Nutrition Consulting Firm Sues Gatorade Over “SportsFuel” Trademark

SportsFuel, Inc., a nutrition consulting firm outside of Chicago, has filed a lawsuit against PepsiCo Inc. and its wholly-owned subsidiary The Gatorade Company  over the SPORTSFUEL trademark.  SportsFuel owns federally-registered trademarks for SPORTSFUEL and alleges that, “[o]ver the past two decades, SportFuel, Inc. has performed nutritional consulting for a number of elite sports teams, including the Chicago Blackhawks, the Chicago White Sox, the Chicago Bears, [and] the Chicago Bulls….”

The lawsuit was apparently triggered by Gatorade’s recent campaign to market itself as “The Sports Fuel Company,” which Plaintiff alleges is likely to confuse consumers as to sponsorship, authorization, affiliation, and/or association between the companies.

Notably, this is a case where Plaintiff will likely argue that there is the potential for “reverse confusion.”  Under this type of trademark infringement, the subsequent user’s promotion of the mark overwhelms the use by the prior user such that purchasers start to associate the mark with the subsequent user.  As a result, there is reverse confusion, with purchasers likely to believe that the goods or services offered by the prior user are actually those of the subsequent user.

Campbell Seeks Dismissal of “Healthy” Labeling Lawsuit

Campbell Soup Company (“Campbell”) has moved to dismiss a putative class action lawsuit alleging that Campbell’s Chunky™ Healthy Request® Grilled Chicken & Sausage Gumbo Soup product is falsely and misleadingly advertised as “healthy” because it contains partially hydrogenated oils (PHO’s, i.e. artificial trans fats) that are harmful to human health.

In its motion, Campbell argues that the USDA’s review and pre-approval process for labels pre-empts the suit because that regulatory framework specifically looks at whether labels are false or misleading and includes “pervasive” regulations relating to “healthy” claims. Campbell contends that these regulations — as propounded pursuant to the Poultry Products Inspection Act and the Federal Meat Inspection Act — prohibit any consumer protection claims under state law.

Ultimately, the key question will be whether the Court accepts that the suit seeks to impose requirements on “approved labels” that add to, or differ from USDA’s requirements relating to “healthy” claims.   In some cases, courts have rejected preemption arguments on the grounds that the lawsuit seeks to help, rather than hinder, the federal objectives.  But Defendants may have an uphill claim to the extent the court agrees with Campbell that its labels fully comply with USDA regulations for “healthy” claims, which do not expressly prohibit the existence of trans fats.


Congress Passes GMO Labeling Bill, President Obama To Sign into Law

On July 14th, Congress passed a GMO labeling bill by a vote of 306-117 that would preempt Vermont’s mandatory labeling act that went into effect on July 1st.  The White House said President Obama will sign the bill into law.

Under the legislation, explicit labeling of GMO ingredients is voluntary and companies are allowed to instead use a computer-generated QR (quick response) code to identify GMO ingredients.  Consumers can scan the QR code with a smartphone which takes them to a website to find out if a product includes GMOs ingredients.  The Organic Trade Association, which has supported mandatory labeling, supported the bill because, among other things, it includes a provision allowing organic food companies to label their products as non-GMO.

Notably, the FDA has stated that if modified genes are removed in the manufacturing process ― which can happen with ingredients such as corn syrup and canola oil ― there is no requirement for notification under the law.  But the Agriculture Department, which would oversee GMO labeling under the law, apparently disagrees with that interpretation.  Accordingly, many believe the scope of ingredients requiring notification under the new law might ultimately be decided by courts.

Republicans and Congresspersons from rural states strongly supported the legislation. “The clock has run out, my producers need certainty and an interstate commerce nightmare will shortly ensure if we don’t pass this bill,” said Rep. Rodney Davis, R-Ill.

Federal Circuit Rules that MAYA Trademark for Wine is “Sufficiently Dissimilar” from MAYARI Wine

On appeal from the U.S Trademark Trial and Appeal Board (the “Board”), the Federal Circuit ruled on June 24th that consumers are not likely to confuse the trademarks MAYA and MAYARI with respect to wine.  Georgallis Holdings, LLC (“Georgallis”) filed an application with the U.S. Patent and Trademark Office to register the trademark MAYARI for use on wine.  Oakville Hills Cellar, Inc. (“Oakville”), d/b/a Dalla Valle Vineyards, opposed the registration alleging that the mark would likely cause confusion with Oakville’s previously registered mark MAYA for wine.


