Proskauer on Advertising Law
Proskauer on Advertising Law

Sugar Rush: FDA Rejects Use of “Evaporated Cane Juice” to Describe Sweeteners

For years, food companies have been using the term “evaporated cane juice” in the ingredients list on food products. This has resulted in a number of lawsuits by consumers claiming that the term misled them into thinking those products did not contain sugar, including this failed putative class action against KIND.  In May 2016, the Food and Drug Administration (“FDA”) chimed in with guidance advising the food industry that the agency is not so sweet on the term “evaporated cane juice,” and that this term should not be used on food labels to describe sweeteners derived from the fluid extract of sugar cane (i.e. cane sugars or syrups).  According to the FDA, use of this term to describe sweeteners made from sugar cane is false and misleading, since it suggests that the sweetener is “juice” from fruits or vegetables, and does not reveal that the ingredient’s “basic nature and characterizing properties are those of a sugar.”  Instead, the FDA says, this ingredient should be “declared on food labels as ‘sugar,’ preceded by one or more truthful, non-misleading descriptors if the manufacturer so chooses (e.g., ‘cane sugar’).”

21 C.F.R. 101.4(a)(1) states that ingredients on food labels “shall be listed by common or usual name.”  The FDA determined that “evaporated cane juice” is not the common or usual name of any type of sweetener extracted from sugar cane.  The FDA’s definition of “juice” in the context of diet and nutrition includes only liquids or purees extracted from fruits and vegetables.  While acknowledging that sugar cane is technically a “member of the vegetable kingdom in the broad sense of classifying an article as ‘animal,’ ‘vegetable,’ or ‘mineral,’ FDA considers the term ‘vegetable’ in the context of the juice definition to refer more narrowly to edible plant parts that consumers are accustomed to eating as vegetables in their diet.  Sugar cane is not a vegetable in this sense.”  Therefore, liquid derived from sugar cane, similar to maple syrup or sorghum syrup, is not considered a “juice” under the FDA’s definition of the term, and should not be labeled as such.

In the same vein, sweeteners derived from sugar cane should not be included in the percentage juice declaration on the labels of beverages that claim to contain fruit or vegetable juice. For example, “FDA would consider a juice product sweetened with an ingredient derived from sugar cane and labeled as 100% fruit juice to be misbranded” since the product contains a non-juice sweetener in addition to the fruit juice.  FDA would also consider such a product to be adulterated because “sweetener has been substituted for part of the juice.”

While the FDA has determined that the “common or usual name for the ingredient currently labeled as ‘evaporated cane juice’ includes the term ‘sugar’ and does not include the term ‘juice’,” it has indicated that it would not object to the addition of non-misleading descriptors before the word “sugar.”  These descriptors can be used to distinguish sweeteners derived from sugar cane from other types of sugars or sweeteners on the market “by describing characteristics such as source, color, flavor, or crystal size.”  In addition, for companies that presently market foods with “evaporated cane juice” listed as an ingredient, the agency has indicated that it would not object to the use of stickers to change these labels to conform with this latest guidance, until the product’s next regularly scheduled label printing.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

FDA New-trition Rules

Last month, the FDA finalized amendments to the Nutrition Facts labeling rules for packaged foods and dietary supplements to reflect developments in nutrition science, including new scientific information regarding the link between diet and chronic diseases such as obesity and heart disease. Here are the highlights:

  • Nutrition Facts labels will no longer declare the “Calories from fat” because current science supports a view that, with respect to increased risk of chronic diseases, the type of fat is more relevant than overall total fat intake.
  • In addition to declaring “Total Sugars,” the labels must declare the gram amount of “Added Sugars” in a serving of a product directly below the “Total Sugars” on the label. The new regulations establish a Daily Reference Value and also require labels to declare the percent Daily Value for Added Sugars in the product serving. This amendment reflects scientific data showing that it is difficult to meet nutrient needs while staying within calorie limits if you consume more than 10% of your total daily calories from added sugar, and is consistent with the 2015–2020 Dietary Guidelines for Americans.
  • There are updates to the required listing of vitamins and minerals of public health significance. For instance, the final amendments require the declaration of vitamin D (which helps prevent osteoporosis, a highly prevalent disease in America) and potassium (which helps lower blood pressure and, like vitamin D, has low intake among some population groups). In contrast, the amendments permit, rather than require, the declaration of vitamins A and C because data indicate that those vitamin deficiencies are not common.
  • There are also updates to certain reference values used in the declaration of percent Daily Values of nutrients such as sodium, dietary fiber and vitamin D. The updates are based on scientific evidence from the Institute of Medicine and other reports such as the 2015 Dietary Guidelines Advisory Committee Report, which was used in developing the 2015–2020 Dietary Guidelines for Americans.
  • “Calories” must be formatted in larger typeface.
  • A footnote table listing reference values for certain nutrients for 2,000 and 2,500 calorie diets is no longer required because of evidence that it was confusing to consumers. The footnote will now be used to explain the meaning of “% Daily Value” in reference to a 2,000 calories-per-day diet.
  • The amendments require manufacturers to maintain records to support declarations of certain nutrients in specified circumstances where there are no analytical methods to verify the declared nutritional content. For example, manufacturers must maintain records to distinguish between dietary fiber and non-digestible carbohydrates, added and naturally occurring sugars, various forms of vitamin E, and folate and folic acid.

