Monthly Archives: August 2012

U.S. Asks Supreme Court Not To Hear Monsanto Seed Patent Case

The U.S. Solicitor General has recommended that the U.S. Supreme Court not hear a case over whether the doctrine of patent exhaustion applies to Monsanto Co.’s  herbicide-resistant Roundup Ready soybean seeds.  A lower court held that farmer Vernon Bowman infringed the patents on the seeds through a “second planting” using so-called “commodity seed” obtained from local grain elevators.  Bowman contends that his purchase of Monsanto seeds was an authorized sale and that Monsanto’s claims are thus precluded under the doctrine of patent exhaustion which provides that a patent holder cannot control a patented product after the first authorized sale.

Significantly, the seeds Bowman purchased were subject to a Technology Agreement in which licensed growers agreed: (1) “to use the seed containing Monsanto gene technologies for planting a commercial crop only in a single season”; (2) “to not supply any of this seed to any other person or entity for planting”; (3) “to not save any crop produced from this seed for replanting, or supply saved seed to anyone for replanting”; and (4) “to not use this seed or provide it to anyone for crop breeding, research, generation of herbicide registration data, or seed production.”  Although licensees could sell seed to grain elevators for commodity use such as cattle feed, it excluded replanting.

But in light of recent Supreme Court law on this subject — most notably Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008) — Bowman argued that “[s]ales of second-generation seeds by growers to grain elevators, and then from grain elevators to purchasers (like Bowman) are authorized … and are thus exhausting sales….”

In a brief filed Aug. 24, U.S. Solicitor General Donald Verrilli argues that the Federal Circuit correctly held that the exhaustion doctrine is of no consequence because, even if Bowman’s purchase was an “authorized first sale,” Bowman created new seeds when he planted them: “[O]nce a grower … plants the commodity seeds containing [Monsanto’s] Roundup Ready technology and the next generation of seed develops, the grower has created a newly infringing article.”   The Solicitor further notes that the lower court properly rejected the argument that replanting was the only use for the “commodity seed,” noting that the seed was useful for, among other things,  animal feed.   Finally, the brief notes that the patent-exhaustion doctrine still applies to self-replicating technology like seeds and that, after an authorized sale, Monsanto lost the right to control the use of the seed.   Nevertheless, it still holds the exclusive right to make the seeds.

 

 

CSPI v. Welch Foods

The Center for Science in the Public Interest (“CSPI”) continues its attacks on allegedly misleading food labels continues.  On August 14, 2012, CSPI declared that it had “Whack[ed] Welch’s Over Deceptive Health Claims” in reference to a “demand letter” to Welch Foods which asserts that various heart-healthy claims  were “deceptive and misleading.”  Specifically, CSPI contends that:

  1. claims that Welch’s 100% Fruit Juice product line is heart-healthy and may promote overall health are “deceptive and misleading because [these]  products may instead decrease overall health by  contributing to insulin resistance and obesity, and may thus promote heart disease and diabetes”;
  2. the claim that Welch’s Fruit Snacks, Fruit Juice Cocktails, Spreads, and 100% Fruit Juice drinks “Reward Your Heart” and are heart-healthy products is “unlawful because it is a claim of heart disease prevention, it lacks substantiation, and it is deceptive”; and
  3. claims that Welch’s Fruit Snacks products are nutritious and healthful to consume are “deceptive and misleading because … Welch’s Fruit Snacks contain added sugars and artificial food dyes, lack significant amounts of real fruit, and contain no dietary fiber.”

CSPI argues that these “claims violate state consumer protection laws such as Massachusetts G.L. c. 93A, Texas Business & Professions Code § 17.41 et seq., District of Columbia Code § 28-3905 et seq., New Jersey Statutes Ann. 56:8-1 et seq., California Business & Professions Code §§ 17200 & 17500, and California Civil Code §§ 1770(a)(5) & 1770(a)(14).”   Accordingly, CSPI states that Welch Foods will face a lawsuit unless it stops making heart-health claims for the above-named products.

The same day, Welch Foods issued a response stating, in relevant part:

[That] the substantial body of research conducted over a 15-year period supports the cardiovascular benefits of 100% grape juice made with Concord grapes, including many placebo controlled, human studies.    In addition, a recent comprehensive review of the science published in Nutrition Today concluded that consuming grapes and grape juice can support cardiovascular health without adversely affecting weight in healthy adults.

Contrary to CSPI’s view on the role of 100% fruit juice, the United States … Department of Health and Human Services 2010 Dietary Guidelines for Americans… say that 100% juice is one way to add more fruit to the diet as a complement to whole fruit intake.

Furthermore, equating the nutritional value of 100% grape juice to soft drinks is not only misleading but potentially harmful to the public.  Calorie for calorie, 100% grape juice packs more nutrition than soft drinks and delivers essential vitamins, minerals, and beneficial plant nutrients – to help promote health.

