Essential Nutrition Law Blog

The Dietary Supplement Industry is Thriving, Especially in Utah, the "Silicon Valley" of the Industry.

David Pacheco — Tue, 01 Feb 2011 08:41:40 -0700

Despite the economy, the dietary supplement industry is thriving, writes Erik Krusch in a Westlaw Business article published today. Mr. Krusch reports on continued M&A and IPO activity in the industry in a time where the number of such deals in other industries has stayed low. As stated in the article, this data shows the resiliency of the industry and is proof of a strong market for dietary supplements, even in tough financial times.

The author also singles out Utah as a major factor in the industry's strength, call

ing Utah the "Silicon Valley" of the industry and citing Utah-based companies as the source of a fifth of all dietary supplement production in the U.S. Mr. Krusch identifies the state's friendly direct sales laws and support from Sen. Orrin Hatch as factors contributing to Utah's position in the industry. The Nutrition Law Blog authors, being based in Salt Lake City, can attest to the strength of the industry and the favorable business conditions in Utah.

This is, of course, great news for the industry, especially for the Utah companies.

It's Official: The Food Safety Modernization Act Is Law. What Food Companies Need to Do Right Now

David Pacheco — Wed, 05 Jan 2011 14:06:16 -0700

By Guest Blogger Kenneth Odza of the Food Liability Law Blog.

President Obama signed into law today the Food Safety Modernization Act (FSMA).

Companies with facilities subject to FDA jurisdiction should take immediate steps to review and, where necessary, modify SOPs, policies and procedures.

For example, given the FDA's expanded access to business records, companies should set SOPs that anticipate (before a crisis occurs) what records they may have to turn over and what they may not. Food companies should take steps to protect confidential and proprietary information.

Companies also should anticipate now how they need to change their policies and approaches to mandatory recalls and whistleblower protections.

These parts of the legislation take effect today:

Stronger records access authority by FDA (FSMA § 101)
- When FDA determines a "reasonable probability" of "serious adverse health consequences"
- FDA can access records of other food affected in a similar manner
- But FDA must show proper credentials and provide written notice

Mandatory recall authority (FSMA § 206)
- FDA can order a recall if it finds a "reasonable probability" that
  1. food is adulterated or misbranded; and
  2. there may be serious adverse health consequences
- FDA has to provide an opportunity for a voluntary recall
- FDA will provide an informal hearing within two days of the order’s issuance
Increased frequency of inspections (FSMA § 201)
- FDA will immediately increase the frequency of inspections
- FDA will apply a risk-based approach to determine priorities
Whistleblower protection (FSMA § 402)
- Protects employees who:
  - Provide information re violation of FDC Act ,
  - Testify, assist or participate in a proceeding re a violation, and/or
  - Object to "activity, policy, practice or assigned task" they "reasonably believe to be a violation"
Refused admission of imports if foreign facility refuses inspection (FSMA § 306)
- Foreign establishments must allow entry to U.S. inspectors within 24 hours of requesting entry
- Or imported food will be refused admission.

Future blog entries will discuss compliance with other provisions of the FSMA scheduled to be phased-in. If you are interested in a more detailed in-house discussion of the FSMA and its effect on your company, please let us know.

2010 Wrap-Up

David Pacheco — Fri, 31 Dec 2010 10:37:59 -0700

With 2011 nearly upon us, we have taken a look back at the news from 2010 and the posts from the inaugural year of the Essential Nutrition Law Blog and have created a list of what we feel were the top five news stories affecting the nutrition industry in 2010. Below are our choices, in no particular order. Feel free to weigh in in the comments.

1. Senator McCain’s “Dietary Supplement Safety Act”. We began the year with the threat of more stringent regulations for dietary supplement manufacturers under a bill backed by Senator McCain. The Senator backed away from the bill in March, much to the delight of Senator Orrin Hatch. This was, of course, great news for the industry.

