Monthly Archives: May 2012

My Q&A with FoodManufacturing.com on Nutella Class Action Settlement

Here’s a link to my new Q&A with Food Manufacturing.com, “Judging by the Label,” regarding the recent Nutella class action settlement and its ramifications for other food companies.

FDA Rejects Corn Refiner’s Petition to Allow “Corn Sugar” as Alternate Name for HFCS

In November 2010, the Corn Refiners Association (“CRA”) petitioned the FDA to allow “corn sugar” as an alternate ingredient name for high fructose corn syrup (“HFCS”).   The corn industry wanted to escape an increasingly negative impression of HFCS by using a more wholesome and “less complicated” name for the ingredient.  This petition was strongly opposed — not surprisingly — by the sugar industry, which went so far as to sue the CRA in federal court for ads which stated, “Whether its corn sugar or cane sugar, your body can’t tell the difference.”

On May 30, 2012, the FDA issued its Response which squarely rejected the CRA’s petition.  First, the “FDA’s regulatory approach for the nomenclature of sugar and syrups is that sugar is a solid, dried, and crystallized food; whereas syrup is an aqueous solution or liquid food….  FDA’s approach is consistent with the common understanding of sugar and syrup as referenced in a dictionary.”  Accordingly, “use of the term ‘sugar’ to describe HFCS, a product that is a syrup, would not accurately identify or describe the basic nature of the food or its characterizing properties.”

Second, “FDA’s longstanding regulations … describe and define corn sugar as ‘dextrose'” and the petition does not support using “corn sugar” as “an alternative name for a sweetener that is different from dextrose.”

Finally, “corn sugar” has “been known to be an allowed ingredient for individuals with hereditary fructose intolerance” and  “changing the name for HFCS to “corn sugar” could put these individuals at risk and pose a public health concern.”

Accordingly, the CRA’s petition didn’t “provide sufficient grounds for the agency to authorize ‘corn sugar’ as an alternate common or usual name for HFCS.”

The FDA’s ruling will certainly be fodder for the sugar association’s efforts to combat the CFR’s marketing campaign.  On the other hand, the CFR has already stated that the FDA’s denial was based “on narrow, technical grounds” and “[t]hey did not address or question the overwhelming scientific evidence that high fructose corn syrup is a form of sugar and is nutritionally the same as other sugars.”  Sounds like this bitter, PR battle will continue for some time.  At this time, however, the Sugar industry has the upper hand.

NY Times: “Battle Brewing Over Labeling of Genetically Modified Food”

Today’s New York Times includes an excellent story on the “Battle Brewing Over Labeling of Genetically Modified Food.”  As the article notes:

Regulators and many scientists say [GMO ingredients] pose no danger. But as Americans ask more pointed questions about what they are eating, popular suspicions about the health and environmental effects of biotechnology are fueling a movement to require that food from genetically modified crops be labeled, if not eliminated.

Although GMO labeling bills are percolating in several state legislatures,  the most significant “battle” is the upcoming ballot initative in California, discussed in a prior post.  Significantly:

Biotechnology companies say that the California labeling initiative, while portrayed as promoting consumer choice, is really an effort by some consumer and environmental groups and organic food growers to drive genetically modified foods off the market.

“These folks are trying to use politics to do what they can’t accomplish at the supermarket, which is increase market share,” said Cathleen Enright, an executive vice president at the Biotechnology Industry Organization, which represents Monsanto and DuPont.

Persons on the other side of the issue, of course, assert that they just want “transparency” in the food system in light of potential health and environmental concerns. 

Please see the complete article here.

UPDATE: Initial Decision in FTC v. POM Wonderful is Mixed Bag for Both Sides

Decision day has come in FTC v. POM Wonderful (see prior post here) and both sides have claimed victory.  On May 21st, the FTC published the “initial” 335-page decision by FTC Administrative Law Judge (“ALJ”) D. Michael Chappell.   For POM, along with many food and supplement companies, the decision was good news because the ALJ rejected the FTC’s most strident and overreaching positions.  On the other hand, the ALJ found that POM violated the FTC Act by making misleading health claims.

The crux of the FTC’s Complaint was that POM disseminated false and misleading advertising and promotional materials representing (mostly by implication) that “clinical studies, research, and/or trials prove” that consuming certain POM products (POM Juice, POMx Pills, and POMx Liquid) “prevents or reduces the risk of” or “treats” heart disease, prostate cancer or erectile dysfunction.

In his decision, the ALJ squarely rejected the FTC’s contention that  randomized, double-blind, placebo-controlled human clinical trials (“RCTs”) were necessarily required.  Rather, “the appropriate level of substantiation is determined by what the evidence shows that experts in the relevant field would deem adequate.”   The ALJ thus basically agreed with POM’s position that, in addition to “gold standard” RCTs — which can be very costly — “basic science” and  “pilot” studies could also be considered, with basic science referring to test-tube (in vitro) studies, in vivo animal studies, and pre-clinical research.

