Q&A with Food Business News on Clean Label Claims and other Hot Topics

It was my pleasure to participate in a Q&A with Food Business News on clean label claims and a other hot topics.   Please see here.

Trademark Battle over “Umami Burger” in Chicago

On June 17th, Umami Restaurant Group Inc. (“URG”) filed a trademark infringement lawsuit against Wsong, Inc., d/b/a as bopNgrill, a Korean inspired burger restaurant located in Chicago.  URG complains that BopNgrill is selling a “Umami Burger”menu item and that this creates a likelihood of consumer confusion between the two restaurants.

URG operates a chain of burger joints called Umami Burger, most of which are in California.   The first location in the Midwest opened in Chicago in 2014.  It owns several U.S. trademark registrations relating to UMAMI BURGER, the earliest of which was filed on August 4, 2011.

URG will likely face two hurdles in pursuing its lawsuit.  First, bopNgrill opened its first restaurant in 2009 and has been at its current location since 2011.  Although it is unclear when bopNgrill first sold an “umami burger,” if it was prior to the filing date of URG’s trademark application, then bopNgrill can argue that it has priority to the name “Umami Burger” in the Chicago area.  That is because trademark use is the key to establishing priority in a particular territory.  Although a federal trademark registration gives a trademark owner rights at the national level, those rights only start on the filing date of the application and prior use in a geographic area trumps a later-filed application where the registrant didn’t use the mark in that particular territory.

Second, umami is a descriptive term for a savory taste, which is considered one of the five basic tastes (along with sweet, bitter, sour and salty).  Accordingly, bopNgrill can argue that URG’s trademark rights are weak since trademark law limits the protections given descriptive trademarks.  After all, a burger joint has a right to describe its burgers as savory.  This argument has more force for bopNgrill as well because it’s using “umami” in connection with a menu item rather than the store itself.   Although bopNgrill is apparently not using “umami” in a strictly descriptive manner, it can assert that this case is analogous to someone trying to prevent others from selling “salty pretzels.”

This case underscores the risks of having a brand name tied to a descriptive mark which can increase the time and effort that must be expended to police the associated trademark rights.

Bulleit Bourbon is Latest Target of Deceptive Advertising Lawsuits Against the Spirits Industry

Bulleit Bourbon, owned by Diageo plc, has been sued for false advertising, deceptive trade practices and unfair competition in light of allegedly misleading statements on its bottles.  In a spate of recent lawsuits,  Tito’s Vodka, Maker’s Mark, and Jim Beam were targeted because of “handmade” claims.  The Bulleit lawsuit targets a different but common practice in the spirits industry.  Specifically, the Complaint alleges that Bulleit’s label erroneously states that the product is “DISTILLED BY THE BULLEIT DISTILLING CO … IN LAWRENCEBURG, KENTUCKY.”  Rather, the complaint alleges, Bulleit does “not currently operate a distillery in Lawrenceburg, Kentucky” and its products are actually “’distilled’ and/or produced by the Kirin Brewing Company, Limited.”

For support, Complaint refers to an article by Bloomberg Business titled Bourbon Bait and Switch: What’s Really in Your Glass? which asserts that Bulleit, “[d]espite saying on the label that it’s ‘distilled by the Bulleit Distilling Company in Lawrenceburg, Kentucky,’ there is in fact, no such thing.”  Reference is also made to an article from Fox Business, titled Global Liquor Giant Diageo To Produce Bulleit Bourbon, Rye Whiskeys At New Kentucky Distillery, which notes that Bulleit is currently made at a non-Diageo distillery in Kentucky.

What the Complaint doesn’t mention is that it is generally known that Bulleit Bourbon sources their bourbon from Four Roses Distillery which is, in fact, located in Lawrenceburg, Kentucky (and owned by Kirin Brewing Co. Ltd).  And that this practice of sourcing whiskey is quite common but not generally highlighted on labels.

Nevertheless, the key questions in the lawsuit are likely to be: How was anyone harmed by Bulleit sourcing its bourbon from a respected distiller in Kentucky as opposed to distilling the bourbon in Kentucky itself?  And is there an identifiable class of consumers that reasonably relied on the alleged misrepresentations in purchasing the product?