2. Litigation for False Claims and Deceptive Advertising. We saw a number of high-profile cases in 2010 where companies were sued for false claims or deceptive advertising in connection with dietary supplements and functional foods. For example, Dannon will pay 66 million to settle a class action suit and an action brought by the attorneys general of 35 states, the FTC put an end to some claims regarding acai berries, consumers sued Coca-Cola for claims made related to Vitamin Water, and a U.S. Attorney in Wisconsin brought suit against Beehive Botanicals, resulting in federal officials seizing a number of products from the company.

3. The FDA begins enforcing GMP’s. In May, the FDA sent out its first warning letter related to a GMP inspection, indicating that the FDA is finally enforcing the GMP regulations first announced in 2007. For tips on preparing for a GMP inspection, read Jonathan Stagg's post here.

4. The November Elections. The November elections shook things up in Washington, especially in the House of Representatives, where we saw the largest shift in party control in over six decades. There has been much speculation over how this will affect legislation for the remainder of President Obama’s first term in office. In addition, most analysts predict that the results of the 2010 Census will likely favor Republicans. This change could obviously alter how the nutrition industry is perceived by federal lawmakers, and could affect legislative efforts like the Dietary Supplement Safety Act.

5. Passage of the Food Safety Bill. The year ended with the Senate passing the Food Safety Modernization Act which updates the food regulations that have been around for over 70 years. Assuming President Obama signs the Bill into law, it will bolster the FDA's ability to monitor food imports and will shift the regulatory focus to the prevention of contamination. The dietary supplement industry generally welcomes the update. For more in-depth coverage of the Food Safety Bill, visit the Food Liability Law Blog.

Dannon Forced to Open Wallet and Change Advertising (Again)

David Pacheco — Thu, 16 Dec 2010 11:10:31 -0700

The multinational food company Dannon agreed to a 45 million dollar class action settlement earlier this year based on consumer complaints about advertising claims regarding the health benefits of its probiotic line of dairy products. Now the company has entered into a $21 million dollar settlement with the attorneys general from 39 states. The L.A. Times reports that this is the largest-ever multistate attorney general consumer protection settlement with a food producer. The attorneys general alleged that Dannon made deceptive and unlawful claims in advertising which were not substantiated by competent and reliable scientific evidence at the time the claims were made. According to the allegations, the majority of scientific studies showed improvement in intestinal transit time when an individual consumed three servings of the probiotic products per day for two weeks, and did not support Dannon's advertised claims that one serving per day for two weeks improved digestive health. In addition, the attorneys general alleged that Dannon could not substantiate claims regarding improved immunity against the flu and common cold.

Dannon also agreed with the FTC to drop claims that the probiotic foods help prevent irregularity and offer protection against the flu and common cold. The FTC found no substantiation of these claims. This isn’t the first time Dannon has had to alter its advertising; the March settlement required Dannon to remove specific language about the health benefits of the products from labels and advertising.

Between this and the March settlement, Dannon has now agreed to pay $66 million as restitution for the misleading health claims, which comes out to about 1.3% of Dannon reported $5 billion in worldwide net sales of the probiotic line in 2009. This latest settlement should remind companies to keep state governments on the list of watchful eyes monitoring health claims related to food and supplement products.

New FTC "Green Guides" Are Out of the Gate

Joseph Eckhardt — Thu, 07 Oct 2010 11:11:47 -0700

Following several years of development, and much anticipation in recent months, the Federal Trade Commission has finally released “Proposed, Revised Green Guides.” The new Green Guides will be open for public comment until December 10, 2010. Thereafter, according to the agency’s press release, the FTC will determine if and how to issue the new Guides.

The proposed, revised Green Guides are summarized here and published with substantial analysis and comment here; the FTC invites submissions of public comments here.

The current official Green Guides, last updated in 1998, provide non-binding “interpretations” of federal consumer protection laws, including Section 5 of the FTC Act (15 U.S.C. § 45), which is the law that empowers the agency to punish deceptive practices. In general, the Guides establish that false or deceptive environmental marketing claims can be challenged under the FTC Act. The Green Guides also provide instruction and interpretations of marketing buzz words that were popular in 1998, such as “biodegradable,” “compostable,” “recyclable,” “refillable,” and “ozone safe.”