Under this standard, the ALJ found that the claims that the POM Products could “support prostate health” and “promote erectile health” could be supported.  But he found that the claims that the POM Products could prevent, treat or reduce the risk of prostate cancer, erectile dysfunction and heart disease were not supported by scientific evidence and that they therefore violated the FTC Act.  In other words, he held that POM’s structure/function claims were supported and not misleading, but its health claims and/or qualified health claims were deceptive.

Finally, the ALJ rejected the FTC’s request that POM obtain pre-approval from the FDA for any future health claims as being “unsupported by governing precedent.”   The FTC sought a pre-approval requirement to create a “clear and precise” bright-line rule to eliminate any confusion or ambiguities.   As the ALJ observed, “neither FDA pre-approval, nor FDA standards for obtaining such approval, constitutes the required level of substantiation under the FTC Act or applicable case law.”

On its website, POM claimed victory:

“Through its lawsuit against POM, the FTC tried to create a new, stricter industry standard, similar to that required for pharmaceuticals, for marketing the health benefits inherent in safe food and natural food-based products.  They failed,” explained Craig Cooper, Chief Legal Officer for POM Wonderful LLC.  “While we are still analyzing the ruling, it is clear that we will be able to continue to promote the health benefits of our safe, food products without having our advertisements, marketing or public relations efforts preapproved by the FDA and without having to rely on double-blind, randomized, placebo-controlled studies, the standard required for pharmaceuticals. We consider this not only to be a huge win for us, but for the natural food products industry.”

Likewise, the FTC issued a statement touting that the ALJ upheld the FTC’s Complaint that “POM deceptively advertised its products as treating, preventing, or reducing the risk of heart disease, prostate cancer, and erectile dysfunction.”

It is expected that both the prosecuting arm of the FTC and POM will seek review of the decision by the full Federal Trade Commission and, of course, there may be further appeals to the U.S Court of Appeals.

This decision is most significant in its implicit recognition that companies selling food products that are unquestionably safe have the right to engage in commercial speech to inform consumers about the qualities of those products without government constraints such as FDA pre-approval or a requirement of double-blind, randomized placebo-controlled clinical trials.

Finally, it is worth noting that the claims held to be misleading were primarily found to have been health claims by implication.   As the ALJ observed with regard to POM’s heart disease claims:

The evidence shows that [POM] disseminated advertisements that impliedly represented that the POM Products treat, prevent, or reduce the risk of heart disease and, in many of these same advertisements, are clinically proven to do so, by lowering blood pressure, reducing arterial plaque, and/or increasing blood flow to the heart. [POM] made these claims indirectly and obliquely, typically by presenting, through words and images, a logical syllogism that: free radicals cause or contribute to heart disease; the POM Products contain antioxidants that neutralize free radicals; and, therefore, the POM Products are effective for heart disease.   Against this background, many of the advertisements further state or represent that the POM Products have been shown in one or more clinical, medical, or scientific studies, to reduce plaque, lower blood pressure, and/or improve blood flow to the heart, in a context where it is readily inferable that the referenced study results involve heart disease risk factors and, therefore, constitute clinical support for the effectiveness claim.

UPDATE: Some Claims Dismissed, But General Mills Must Defend “Made With Real Fruit” Statement

A recent post discussed the pending class action suit over General Mills’ Fruit Snacks.  A District Court judge in the Northern District of California has now ruled on General Mills’ Motion to Dismiss that lawsuit and dismissed with prejudice plaintiff’s claims to the extent they are based on statements that Fruit Snacks are “fruit flavored,” “naturally flavored,” and “gluten free.”  The Court let the lawsuit proceed, however, with regard to the statement “Made with Real Fruit.”  See complete Opinion here.

Specifically, the Court agreed with General Mills that any claim based on “fruit flavored” and “naturally flavored” is preempted by the Nutrition Labeling and Education Act (“NLEA”) and, more specifically, the FDA labeling requirements promulgated under 21 U.S.C. § 343(k).  In discussing the relevant labeling requirements – 21 C.F.R § 101.22(i) – the Court stated:

[T]he regulation allows a producer to label a product as”natural strawberry flavored,” even if that product contains no strawberries.  While the regulation’s logic is troubling, the Court is bound to apply it.

Turning to the “gluten free” claim:

 [T]he Court [found] that the statement “gluten free” cannot support Plaintiff’s claims under [California’s unfair business practices and false advertising laws].  The statement is objectively true and communicates nothing more than the absence of gluten in the product — a message used to convey the suitability of the Fruit Snacks to consumers with celiac disease and others who may wish to avoid gluten.  A reasonable consumer is unlikely to interpret the statement  “gluten free” to mean that the Fruit Snacks contain no partially hydrogenated oils, low amounts of sugar or corn-syrup, or that the Fruit Snacks are otherwise healthful.