Welch’s declined to provide further comment in light of the potential litigation but cited numerous studies that it said supported its claims.

Notably, CSPI’s first and second arguments recall the on-going POM Wonderful  dispute with the FTC in which POM argues, among other things, that it has a First Amendment right to communicate the results of ongoing studies and that its 100% juice products are undeniably healthy.

Here, CSPI criticizes the fact that Welch Foods “highlights the antioxidant content of its 100% Grape Juices and fruit blends” because the claimed benefits are not based on “competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence….”  CSPI further argues that any health benefits are offset by the negative effects of the juice’s sugar and calorie content.  Although I cannot comment on the scientific studies cited by both sides, I do question CSPI’s attacks on the communication of health-related information in the promotion of a 100% juice product.  Under the CSPI’s view, it appears that almost any such communication would be an implied health claim that must be supported by the most stringent scientific studies and that, regardless, any claim (whether implied or not) could not be made if there are potentially offsetting factors (e.g., sugars and calories).   If the CSPI’s goal is to improve nutrition and public health, then its approach to this complex issue is too draconian and 100% juice should not so easily be equated with soda.

Lawyers From Suits Against Big Tobacco Target Food Makers

 

The New York Times has an excellent article on some of the lawyers who are filing suits against the food industry after having success with similar suits against big tobacco.  The following cuts to the heart of the matter and relates to many of the posts from this blog:

More than a dozen lawyers who took on the tobacco companies have filed 25 cases against industry players like ConAgra Foods, PepsiCo, Heinz, General Mills and Chobani that stock pantry shelves and refrigerators across America.   The suits, filed over the last four months, assert that food makers are misleading consumers and violating federal regulations by wrongly labeling products and ingredients.  While there has been a barrage of litigation against the industry in recent years, the tobacco lawyers are moving particularly aggressively.  ….

“It’s a crime — and that makes it a crime to sell it,” said Mr. Barrett, citing what he contends is the mislabeling of those products. “That means these products should be taken off the shelves.”

Please read the entire article here.

 

ConAgra Sued for False Advertising Over Parkay Spray butter substitute

A woman has filed a complaint against ConAgra Foods in U.S. District Court for the District of Nebraska and, as always, is seeking class action certification.  Plaintiff alleges that, although ConAgra’s Parkay Spray butter substitute is advertised as “fat free” and “calorie free,” it “contains 832 calories and 93 grams of fat per bottle.”  According to the Parkay website, the “Servings Per Container” on the bottle’s Nutrition Facts panel is “about 226 sprays” with a serving size being 5 sprays.  Plaintiff, however, alleges that these “product labels include artificially small ‘serving sizes’ that fail to account for the manner in which these products are customarily consumed.”  ConAgra’s advertisements are thus false because, according to the Complaint, the product “contains ingredients that are fats which, even in small quantities, add trivial amounts of fat per serving.”

Notably, plaintiff alleges that ConAgra’s labeling directly violates the FDA’s regulatory scheme by providing a smaller “serving size” than the amount of food “customarily consumed at one eating occasion” based on “consumption data under actual conditions of use” as required under C.F.R. §§101.9(b)(1).  Based on that contention, Plaintiff further alleges that ConAgra “made unlawful ‘fat free’ and ‘calorie free’ nutrient content claims” because a “product that uses unlawful serving sizes cannot claim to be ‘fat free’ or ‘calorie free.’  21 C.F.R. §101.62(a)(3); 21 C.F.R. §101.60)a)(3).”

Finally, Plaintiff alleges that Con Agra was aware that its Parkay Spray was mislabeled based on consumer complaints and an FDA guidance letter from March 2005 that “reminded” the food industry about the importance of accurately determining proper serving sizes for their products.  The Complaint includes eight different claims with the primary claims alleging violations of Nebraska’s Consumer Protection Act and Uniform Deceptive Trade Practices Act.  See the entire Complaint here.

This will be an interesting case to watch because Plaintiff cannot prevail  if ConAgra shows that it properly complied with FDA regulations on calculating serving size.

FDA’s Public Comment Period Ends for Study on Nutrition Facts Footnotes and “Added Sugar” Labeling

On May 31, 2012, the FDA announced that it was seeking public comment on a potential “Experimental Study on Consumer Responses to Nutrition Facts Labels With Various Footnote Formats and Declaration of Amount of Added Sugars.”  The “footnote formats” generally relates to exploring “consumer responses to various food label formats for the footnote area of the Nutrition Facts label, including those that exhibit information such as various definitions for percent Daily Value, a succinct statement about daily caloric intake, and general guidelines for high and low nutrient levels.”