The proposed new Green Guides address the terms found in the 1998 edition, but also address several new issues that arise in present-day green marketing, including:

environmental seals of approval,
“free-of” and “non-toxic” claims,
carbon offsets,
claims concerning renewable energy, and
claims about renewable materials.

The proposed Green Guides reinforce and restate the FTC’s reasonable policy position that environmental marketing claims should be supported by credible scientific evidence. In addition, the proposed Guides expressly discourage sweeping unqualified claims. For example, the Guides explain that an unqualified claim that a product is “eco-friendly” is inherently deceptive. In contrast, a simple clarification – if it can be substantiated – may be acceptable. The proposed Guides state that a claim such as “eco-friendly: made with recycled materials” is not deceptive if the clarification is prominent, and can be proven.

For the most part, the proposed Green Guides do not represent a radical shift from the 1998 version of the Guides. And on a careful reading of the revised Guides and the preceding 186 pages of analysis and comment provided by the FTC, it’s clear that the fundamental issue is deception. It’s deceptive to say your product has 50% more recycled contents than it used to, when your product only increases recycled content from 2 to 3 percent. It’s deceptive to mark your product with your own green “seal of approval” and not disclose that you made up the seal yourself. It’s deceptive to claim that you’ll plant trees to offset carbon emissions from your products, when it will take 10 years for the trees to get big enough to actually offset those emissions.

Ultimately, it does not appear that the FTC is proposing a major shift in regulations. The key question for any environmental marketing claim remains: is the claim “deceptive” under Section 5 of the FTC Act? The bigger question is, how will enforcement change? Last February, The New York Times reported that the FTC has filed seven complaints concerning environmental marketing claims since President Obama took office (compared to zero during the prior administration). If enforcement remains at that level, there cannot be substantial application of the new Green Guides. Then again, given the rapid growth of environmental marketing claims in recent years, the FTC’s renewed interest in this subject, and the threat of state consumer fraud actions, it would be imprudent to disregard the new Guides.

Peeled, Inc. Seeks Injunction, Damages in Trademark Infringement Suit Against Peeled Fruit LLC

Jonathan Stagg — Thu, 16 Sep 2010 09:42:43 -0700

Peeled, Inc. (“Peeled”) www.peeledsnacks.com, a company specializing in healthy, natural snack foods including dried fruits and dry roasted nuts, recently filed a trademark infringement suit in the United States District Court for the Southern District of New York against Peeled Fruit LLC (“Peeled Fruit”) www.simplypeeled.com. Peeled Fruit sells frozen soft-serve fruit, with fresh fruit toppings. Peeled alleges that Peeled Fruit is attempting to cash in on the brand awareness and goodwill associated with Peeled’s marks.

Peeled began marketing its products under the marks “Peeled,” “Peeled Fruit,” and “Peeled Snacks” as early as 2004. Since that time, Peeled’s marks have received extensive coverage in television and print media, including receiving a coveted spot on Oprah’s O List as one of Oprah’s favorite afternoon snacks, and receiving the 2008 “Best of Food” award from Health Magazine. Peeled registered the mark “PEELED SNACKS” on January 10, 2006 with the United States Patent and Trademark Office.

Peeled alleges in its complaint that long after it began marketing its products with the Peeled marks, Peeled Fruit began infringing on the marks by using the words “Peeled” and “Simply Peeled” in its marketing materials. Peeled argues that Peeled Fruit sells similar products with similar ingredients, and that as a result the products are confusingly similar. Peeled claims that Peeled Fruit had full knowledge of Peeled’s prior use of the marks, and that in spite of Peeled’s requests, Peeled Fruit has refused to cease its use of the marks.

Peeled alleges that Peeled Fruit not only knew about Peeled’s use of the marks, Peeled Fruit “adopted the trademarks with the intent to trade and capitalize on the goodwill generated by Peeled, Inc.’s extensive and widespread use of its trademarks, as well as its extensive sales, advertising and consumer acceptance and recognition.” Peeled argues that the similarities between the products sold by both companies make the shared use of the marks likely to cause confusion, mistake and deception among consumers.