Additionally, in light of new research on consumption and consumer understanding of the Nutrition Facts label, the FDA also promulgated final amendments that redefine the size of a “single-serving” container, modify several “reference amounts customarily consumed” that are used to determine serving sizes, and require a dual-column labeling layout with “per serving” and “per package” Nutrition Facts for certain food packaging containing multiple servings.

The amendments are effective July 26, 2016. Manufacturers will be required to implement the new labels by July 26, 2018, although food makers with less than $10 million in annual sales will have an additional year to comply.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

 

“KIND” of Nutritious—FDA Permits “Healthy” Label and Agrees to Rethink Its Definition of “Healthy” Foods

The Food and Drug Administration has kindly permitted Kind LLC to use the term “healthy” on its snack bars again, but with the caveat that the term must only be used in text clearly presented as part of Kind’s corporate philosophy, and not as a claim about the products’ nutrient content.

In March 2015, the FDA issued a warning letter to Kind, concerning four of Kind’s snack bars which the FDA said were misbranded as “healthy.” According to the FDA, the Kind snack bars at issue, which contain fruits and nuts among other things, contain more fat and saturated fat than the FDA’s definition of “healthy” allows.  Moreover, the FDA said, the product labels claimed the bars were rich in antioxidants, had no trans fats, and were good sources of fiber without including certain necessary disclosures. The FDA says that after receiving this warning, Kind took corrective actions, including removing and amending certain nutritional content claims on its packaging and labeling. Kind then returned to the FDA to confirm that it was not barred from using the phrase “healthy and tasty” 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.”  The FDA agreed not only to this proposal, but also to reconsider how the agency defines “healthy” more generally in response to a citizen petition initiated by Kind in December 2015.

Kind’s citizen petition points out that the FDA’s definition of “healthy” is over 20 years old and excludes foods such as nuts, avocados, olives, and salmon, while embracing fat-free chocolate pudding and some sugary cereals. According to Kind, these outdated food labeling regulations focus on specific nutrient levels of proteins and fats rather than on the nutritional value of the whole foods. Kind therefore asked the FDA to update its existing food labeling requirements to be consistent with the 2010 Dietary Guidelines for Americans and the Scientific Report of the 2015 Dietary Guidelines Advisory Committee, and to amend the definition of “healthy” to emphasize the importance of overall nutrition quality of foods in their whole form rather than specific nutrient levels.  The FDA evidently did not think Kind’s arguments were entirely nutty and, in response, has indicated that it will soon be reexamining how it defines “healthy” food in light of evolving nutrition research, and will be seeking public comment on this issue.

For now, companies may be able to market their food products as part of a “healthy” corporate philosophy in the same manner that the FDA has sanctioned for Kind. But watch this space for more developments as the FDA rethinks what it means to eat healthy.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

Parks’ Allegations Against “Finest” Franks Not In the “Ball Park” of False Advertising Claims

On May 10, 2016, Judge Joseph F. Leeson, Jr. of the Eastern District of Pennsylvania granted summary judgment on false advertising and trademark claims in favor of defendant Tyson Foods, Inc. and a subsidiary, the makers of “Park’s Finest” frankfurters. The decision illustrates important distinctions between two causes of action—trademark infringement and false advertising—both covered by the same section of the same statute, the Lanham Act.

Defendants launched the “Park’s Finest” brand of super-premium frankfurters in February 2014, and according to marketing reports produced in discovery, that name was chosen to evoke an association with defendants’ existing “Ball Park”-brand beef hot dogs.

