Monthly Archives: July 2012

New Lawsuit Targets “Natural” Labeling of General Mills’ Nature Valley Products

Once again, consumer activists  (or concerned mothers) are using litigation to highlight allegedly “deceptive” labeling practices.  With the assistance of the  Center for Science in the Public Interest (CSPI), whose attorneys are acting as co-counsel, two individual plaintiffs are accusing General Mills of deceptively “marketing its Nature Valley products as ‘Natural’ when they contain non-natural, highly processed ingredients such as high fructose corn syrup (HFCS), high maltose corn syrup (HMCS), and maltodextrin and rice maltodextrin.”  As always, plaintiffs are seeking certification to proceed as a class action.  A copy of the Complaint can be found here:

According to Michael F. Jacobson, executive director of the CSPI, “High maltose corn syrup and maltodextrin are highly processed, do not exist in nature and not even under the most elastic possible definition could they be considered ‘natural.'”  Significantly, a CSPI press release goes so far as to complain about the imagery used in marketing the Nature Valley granola bars: “Nature Valley’s web and social media presence surrounds itself with images of forests, mountains, lakes, deserts, beaches, and other natural imagery, and shows hikers, backpackers, and divers eating the products.”  Such allegations are commonly used to bolster the contention that consumers are being misled about the purity and/or source of the product’s ingredients.

In an interesting twist, however, one of the plaintiffs also contends that they sought out “all natural” products based on medical advice and believed that avoiding artificial dyes, sweeteners, or additives would help her daughter, who had been diagnosed with early onset bipolar disease, attention deficit/ hyperactivity disorder, obsessive-compulsive disorder and anxiety.

Jack Daniel’s Cease and Desist Letter: A Thoughtful Approach For Dealing With Trademark Infringers

There has been a lot of publicity surrounding Jack Daniel’s “cease and desist” letter to Patrick Wensink, the author of a book titled “Broken Piano For President” that features a cover that mirrors Jack Daniel’s famous label.  As Businessweek reports:

[I]nstead of asking Wensink to immediately change the cover, the company said it was “flattered” by the imitation and asked only that a new cover be commissioned if the book is reprinted.  “If you would be willing to change the design sooner than that,” Jack Daniel’s wrote in its letter, “we would be willing to contribute a reasonable amount toward the cost of doing so.”  Companies rarely treat trademark violators this kindly.

The main message of the Businessweek article, which includes a Q&A with a Jack Daniel’s attorney, is that Jack Daniel’s treats many infringers “with respect” and without draconian demands when the infringement is non-competitive and results in minimal harm.  This smart approach recognizes that many infringers are actually big supporters of the brand and that vitriolic cease and desist letters can create backlash that, in the aggregate, might weaken the brand overall.

Feud Over CUTIES Trademark the Subject of Pending Arbitration

One of the best examples of successfully branding produce is CUTIES brand clementines and mandarins.  That valuable trademark — with approximately $300 million in sales over the past decade — is co-owned by Sun Pacific and Paramount Citrus.  Excellent articles in The Packer and Wall Street Journal detail a feud between the co-owners.

The most publicized aspect of that dispute is the result of Sun Pacific sub-licensing rights in the CUTIES trademark to its wholly-owned subsidiary Califia Farms LP in connection with the sale and marketing of bottled juice.  That action ultimately triggered a March 2012 complaint filed by Paramount Citrus against Califia Farms based on the contention that certain conditions attached to Paramount Citrus’ initial consent to that sublicense had not been met and therefore continued use of the CUTIES mark by Califia Farms constituted trademark infringement.  A copy of that Complaint can be found here.

Califia Farms countered by filing a motion to compel arbitration of the dispute based on a broad arbitration provision in a 2008 Master Agreement signed by Sun Pacific and Paramount Citrus.  In April 2012, presumably in light of the motion to compel, Paramount Citrus voluntarily dismissed its complaint without prejudice and the dispute is now part of a larger proceeding before the American Arbitration Association.

According to the Wall Street Journal, the trademark dispute is part of a larger and long-simmering disagreement between Sun Pacific, held by Berne Evans III, and Paramount Citrus, a unit of Roll Global LLC  (along with Fiji Water and POM Wonderful) which is closely held by Stuart and Lynda Resnick.  The Wall Street Journal notes that a key disagreement centers on escalating advertising costs resulting from an aggressive marketing strategy by the Resnicks but opposed by Evans.  According to Evans, “advertising expenses [have risen] to 26 cents per box of Cuties in the latest season, up from 8 cents a few years ago.”  Mr. Evans also “hired a high-powered consulting firm to help evaluate the group’s advertising costs” and they “concluded that the group was actually losing money on the campaign” despite a dramatic increase in sales.