As a result, Peeled is seeking an injunction against Peeled Fruit, which would restrict Peeled Fruit from further use of the marks. Peeled is also seeking a monetary damage award, under federal trademark law (15 U.S.C. § 1117), in an amount equal to either 1) three times the amount by which Peeled was damaged by the alleged infringement, or 2) three times the total profits Peeled Fruit obtained from the use of the allegedly infringing marks. Finally, Peeled is seeking an order from the court, under 15 U.S.C. § 1118, requiring Peeled Fruit to destroy all materials that display the allegedly infringing marks.

5-Hour Energy v. 8-Hour Energy: Monopolization Claim Flops

David Pacheco — Fri, 20 Aug 2010 08:17:57 -0700

By Guest Blogger Joseph Eckhardt

In an unfair competition suit under 15 U.S.C. § 1125, the king of the two-ounce energy shot, 5-Hour Energy, is suing the makers of 8-Hour Energy in the Eastern District of Michigan, claiming that 8-Hour Energy falsely associates itself with 5-Hour Energy. 8-Hour Energy has tried to strike back with a monopolization claim, arguing that 5-Hour Energy has engaged in a number of anticompetitive tactics to drive away competitors like 8-Hour Energy, and 6-Hour Energy, which 5-Hour Energy sued in 2008.

Anyone who has recently set foot in a convenience store or watched late night cable television knows how valuable the energy drink business has become. To get an idea of how this market has grown, take a look at the wall of energy drinks displayed at thescreamingenergy.com product review web site. Perhaps the most valuable spot in that market is in the two-ounce “energy shot” space, on the counter next to the cash register, where customers are willing to pay $3.50 for two ounces of an elixir that will “help you feel sharp and alert.” (By comparison, a consumer will seldom pay more than 99 cents for a 12 ounce can of caffeinated cola.) And the consensus is that 5-Hour Energydominates this category.

The 8-Hour Energy defense team may have a good argument that 5-Hour Energy is the king of the convenience store counter, but the Eastern District of Michigan issued an Order last week slapping down 8-Hour Energy’s monopolization claim. 8-Hour Energy argued that 5-Hour Energy engages in anticompetitive tactics to control the market, but failed to convince the court that those tactics actually harm 8-Hour Energy. For example, the court noted that anything 5-Hour Energy did to exclude 6-Hour Energy from the market couldn’t have harmed 8-Hour Energy. Ultimately, 8-Hour Energy should be able to argue that any anticompetitive conduct is relevant to prove that 5-Hour Energy has harmed competition – this may be an issue that 8-Hour Energy can exploit on appeal.

The court’s order provides a good example of the risks associated with raising antitrust counterclaims. Here, the Eastern District of Michigan dismissed 8-Hour Energy’s monopolization counterclaim for failure to convincingly plead the claim. If 8-Hour Energy somehow revives the claim, the next hurdle will be definition of the relevant market. Is there an exclusive market of 2-ounce energy drinks? If Red Bull, Coca Cola, or coffee are reasonable substitute “energy drinks,” 8-Hour Energy’s monopolization case doesn’t have a chance.

Federal Court Ends Alleged "Super Berry" Scheme (For Now)

David Pacheco — Thu, 19 Aug 2010 08:02:44 -0700

A U.S. District Court in Illinois, at the request of the Federal Trade Commission, has issued a preliminary injunction freezing the assets of two individuals and five related companies selling dietary supplements derived from the acai berry. According to the FTC, the defendants engaged in a number of deceptive practices in violation of the FTC Act including advertising false celebrity endorsements by Oprah Winfrey and Rachel Ray, making misleading claims regarding the health benefits of the supplements, and providing misleading information regarding the prevalence and severity of illnesses and health conditions which the supplements were intended to cure and prevent. The FTC’s complaint not only cites misleading health claims regarding the fruit, but also alleges that the companies repeatedly deceived consumers by fraudulently charging their credit cards during and after “risk free trials” of the supplements. In addition to this preliminary injunction, the FTC is seeking a permanent injunction, damages for injured consumers, and costs and attorney’s fees. The defendants’ answer is due August 31, 2010.