However, Plaintiff Parks, LLC, the owner of the “Parks” mark for sausages and other food products, took umbrage, and brought a Lanham Act suit against defendants that alleged both false advertising and trademark claims. According to plaintiff, the name of defendants’ product, “Park’s Finest,” was a literally false statement that misrepresented defendants’ products as products of plaintiff.

In granting defendants’ summary judgment motion in its entirety, the court found that plaintiff was barking up the wrong tree. The court began by explaining the difference between trademark infringement claims and false advertising claims.  Section 43(a) of the Lanham Act (codified at 15 U.S.C. § 1125(a)), prohibits “two major and distinct types” of conduct: false association and false advertising.  As the court explained, the prohibition on false association is implicated where a misrepresentation is likely to cause confusion as to the “affiliation, connection, or association of [a] person with another person, or as to the origin, sponsorship, or approval of his goods, services, or commercial activities by the person.”  15 U.S.C. § 1125(a)(1)(A).  The analytical framework for assessing false association claims is trademark law.  By contrast, the prohibition on false advertising is implicated when advertising or promotional activities misrepresent the “nature, characteristics, qualities, or geographic origin of [a person’s] goods, services, or commercial activities.”  15 U.S.C. § 1125(a)(1)(B).

The court observed that plaintiff’s so-called “false advertising” allegations—i.e., that the name “Park’s Finest” misrepresented defendants’ products to be plaintiff’s products—did not actually relate to the “nature, characteristics, qualities, or geographic origin” of the Park’s Finest products.  Instead, defendants’ use of the name “Park’s Finest” could deceive consumers only if it led them to believe that the product was associated with plaintiff Parks.  As such, Plaintiff’s allegations regarding defendants’ product name amounted to allegations of “false association,” not “false advertising,” and therefore the proper analytical framework was trademark law, not false advertising law.

In all events, the court concluded that plaintiff’s claim failed under a false advertising analysis. The court found that the product name “Park’s Finest” was not a literally false statement because literally false messages must be unambiguous, and the name “Park’s Finest” did not unambiguously refer to plaintiff’s mark.  Nor, the court found, could plaintiff make out a claim for impliedly false advertising because its consumer survey was flawed in three main respects, all of which stemmed from plaintiff’s effort to use the survey to pull “double-duty” to support both the false advertising and trademark claim.

First, the survey failed to ask participants about the message they received from the product and its packaging, and about the meaning of that message. Under Third Circuit law, a well-designed false advertising survey, once past the basic open ended questions, first asks “communication” questions to ascertain what messages the participant received and to “filter” or separate participants who received certain messages from those who did not.  A good survey then asks “comprehension” questions to determine what participants thought the message meant. The court found that plaintiff’s survey assessed whether consumers who simultaneously encounter the Park’s Finest and Parks breakfast sausage packages would be confused about their relationship to each other, but the survey failed to use “communication” questions, a “filter” and “comprehension” questions pertaining to the messages conveyed by Park’s Finest packaging on its own. Thus, the court held that although the survey may be “appropriate to assess the likelihood of confusion in connection with a trademark infringement claim,” it lacked the “appropriate methodology” to assess a false advertising claim.

The second flaw concerned “secondary meaning.” To support its purported “false advertising” claim, plaintiff would have had to show (1) that consumers associated “Parks” with plaintiff Parks, and (2) that consumers would also mistakenly associate defendants’ “Park’s Finest” name with plaintiff Parks.  The survey skipped the first step, inappropriately assuming that participants would associate “Parks” with the plaintiff.

Finally, the survey’s universe was inadequate. The population surveyed was limited to participants living in ZIP codes where plaintiff’s “Parks”-branded products were sold.  The appropriate survey population, however, was the broader intended audience for defendants’ Park’s Finest products.

For these reasons, the court granted defendants summary judgment on plaintiff’s false advertising claim. It also granted defendants summary judgment on plaintiff’s trademark claim, in part because plaintiff had not shown that “Parks” had secondary meaning for the relevant population, which was a necessary part of its trademark infringement claim.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

Supreme Court: Class Action Plaintiffs Must Show ‘Concrete’ Harm to Satisfy Article III

In a 6-2 decision, the Supreme Court, in an opinion authored by Justice Alito, held that the Ninth Circuit’s Article III standing analysis in Robins v. Spokeo was incomplete because it focused solely on whether the plaintiff had alleged a particularized injury, and failed to assess whether the alleged injury was “concrete”.  Although Spokeo was not a false advertising case, the majority’s decision may have ramifications in false advertising class actions.