For its part, the Complaint offers the usual allegations for damages, i.e., that “Plaintiff and other similarly situated consumers” were presented with “the false impression that the bourbon was of superior quality by virtue” the misrepresentations, that they therefore overpaid for the bourbon, and “had they been made aware that Bulleit Bourbon was not was not distilled by or at ‘THE BULLEIT DISTILLING CO.,’ they would have not purchased the bourbon, or would have paid less for the product, or would have purchased a different product from another manufacturer.”

A spokesperson for Diageo has labeled the lawsuit as  a “baseless and frivolous action.”

My Q&A with Food Manufacturing on Food Labeling Issues

It was my pleasure to participate in a Q&A with Food Manufacturing Magazine to provide an update and insight on significant labeling issues, which can be found here.

My Article in Food Safety Magazine on Court Ruling That Vermont’s GE-Labeling Requirement Will Move Forward

Please see my article in Food Safety Magazine located HERE.

Court Dismisses Suit Against Maker’s Mark Over “Handmade” Claims

I previously wrote about the lawsuit against Maker’s Mark regarding claims that its bourbon is “handmade.”   The complaint alleged that the “handmade” claims were false or misleading because “Defendant actually employs mechanized and/or automated processes to manufacture and bottle its whisky, including but not limited to, (1) the process involved in grinding / breaking up the grains;
(2) the process involved in mixing the grains with other ingredients, such as yeast and water; (3) the process involved in transferring this mixture into its fermenting location; and, (4) the process involved in bottling the whisky.”

On May 1, 2015, the Court dismissed plaintiffs’ complaint as a matter of law, because “nobody could believe a bourbon marketed this widely at this volume is made entirely or predominantly by hand.”   Significantly, plaintiffs were unable to articulate a plausible and consistent definition of “handmade” in this context, especially since they had to concede that it could not mean “made entirely by hand.”  In this regard, the court held that “[n]o reasonable person would understand ‘handmade’ in this context to mean substantial equipment was not used.”  And [i]f ‘handmade’ means only made from scratch, or in small units, or in a carefully monitored process, then the plaintiffs have alleged no facts plausibly suggesting the statement is untrue.”

Ultimately, the court found that “handmade” in this context was little more than “a general, undefined statement” that, even if it connotes greater value, is mere “puffery” and could not support plaintiffs’ claims “detached from any factual representation.”  As the court observed,”One might as easily label a bourbon ‘smooth’ or say it is made with the same skill and care as has been used for decades.”

Please see the complete opinion HERE.  The ruling is compelling and will likely sway courts handling similar claims, including the Tito’s Vodka case I previously discussed where a similar motion to dismiss is pending.

Kind Snack Bars Hit with Putative Class Action Following FDA Warning Letter Over “Healthy” Claims

It was about as surprising as gridlock in Washington D.C. when a putative class action was filed yesterday (April 22) against Kind LLC following an FDA warning letter dated April 17th regarding alleged “healthy” claims on Kind’s snack bars.

In the warning letter, the FDA asserted that the labels of certain Kind snack bars  bear the claim “Healthy and tasty, convenient and wholesome” in connection with statements such as “good source of fiber,” “no trans fats,” “very low sodium” and “+ antioxidants.”  The FDA stated, however, that none of those products “meet the requirements for use of the nutrient content claim ‘healthy’ that are set forth in 21 CFR 101.65(d)(2).”

To no one’s surprise, less than a week after the warning letter, a putative class action lawsuit was filed that piggy-backed off the FDA warning letter.  In the Kind Lawsuit, plaintiff Charity Bustamante simply contends that certain Kind snack bars “are misbranded in violation of the Federal Food, Drug and Cosmetic Act … for the reasons set forth in a warning letter that the FDA sent to Defendant on or about March 17, 2015.”

In addition, plaintiff alleges that Kind LLC “falsely and prominently labels [certain Kind snack bars] as ‘All Natural’ and ‘Non GMO,’ while manufacturing the Products with genetically modified and non-natural, highly processed ingredients including soy lecithin, soy protein isolate, and canola oil.”

Based on these allegations, the plaintiff asserts the usual claims for: (1) breach of express warranties; (2) violations of California’s Consumers Legal Remedies Act; (3) violations of California’s False Advertising Law; and (4) violations of California’s Unfair Competition Law.  Please see the entire Complaint here.

Just last month, a putative class action against Kind LLC was dismissed with prejudice that involved “no refined sugars” claims on its Healthy Grains products.  In light of the FDA warning letter in the recently-filed case, however, obtaining a similar ruling in the early stages will be more difficult.