This suit is another warning to the supplement industry that the FTC, along with the FDA and consumers, are paying special attention to the claims and practices of dietary supplement companies.

The Show Goes On: USDC Allows Vitaminwater Lawsuit to Proceed

David Pacheco — Wed, 28 Jul 2010 09:11:03 -0700

By Guest Blogger Tyler Anderson

In an opinion issued on July 21, 2010, Judge John Gleason of the United States District Court for the Eastern District of New York largely denied the defendant’s motion for dismissal and held that 10 of the 13 claims in a class action suit brought against Coca-Cola for alleged unlawful health claims on its Vitaminwater drinks could proceed. The claims that still must be examined in court include allegations of misleading advertising, fraudulent business acts, and unfair methods of competition.

The plaintiffs in the class action, which include the health advocacy group Center for Science in the Public Interest (“CSPI”) as co-counsel, contended that Vitaminwater’s labeling and marketing is misleading because it (1) communicates a number of purported health benefits (including healthy joints, optimal immune function, and reduced risk of chronic disease), drawing consumer attention away from the significant amount of sugar (33 grams per bottle) in the product; (2) portrays Vitaminwater as healthy when it is essentially a snack food that provides nutritional benefits because it has been specifically fortified to do so; and (3) suggests that Vitaminwater contains nothing but vitamins and water.

While the court concluded, citing applicable Food and Drug Administration (“FDA”) rules and commentary, that sugar was not a “disqualifying nutrient” under applicable FDA regulations, the plaintiffs’ latter two claims were found to accurately describe violations of FDA regulations, and accordingly may serve as a non-preempted basis of state law liability.

The FDA regulations restricting health claims or implied claims of healthiness related to foods that meet certain minimum nutrient levels, colloquially termed “the jelly bean rule,” were developed in an effort to prevent food producers from encouraging the consumption by consumers of junk food by fortifying the food in question with nutrients. The “jelly bean rule” is applicable only to (1) health claims, and (2) nutrient content claims that use the word “healthy” to suggest that a food may help consumers maintain healthy dietary practices because of its nutrient content. Finding that Vitaminwater’s labeling contains claims in each of these two categories, the court ruled the plaintiffs could proceed with this claim.

The plaintiffs alleged Vitaminwater’s labeling is misleading because it uses a product name that includes two of the product’s ingredients (vitamins and water), but fails to mention another notable ingredient (sugar). FDA regulations on this subject recognize that such product names have the potential to mislead consumers. Thus, the court held that the plaintiffs were allowed to pursue this claim. In the aftermath of this ruling, Coca-Cola released a statement expressing their confidence that the plaintiffs’ claims are without merit and will ultimately be rejected. Given that the implications this case could carry into the growing functional food and beverage segments of the market, we will continue to track it closely.

Stoel Rives and ACC Mountain West To Host Nutrition Law Symposium

David Pacheco — Tue, 13 Jul 2010 12:24:28 -0700

We are excited to announce the Sixth Annual Nutrition Law Symposium presented by Stoel Rives LLP and the Association of Corporate Counsel, Mountain West Chapter. The Symposium will be held at the Thanksgiving Point Golf Club in Lehi, Utah from 8 a.m. to 1:30 p.m. on Friday, September 17, 2010. The agenda features panel discussions on the FTC Advertising Guidelines and Better Business Bureau’s National Advertising Division procedures, as well as a Worldwide Regulatory Update. The keynote speaker will be announced soon. The Symposium will be followed by an afternoon golf scramble.

For more information, contact Melanie Williamson, Stoel Rives Business Development Coordinator, at (801) 715-6662 or mwwilliamson@stoel.com.

Canada: Temporary Relief for Unlicensed Supplements

Catherine Parrish Lake — Wed, 23 Jun 2010 10:19:03 -0700

The Canadian government recently proposed a temporary solution to allow continued sales of unlicensed Natural Health Products (NHPs). The proposed regulations, titled “Natural Health Products (Unprocessed Product License Applications) Regulations” (the “Proposed Regulations”) provide an exemption for some unlicensed NHPs that have pending applications for licensure.