Spokeo operates a website that allows users to search for information about individuals by inputting their name, email address or phone number. Spokeo searches a number of databases and returns information such as the individual’s address, phone number, marital status, approximate age, occupation, finances, shopping habits and musical preferences.  Spokeo’s profile for the plaintiff, Thomas Robins, stated that he was married, has children, is in his 50’s, has a job and is relatively affluent – none of which is correct, according to Robins.  Miffed, Robins sued Spokeo on behalf of himself and a purported class of similarly situated individuals for violating the Fair Credit Reporting Act (FCRA), which requires, among other things, that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy” of consumer reports.

The district court dismissed Robins’ complaint with prejudice, finding that he had not adequately pled an injury in fact under Article III. The Ninth Circuit reversed, citing its precedent and observing that “the violation of a statutory right is usually a sufficient injury in fact to confer standing.”  The Ninth Circuit concluded that Robins satisfied the injury in fact requirements of Article III because he alleged that “Spokeo violated his statutory rights, not just the statutory rights of other people,” and because Robins’ “personal interests in the handling of his credit information [were] individualized rather than collective.”  (Emphasis in original).

Justice Alito first reiterated, based on prior Supreme Court decisions, that to establish injury in fact, an injury both must be particularized, in that it affects the plaintiff in a personal and individual way, and concrete, in that it actually exists.  The Court concluded that the Ninth Circuit’s analysis improperly focused on the particularity requirement to the exclusion of the concreteness requirement.  Robins’ allegation that he suffered a violation of his statutory right went to particularity but not concreteness.  So, too, did the Ninth Circuit’s finding that the alleged FCRA violation implicated Robins’ personal interests in the handling of his credit information.

The Supreme Court elaborated that “a plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Justice Alito observed that if, for example, Spokeo had disseminated an inaccurate zip code, while this might amount to a technical violation of the FCRA it would be difficult to imagine such a violation resulting in any concrete harm.  Accordingly, the Court held, the Ninth Circuit should have considered whether the procedural violations of the FCRA alleged by Robins entailed a degree of risk sufficient to meet Article III’s concreteness requirement.

The “quick read” of Spokeo by some other commentators is that the decision’s practical impact will be minimal.  We are not so sure; we think Spokeo may have repercussions for false advertising class action litigants, especially in the Ninth Circuit where plaintiffs can no longer get away with pleading only a particularized injury.  As a result of this decision, class action plaintiffs may feel pressure to articulate a theory of concrete harm beyond the usual allegation that they would not have bought the product but for the alleged false representation (an allegation that, even if accepted as true at the pleading stage, does not necessarily reflect any concrete injury).  For their part, class action defendants should be on the lookout for situations where, despite having pled reliance on the alleged false representation, the plaintiff has not alleged, or cannot prove, that she or he suffered any concrete injury as a result of buying the product.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

The Promise & Peril of Comparative Advertising — Webinar Held on May 17

Comparative advertisements can be powerful drivers of consumer purchasing decisions. However, such ads are also highly unpopular with the competitor that is the subject of the comparison, and therefore are among the most frequently challenged advertisements both in Lanham Act false advertising suits and at NAD.

In this webinar, Proskauer partner Larry Weinstein discussed best practices for defending and challenging comparative advertisements, including:

  • The different standards Lanham Act courts and the NAD apply to comparative advertisements;
  • Proper and improper test methods for substantiating comparative advertising claims;
  • Avoiding bias in comparative testing;
  • Statistical methods applicable to comparative advertising claim substantiation studies; and
  • Common pitfalls that doom comparative advertising campaigns.

The FTC Trims the Fat Off Even More Companies Selling Weight Loss Products

Hungry to prevent more companies from selling allegedly bogus weight loss products, the FTC has settled yet another false advertising suit against various sellers of diet pills, in a case similar to February’s Sale Slash settlement blogged about here.  The FTC’s latest diet pill settlement enjoins distributors of the dietary supplement known as Pure Green Coffee from claiming, among other things, that any dietary supplement, food or drug causes or assists in causing weight loss or fat loss, unless such claims are not misleading and are substantiated by competent and reliable scientific evidence. Continue Reading

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