Accordingly, the appeal focused on DuPont factors for assessing likelihood of confusion:
(1) the similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression; (2) the similarity or dissimilarity of the goods as described in an application or registration or in connection with which a prior mark is in use; (3) the similarity or dissimilarity of trade channels; (4) the conditions under which and buyers to whom sales are made; (5) the fame of the prior mark; (6) similar marks in use on similar goods; (7) the absence of actual confusion; (8) the right to exclude others from use; (9) the extent of potential confusion; and (10) other probative facts, here, federal labelling requirements applicable to wine.

The Board found that (i) the second, third, and fourth DuPont factors favored a finding of likelihood of confusion, (ii) the first DuPont factor favored a finding of no likelihood of confusion, and (iii) the remaining DuPont factors were neutral.

Specifically, for the second DuPont factor, the Board found the goods at issue to be “identical,” despite “a substantial difference in price” and other “differences in the specific nature of the wines” sold by Oakville and Georgallis.  The Board reasoned that “[i]n the context of an opposition proceeding, the question of registrability of an applicant’s marks must be decided on the basis of the identifications of goods set forth in the application and registration at issue.”  Because Georgallis “has requested a registration applicable to all kinds of wine in all price ranges,” and because Oakville’s registration “covers use of its mark on all kinds of wine,” the Board found the second DuPont factor to weigh in favor of a finding of likelihood of confusion. Likewise, the Board found the third and fourth DuPont factors, namely, the similarity of trade channels and the sophistication of buyers, to weigh in favor of a finding of likelihood of confusion.

The foregoing is is a key distinction between evaluating likelihood of confusion for purposes of trademark registration, as opposed to an actual claim of trademark infringement, which allows robust discovery into, and an analysis of, all factual issues.

But with regard to the first DuPont factor, the similarity or dissimilarity of the marks in appearance, sound, connotation, and commercial impression, the Board found that MAYA and MAYARI “are visually similar only in part” because they share the same initial four letters.  Significantly, however, the Board found “no reason to perceive any separation, visual or otherwise, between the MAYA- and -RI portions” of MAYARI because “[t]he letters RI, alone, have no relevant meaning, providing no reason for a customer to view the mark logically as MAYA plus RI, rather than as a single unitary expression.”  The Board also rejected Oakville’s argument that “the bottle label [bearing the mark MAYARI] will inevitably appear to read ‘MAYA’ at certain orientation relative to an observer,” reasoning that “the likelihood of such a mistake remains a matter of speculation, absent evidence regarding the occurrence or regularity of mistakes of this sort.”

Regarding meaning,  the Board agreed with Georgallis and found that “most customers would likely perceive MAYA as a female personal name or the name of the pre-Columbian civilization” and “perceive MAYARI as a coinage without meaning.”  The Board reasoned that “customers would likely find the term MAYA to be somewhat familiar, while finding MAYARI unfamiliar.”  Overall, the Board found that “the marks create significantly different commercial impressions.”  The Board therefore found the first DuPont factor to weigh against a finding of likelihood of confusion.

In balancing the relevant DuPont factors, the Board noted that the parties’ goods are identical and would travel through the same trade channels to the same classes of customers, some of whom would exercise no more than an ordinary degree of care in selecting the goods; but that the marks are visually similar only in part, are only possibly similar in their pronunciation, and would likely be perceived to have different meanings and overall commercial impressions. The Board therefore gave dispositive weight to the first factor and concluded that “the marks are sufficiently different that . . . confusion is not likely.”  Accordingly, the Board dismissed Oakville’s opposition.

On appeal, the Federal Circuit held that (a) “substantial evidence supports the Board’s finding that the marks at issue are sufficiently dissimilar as to appearance, sound, meaning, and commercial impression,” (b) “the Board did not err in finding that ‘no evidence show[ed] that [the marks] would be pronounced alike, and they may well be pronounced quite differently,'” and (c) “substantial evidence supports the Board’s
finding that MAYA is a familiar word, whereas MAYARI has no recognized meaning to U.S. consumers.”