Under current Canadian regulations, NHPs must be licensed. There is currently a backlog of approximately 10,000 unlicensed NHPs on the market in Canada that have applications pending to receive regulatory approval. In January of this year, the National Association of Pharmacy Regulatory Authorities issued a statement urging pharmacies to halt sales of unlicensed NHPs because such products posed a risk to public safety. Some pharmacies adopted this position, cutting off market access for some manufacturers.

The Proposed Regulations would allow continued sales of unlicensed NHPs in some situations. To qualify, a manufacturer must have an application on file with Health Canada that has been pending for more than 180 days and the product must meet certain safety requirements. If implemented, the Minister of Health would notify an applicant that an exemption number has been assigned. Within thirty days of this notice, the applicant must consents to having its exemption information posted on the Health Canada website and must verify that the product meets certain safety and use criteria (for example that it is not intended for use by children or women who are pregnant or nursing and does not contain harmful or prohibited ingredients).

Once an applicant provides consent and verification, the NHP will be deemed to hold a license, allowing the product to be sold legally. Manufacturers will be required to display the exemption number (rather than an NHP number) on product labels. The Proposed Regulations give manufacturers 12 months or until the next label run to comply with the labeling requirements. Manufacturers must also comply with other safety requirements imposed by Canadian “Natural Health Products Regulations”, but will not share in all of the rights provided to licensees under such regulations.

Note that deemed licenses provide only temporary relief. The Proposed Regulations will be in force for 30 months after becoming effective. Therefore, manufacturers will still need to complete the licensing process. For those whose Canadian applications are stuck in queue, however, the Proposed Regulations should provide some relief.

Steve Mister of CRN: We Need "Better Enforcement of the Law, Not a Rewrite of It"

David Pacheco — Mon, 07 Jun 2010 08:29:41 -0700

Steve Mister, President and CEO of the Council for Responsible Nutrition, authored an op-ed article for USA Today where he argues that the current laws regulating dietary supplements are effective, but need better enforcement. According to Mr. Mister, the dietary supplement industry supports full implementation of the laws as a way to weed out the few unethical practices and companies from an otherwise legitimate industry. The article is part of Mr. Mister's efforts to promote the passage of the Dietary Supplement Full Implementation and Enforcement Act and CRN's efforts to promote compliance and ethical practices in the industry.

FTC Announces Intent to Issue Compulsory Process Orders Regarding Marketing of Food and Beverages

David Pacheco — Fri, 28 May 2010 10:38:32 -0700

By Guest Blogger Tyler Anderson

This post also appears on The Food Liability Law Blog

In a May 25, 2010, Federal Register Notice, the Federal Trade Commission (the “FTC”) announced its intention to issue compulsory process orders to 48 food and beverage manufacturers, distributors, marketers, and quick service restaurant companies. The proposed orders seek information concerning the companies’ marketing expenditures targeted toward children and adolescents, and nutritional information about the companies’ food and beverage products marketed to children and adolescents.

The proposed orders, issued under Section 6(b) of the Federal Trade Commission Act, 15 U.S.C. § 46(b), will seek information in six categories, including:

• The categories of foods marketed to children (ages 2-11 years) and adolescents (ages 12-17 years);

• The types of measured and unmeasured media techniques used to market food products
to children and adolescents;

• The amount spent to communicate marketing messages about food products to children and adolescents;

• The nature of the marketing activities used to market food products to children and adolescents;

• Marketing to children and adolescents of a specific gender, race, ethnicity, or income level; and

• Marketing policies, initiatives, or research in effect or undertaken relating to the marketing of food and beverage products to children and adolescents.

By procuring this information, the FTC will be able to evaluate the impact of self-regulatory efforts on the nutritional profiles of foods marketed to children and adolescents. In addition, the FTC seeks to determine and analyze how companies allocate their promotional activities and expenditures among various media and for different food products. Interested parties may submit comments on or before June 24, 2010.