Groups supporting the study include the American Heart Association, the Center for Science in the Public Interest (“CSPI”), and the Rudd Center for Food Policy & Obesity at Yale University.  Their comments included the following:

  • American Heart Association:  “While ‘sugars’ is listed, the Nutrition Facts label does not distinguish between naturally occurring sugars such as those found in fruit or milk, which are associated with other important components inherent to foods such as vitamins and minerals, and added sugars, which are not.”
  • Rudd Center:  “The Rudd Center suggests testing more succinct statements for recommended caloric intake, including statements of calorie ranges and alternative types of statements indicating that calorie requirements change with age, height, and activity level, and statements suggesting consumers check their own caloric needs on a government run website.”  Further, “including added sugar and naturally occurring sugar on the Nutrition Facts Panel under total sugar would increase consumer understanding of products’ nutritional attributes and healthfulness. Consumers are used to seeing subcategories under total fat (i.e., saturated fat, trans fat), so this would be in line with current understanding and increase comprehension of the additional information.”
  • CSPI:  Besides supporting the proposed study, “CSPI urges FDA also to evaluate the effects of labels that show only added sugars and juice sugars.  While CSPI … supports the idea of a Nutrition Facts label that lists added sugars (and juice sugars) instead of total sugars and urges FDA to test such labels, at a minimum Nutrition Facts labels should distinguish between added sugars that consumers should limit (caloric sweeteners and juice sugars) and sugars that occur naturally in milk, fruit, or vegetables.”  Even if some sugars are chemically identical, “fruits, vegetables, and low-fat dairy foods may help prevent heart disease, stroke, osteoporosis, and other diseases.  In contrast, soft drinks, fruit drinks, bakes sweet, candy, and other sources of added sugars … may increase the risk of disease, either by adding sugars to the diet or by displacing more nutritious foods from the diet.”  CSPI’s preferred Nutrition Facts label is set forth below.

Groups  opposing the study include the American Bakers Association, the Independent Bakers Association, the American Beverage Association, the International Dairy Foods Association, the National Dairy Council, the National Milk Producers Federation, the National Confectioners Association, Ocean Spray Cranberries and the Sugar Association.   Reasons provided  in opposition to the study included the following:

  • Ocean Spray Cranberries, Inc.:  “Ocean Spray’s opposition is threefold: (1) we believe that the focus on added sugars, as opposed to total sugars, is misplaced, (2) the focus on added sugar disproportionally impacts cranberry products, which require sweetening to be palatable, and (3) the FDA lacks authority to require the declaration of added sugars as the FDA has no means of testing for enforcement of an added sugar declaration without requiring access to proprietary formulas.”
  • National Dairy Council:  “[C]urrent food labels provide information about the amount of total sugars on the Nutrition Facts label and the names of added sugars on the Ingredients Panel. Nutrient content claims, such as reduced sugar, sugar free or no added sugar, may also be present.  Consumer research to date indicates that consumer judgments about the nutritional attributes and overall healthfulness of foods and beverages can be impacted by information currently on foods labels. A review of the current research indicates potential for consumer confusion and unintended consequences from declaration of added sugars on the Nutrition Facts label.”
  • American Beverage Association:  “Although ABA supports FDA efforts to research the ways in which consumers use and understand the Nutrition Facts label, ABA continues to believe that the proposed study’s review of an added sugars declaration is wholly unnecessary and lacks practical utility for a variety of reasons.  First, FDA itself has repeatedly taken the science-based position that there is no need for a mandatory disclosure of added sugars since the body does not distinguish between added sugars and those naturally occurring in food.  FDA has also expressly acknowledged that an added sugars declaration would be ‘unenforceable’ since the agency would be unable to determine, for many products, the accuracy of any such label declarations. ….  Moreover, … it is well-established that added sugars are not uniquely linked to the problem of obesity [and a] misplaced focus on added sugars would only detract from the importance of total calories as the crucial piece of information necessary to inform consumers of the relationship between food intake and weight management.   Finally, … the proposed study contains a number of methodological and other flaws and may not produce reliable information on added sugars labeling.”

See all the comments here. 

My Article in Packaging Digest on Potential Impact of California GMO Labeling Ballot Initiative

Please see my feature article in the August 2012 issue of Packaging Digest on the “extreme” labeling requirements that might result if California voters approve Proposition 37, also known as the “California Right to Know Genetically Engineered Food Act.”

In related news, various entities are awakening to the fact that the language of Prop. 37 could potentially be read as precluding any “processed food” from being labeled or advertised as “natural,” “all natural,” or “naturally made” regardless of whether it includes GMO ingredients.  See here and here.  In fact, the Legislative Analyst’s Office of California, a non-partisan fiscal and policy advisor, specifically found that, “[g]iven the way the measure is written, there is a possibility that these restrictions  [on “natural” labeling and advertising] would be interpreted by the courts to apply to all processed foods regardless of whether they are genetically engineered.”  See here.  Expect this issue to be the subject of much more discussion as the election approaches.

My Article in Food Processing Magazine: “Nutella Lawsuit Highlights Marketing Risks”

Please see my article from the August issue of Food Processing magazine:  Nutella Lawsuit Highlights Marketing Risks.