The foregoing can be boiled down to the point that consumers were unlikely to be confused because the MAYA marks communicates specific meanings while the MAYARI mark has no meaning in the U.S.

FDA Allows KIND to Use “Healthy” Claim on its Labels and Will Reevaluate “Healthy” Claims

On May 10, 2016, the FDA announced that Kind LLC may label its snack bars “healthy” so long as it’s clearly part of its “corporate philosophy” and not a nutritional statement.  In conjunction with this statement, the FDA stated that it will be reevaluating the standard for “healthy” claims and, more broadly, all nutrient content claims.

The announcement relates back to a warning letter issued by the FDA to KIND in March 2015 asserting that the labeling of numerous KIND products bore a variety of nutrient content claims, including “healthy” claims, but the products did not meet the requirements to make such claims.  In its recent announcement, the FDA stated that KIND had taken steps to revise its the labels to address these issues.  The FDA then noted that, after resolution of that issue:

KIND requested confirmation that it could use the phrase “healthy and tasty” only in text clearly presented as its corporate philosophy, where it isn’t represented as a nutrient content claim, and does not appear on the same display panel as nutrient content claims or nutrition information. In our discussions with KIND, we understood the company’s position as wanting to use “healthy and tasty” as part of its corporate philosophy, as opposed to using “healthy” in the context of a nutrient content claim. The FDA evaluates the label as a whole and has indicated that in this instance it does not object.

KIND described this permission as a reversal of its 2015 FDA warning letter.  The FDA classified it as a reevaluation after KIND removed or amended nutritional claims on its product labels to meet regulatory standards.

Both positions are valid.  The FDA’s announcement concluded by stating:

In light of evolving nutrition research, forthcoming Nutrition Facts Labeling final rules, and a citizen petition, we believe now is an opportune time to reevaluate regulations concerning nutrient content claims, generally, including the term “healthy.” We plan to solicit public comment on these issues in the near future.

The evaluation of “evolving nutrition research” will no doubt extend to saturated fats in nuts and other foods.  The 2015 FDA Warning Letter to KIND said the term “healthy” was improper because the products did not qualify as “low in saturated fat” as required under FDA regulations.  Most of that saturated fat content came from almonds, cashews or other nuts.  But the FDA’s regulations for what qualifies as “healthy” are 20 years old and conceived when healthy eating was viewed as a low-fat diet.   Much has changed since then including the understanding that some fats are healthy.  Under the outdated, current standards, almonds, avocados, and salmon are generally deemed unhealthy while many  fortified sugary cereals are “healthy.”  Creating new standards for “healthy” claims will take significant time so do not expect any changes until late 2017 at the earliest.

FDA Issues Final Menu Labeling Guidance

The U.S. Food and Drug Administration (FDA) announced on 29th April the publication of its final guidance for industry, “A Labeling Guide for Restaurants and Retail Establishments Selling Away-From-Home Foods – Part II (Menu Labeling Requirements in Accordance with 21 CFR 101.11).”

The FDA intends to begin enforcing the menu labeling final rule one year from the date that the Notice of Availability (NOA) is published in the Federal Register.  The NOA for the guidance is expected to be published in early May 2016.  This guidance is intended to help restaurants and similar retail food establishments understand nutrition labeling requirements under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and implementing regulations that may apply to them.

The complete guidance is available in PDF

Jury Finds in Favor of Coca-Cola in POM False Advertising Suit

UPDATE:  The jury found in favor of Coca-Cola and against POM Wonderful in the trial over whether Coca-Cola misled consumers into believing that Coke’s “Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Blend” contained more than a very small amount of pomegranate juice.  The jury deliberated for less than one day following a six-day trial.

Coke’s position was primarily that (1) pomegranate juice has a strong taste and a small amount imparts flavor and (2) consumers understand the difference between a juice’s featured flavor and its ingredient statement.  POM, in contrast, argued that Coca-Cola’s labeling gave it an unfair competitive advantage because pomegranates have unique health benefits sought by consumers who were misled into believing they could obtain those benefits in Coca-Cola’s “100%” juice-blend product.  Although this case puts a damper on POM’s avowed intent to “clean up the industry,” POM’s success at the Supreme Court and shifting public opinion on labeling are likely to curtail the labeling practices of similar products in the foreseeable future.