This FTC action is a follow-up to its July 2008 report entitled, Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation. That report represented the findings of a 2006 FTC study of promotional activities related to food and food products targeted toward children and adolescents. It found that, while room for improvement existed, the food and beverage industries had made significant progress on this front since the FTC and the Department of Health and Human Services co-sponsored a Workshop on Marketing, Self-Regulation & Childhood Obesity in 2005. As everyone from the First Lady to the World Health Organization is focused on the impact of marketing on childhood obesity, the results of this FTC action will bear monitoring.

News from Washington, D.C.

David Pacheco — Thu, 27 May 2010 09:00:08 -0700

This was a relatively busy week in D.C. for dietary supplement legislation. First, a bill was introduced that would enable the FDA to better enforce the DSHEA, and second, a special Senate committee held a hearing on dietary supplement safety. Read more about each after the jump:

On Tuesday, Senators Orin Hatch (R-UT) and Tom Harkin (D-IA) introduced the "Dietary Supplement Full Implementation and Enforcement Act of 2010". This act, which is a re-introduction of a 2003 bill, would boost the FDA's ability to enforce the Dietary Supplement Health and Education Act of 1994 ("DSHEA").

The Act would allocate more funds to the FDA and would create additional requirements for the FDA and for dietary supplement companies. If this bill were the become law, the FDA would be required to:

provide an estimate to Congress of the cost over the next five years of fully implementing the DSHEA
conduct inspections of all facilities in which a dietary supplement is manufactured
implement the recommendations from the January 2009 report from the Government Accountability Office
notify the DEA if the FDA determines that t anew supplement contains an anabolic steroid

The act requires Dietary supplement manufactures, distributors, and retailers to:

comply fully with the DSHEA and the Dietary Supplement and Non-prescription Drug Consumer Protection Act
cooperate fully with the FDA in implementing all relevant federal laws and regulations
blow the whistle on suspected violations of federal laws and regulations

The act would also allocate additional funds through 2014 to the FDA for enforcement of dietary supplement safety.

On Wednesday the Senate Special Committee on Aging held a hearing regarding dietary supplements. The hearing was mostly devoted to concerns about maintaining and ensuring the safety of dietary supplements sold in the United States. Senator Herb Cole (D-WI), the chairman of the committee opened the hearing, with testimony from Greg Kutz of the Government Accountability Office, Tod Cooperman from ConsumerLab.com, Charles Bell from Consumers Union, Steve Mister from CRN, and Joshua Sharfstein from the FDA. Senator Hatch made a formal statement regarding the Dietary Supplement Full Implementation and Enforcement Act. You can watch the recorded version of the hearing and read the statements from each witness here.

Five Tips for "Green" Advertising

David Pacheco — Fri, 21 May 2010 09:00:03 -0700

Yesterday, Stoel Rives' Salt Lake City office hosted a seminar on Advertising Law with Catherine Lake, Josh Gigger, and myself presenting. As part of the seminar, I offered some tips on avoiding legal problems when advertising the environmental friendliness of your goods or services. Here is a summary of those tips:

Making false or misleading green claims in advertising, even if unintentional, can get you in trouble with the FTC and with consumers and competitors suing under the Lanham Act and a number of other state and federal laws. To help avoid these problems, here are five tips to consider when making green claims in advertising, including on packaging and labels:

1. Substantiate your claims.

The claim must be based on competent and reliable evidence and the basis must exist at the time the claim is made. Objective scientific research (test, studies, etc.) by qualified experts using generally accepted procedures to produce reliable results is normally sufficient to satisfy the "competent and reliable" requirement. Because the evidence must exist when you make your claim, you cannot rely on research conducted after you make the claim as proper substantiation. Companies making green claims should keep documentation and other records showing proper substantiation.

2. Be specific.

Does the claim apply to your manufacturing process, your packaging, your product, of some combination of the three? For example, if you use the word "recyclable" without any qualifications, that claim is misleading unless every component of the product and packaging is recyclable (excluding minor incidental components like the plastic lid on a soda pop bottle). You also need to be clear about how you define your advertising terms. What do you mean by "Eco Friendly" or "Ozone Safe"? Courts and the FTC tend to give very literal interpretations that include every ambiguity to such claims and therefore, clarity on the part of the advertiser is essential.