The Court had a different view, however, of the “made with real fruit” claim.  Plaintiff  alleged that the statement “made with real fruit” incorrectly describes the ingredients, which include partially hydrogenated oil, sugars in quantities amounting to approximately half of each serving and “pears from concentrate” rather than the fruit indicated by the name of the product.  For example, strawberry-flavored Fruit Roll-Ups contain no strawberries.

A reasonable consumer might make certain assumptions about the type and quantity of fruit in the Fruit Snacks based on the statement “made with real fruit,” along with other statements prominently featured on the products’ packaging.  For example, the statement “made with real fruit” appears in large and colorful letters on the side panel of the packaging of strawberry Fruit Roll-Ups.  Additionally, the word “strawberry” appears in large letters on the front, back, top, and bottom panels.  Taken together, these statements might lead a reasonable consumer to believe that product is made with real strawberries, not pears from concentrate.  The names “Fruit Roll-Ups” and “Fruit by the Foot,” along with the fanciful depiction of the products, which resemble fruit leather, may lead to further confusion about the Fruit Snacks’ ingredients.  After seeing these prominent aspects of the packaging, a reasonable consumer might be surprised to learn that a substantial portion of each serving of the Fruit Snacks consists of partially hydrogenated oil and sugars.

On the one hand, the rejection of certain statements by the Court  takes away some of plaintiff’s “ammunition” for arguing that the overall product labeling was deceptive to reasonable consumers.   On the other hand, the Court views the “Made with Real Fruit” statement, in combination with other aspects of the packaging, as more than sufficient for the jury to consider at trial.  It will be interesting to see how this case proceeds and how this ruling might impact any potential settlement discussions.

Food Manufacturing Editorial — Don’t Run from GMO Labeling

The May 2012 issue of Food Manufacturing magazine includes a nice editorial called The Public’s “Right to Know” which proposes that food companies should not run away from legislative efforts to mandate GMO labeling.   The editorial does not address the over-the-top measure proposed in the California ballot initiative (discussed in my prior post here), but instead focuses on legislative efforts in states like Vermont and Connecticut.  The key point is that food companies should disclose their use of GMO ingredients while simultaneously providing information on why those ingredients are being used.

The food industry would be wise to educate consumers about the benefits of GMOs instead of blocking the public’s access to information.  ….  [T]he industry is armed with data of its own, including the fact that rising food costs are mitigated by high-yield GMOs.  Additionally, in a world plagued by food insecurity, GMOs may well be vital in attaining a dependable food supply in developing nations.

Arming consumers with the information they need to make educated decisions about the foods they choose to buy could change the direction of this conversation.  If the food industry pushes too hard against public disclosure, consumers could come to believe that it has something to hide.

This is a fair point.  There are many facets to this debate but the current discussion is dominated by consumer groups with a particular agenda that are very savvy at using social media.  To combat the potential spread of misinformation and level the debate, the food industry must do more to educate the public on the nature of GMO ingredients (including the latest findings on health and environmental concerns) and the reasons why some GMO ingredients are used for certain products.  That is not to say that GMO labeling should be required, especially to the extent such labeling creates a stigma that equates GMO ingredients with saturated fats or added sugars.  But it will certainly be a reality if the public discourse (as opposed to behind-the-scenes lobbying) is a one-sided discussion.

Sixth Circuit Uphold’s Trademark Protection for Maker’s Mark Red Dripping Wax Seal

In an Opinion issued today, the Sixth Circuit affirmed that (1) Maker’s Mark’s registered trademark for its red dripping wax seal is not “aesthetically
functional” and is thus a protectable mark, and (2) Casa Cuervo, S.A. de C.V.’s Reserva de la Familia tequila infinged that mark by using red dripping wax seals on their bottles that created a likelihood of consumer confusion. 

from tequila.net

After observing that Marker’s Mark’s red dripping wax seal is “its signature trade dress element,” the Six Circuit held that this design element is not aesthetically functional because there are comparable alternatives for sealing a bottle and protecting the mark does not put other manufacturers at a competitive disadvantage in the market place.  As for trademark infringement, the Sixth Circuit noted that this case involved “confusion of sponsorship” and that the factors for determining the likelihood of consumer confusion weighed in favor of Marker’s Mark, especially the strength of the mark and the similarity of Cuervo’s red dripping wax seal.   You can read the complete Opinion here. 

This ruling highlights that design elements can be an important (and even iconic) part of a product’s brand image and diligent companies can, through advertising and exclusivity, create protectable trade dress rights in those elements that will be protected by the Courts.   Here, Maker’s Mark succeeded by recognizing the important relationship beween its dripping, red wax seal and the public image of its product, and then taking all necessary steps to promote and protect that image.