On the other hand:

Adding to the tension is an idea Mr. Evans hatched after a freeze forced some of the fruit to mature smaller.  Mr. Evans devised “Baby Cuties,” as a trademark with a logo that mimics the original Cuties (a smiling tangerine with an open zipper on the peel) wearing a bonnet and with a pacifier in its mouth. Selling the fruit exclusively at Wal-Mart Stores, the group made an “extra $2 or $3 million,” Mr. Evans says, a better profit than turning them into juice.  The Resnicks didn’t approve of the Baby Cuties, according to Mr. Evans and other citrus growers, out of concern it would undercut the main brand.

These other disputes are also evidently part of the pending arbitration.  Moreover, the 2008 Master Agreement expires in 2014 so all of the foregoing are likely part of the complicated negotiations for what has, to date, been an extremely beneficial relationship.

See the Wall Street Journal’s article here and The Packer’s article here.

FoodNavigator: “Is Food Industry Under Attack from an NGO-Media Complex?”

A thought-provoking article on www.foodnavigator-usa.com asks the question: “Is the food industry under attack from an NGO / media complex.”  The article discusses Jon Entine’s presentation at the IFT show in Las Vegas last month where he argued that NGO’s (non-governmental organizations) and advocacy groups often “lead rather than follow the consumer.”   According to FoodNavigator, Entine proposed that this “NGO-media complex” has “a tendency to hijack debates over areas of the food industry where there is a perceived risk to consumers.”  Specifically, they have a strong presence on the internet and frequently cultivate strong relationships with the media, meaning that “narrow voices representing probably less than 5-10% of the population become much louder.”  One problem with this imbalance is that it can skew the perception of regulators who might mistake perception for reality.

Putting aside the existence of any coherent “NGO-media complex,” it’s difficult to argue against the proposition that various advocacy groups have dominated the internet “conversation” on issues like GMO’s.  Please read the complete article here.

Craft Brewers Settle “Idiot” Trademark Dispute

Two months after Coronado Brewing Co. filed a Complaint for trademark infringement against Elysian Brewing Co., the two companies have formally settled their dispute.  Coronado operates microbreweries and brewpubs in California and is the owner of a U.S. trademark registration for “IDIOT” in connection with beer and related beverages.  One of the beers sold in connection with its IDIOT mark is an India pale ale.   The lawsuit was prompted by a new India pale ale from Elysian called “Idiot Sauvin.”  Coronado alleged that consumers were likely to believe that beers sold by Elysian under the “Idiot Sauvin” name were provided by, approved by, sponsored by, and/or affiliated with Coronado in light of its more senior and registered IDIOT trademark.

According to BeerPulse.com, the dispute has now been resolved, with one of Elysian’s co-founders stating:

I can say that we’ve agreed not to use the word Idiot in the future.  The beer in question will be called Savant. As we would with any of our colleagues in the craft brewing industry we will welcome our friends at Coronado to our local market, once they get here.  I doubt that we will be collaborating with them on any projects.

The court was formally informed of the settlement on 7/16/12.

Putting aside the merits of the allegations, this case highlights the importance of conducting trademark clearance when selecting a brand name for new products and before any marketing of the product.

USDA Streamlines Meat and Poultry Labeling Approval Process

The Food Safety and Inspection Service (FSIS) is the agency within the USDA responsible for the safety, labeling and packaging of the nation’s meat, poultry, and egg products.  In late May 2012, it launched a new web-based label approval system to streamline the review process for meat, poultry, and egg product labels.   Known as the “Label Submission Approval System (LSAS),” the web-based system will allow food manufacturers to submit label applications electronically, flag application submission errors, and will allow users to track the progress of their submission.

FSIS receives 150 to 200 label submissions daily, and it can take more than three weeks for a label to be reviewed.  According to the USDA, the new web-based system will make approved or corrected labels immediately available to companies, saving time and mailing costs.  The system also will allow companies to store labels and make changes electronically, removing the need to print and re-submit modified labels for review to FSIS each time a change is made.

More information about LSAS is available on the FSIS’ website here.

Is “Certified Organic” Label a Fraud?

The New York Times features a nice article titled, “Has ‘Organic’ Been Oversized.” It dispels the myth that organic foods are still mainly produced by small and independent companies, noting that “organic food has become a wildly lucrative business for Big Food and a premium-price-means-premium-profit section of the grocery store.”   It then raises the concern of whether “Big Food” is unduly influencing the meaning of “organic” through its presence on the National Organic Standards Board, which has increased the number of nonorganic materials approved for organic foods.

Initially, this list “was largely made up of things like baking soda, which is nonorganic but essential to making things like organic bread,” but “[t]oday, more than 250 nonorganic substances are on the list, up from 77 in 2002.”  Accordingly, Michael Potter, a founder of organic food producer Eden Foods, “calls the certified-organic label a fraud and refuses to put it on Eden’s products.”  On the other hand:

Kathleen Merrigan, a deputy secretary of agriculture, disputes that corporate interests are behind the increase in nonorganic materials deemed acceptable in “organic” food.  “The list is really very small,” says Ms. Merrigan.  “It’s really very simplistic and headline-grabbing to throw out those sorts of critiques, but when you get down into the details, there are usually very rational and important reasons for the actions the board has taken.”

See the full article here.