proposed rulemaking and an opportunity for the public to comment.”  It added:

In the alternative, if FDA does choose to act in the context of litigation, we urge FDA to define “natural” in a way that prohibits the labeling of any food as “natural” that was produced in whole or in part through the process of genetic engineering or that contains ingredients derived from genetically engineered organisms.

The Center for Food Safety states that it represents the “food movement” and, in a press release issued after the GMA’s letter, added:

There is nothing natural about genetic engineering, which is exactly why the Grocery Manufacturers Association wants FDA to create a special exemption for it.  Natural is a great marketing tool and the industry doesn’t want to be restricted in using it. FDA should not respond to GMA’s demands for a special GMO loophole. FDA has a duty to protect consumers, not industry.

Time will tell whether the FDA decides to accept the district court referrals, but color me doubtful.