3. Qualify your claims.

If Tip #2 requires you to be more specific with your claim, you must qualify that claim with clear, prominent, and understandable language. The larger the font and the closer the statement appears to the green claim, the less likely you are to have a problem. Avoid fine print and legalese as much as possible.

4. Accurately present your claims

Comparative advertisements need to be accurate. If you advertise the product as having "50% more recycled content", it is not clear what you are comparing; it could be another version of your product or a competitor's product. A claim may be literally true but misleading: "50% More Recycled Content!" when the recycled content went from 2% to 3%. Consumers and the FTC are probably looking for something a little more substantial than 2% to 3% when products make such claims.

5. Be truthful

Finally, and perhaps most obviously, make sure your claims are true. Avoid making claims that are half-truths or otherwise leave out crucial facts. For example, fruit labeled as "organic" that uses three times as much water in the growing process. Also, toting a product as "All-Natural" in an attempt to set the product apart from competing products can be misleading because various harmful "all-natural" ingredients like arsenic, lead, or mercury are not likely to come to mind when a consumer sees the ad. Using marks or symbols that give the impression of third-party approval or certification is also misleading and has led to problems for a number of companies.

These tips are based on the FTC's Guides for the Use of Environmental Marketing Claims, or "Green Guides".

Additional resources:

Last November, Stoel Rives hosted the webinar series, "Bringing Environmentally Sustainable Food Products to Market", presented by Ken Odza and Ann Glazer of Stoel Rives and the Food Liability Law Blog, Steve Marinkovich from Propel Insurance, and Peter Truitt, CEO of Truitt Bros. Inc. all of whom offered excellent advice to companies marketing environmentally friendly food products. The third session of the webinar included a discussion of the FTC Green Guides, the pitfalls of greenwashing, and other advice similar to that given at the Salt Lake City seminar. An on-demand version of the webinar is available here, with the slides in pdf format available here.

For an interesting study on false or misleading green claims, check out TerraChoice's "Greenwashing Report".

New Legislation Seeks to Soften FDA Regulation of Nutritional Supplements

Jonathan Stagg — Wed, 19 May 2010 09:17:35 -0700

One major complaint of companies marketing nutritional supplements is that the FDA severely limits their use of scientific findings in promoting the health benefits of their products. Under current FDA regulations, use of a scientific study to advertise the health benefits of a given product can convert the product from a nutritional supplement into a drug, and therefore impose the vast array of regulations applied to drugs. As a result, nutritional supplement manufacturers have to be very careful about claiming health benefits or citing to scientific research, whether on their product labeling or even on their websites.

In response to these concerns, Congressmen Jason Chaffetz (R-UT) and Jared Polis (D-CO), introduced what they are calling the “Free Speech About Sciences Act.” This proposed legislation seeks to soften the application of these FDA regulations to nutritional supplements. If the law were to pass, companies would be allowed to reference “legitimate scientific research” in support of claims about the health benefits of their products. In order to fall within the definition of “legitimate scientific research,” the study must have been conducted and reviewed according to certain standards, and must appear in a peer-reviewed scientific publication. Companies must also follow certain guidelines in presenting the findings, such as including an accurate and balanced summary of the research, providing consumers a citation to the study, and providing information about the entities who funded the research.

Will the New Health Care Law Improve Chilren's Nutrition?

David Pacheco — Thu, 13 May 2010 08:00:44 -0700

It is hard to deny that Americans are putting on the pounds and that the problem is often starting with poor nutrition during childhood. The problem has not gone unnoticed and a number of organizations, including the federal government, are trying to trim down the epidemic.

Authors Ellen-Marie Whelan , Lesley Russell, and Sonia Sekhar of the Center for American Progress recently published the report, "Confronting America's Childhood Obesity Epidemic: How the Health Care Reform Law Will Help Prevent and Reduce Obesity" (link to website introducing the report, with links to the full version and executive summary). As is clear from the title, the report analyzes the potential effect of the new health care reform laws on children's nutrition. Specifically, the authors discuss the Patient Protection and Affordable Care Act and highlight the following provisions as those with the most effective measures for combating childhood obesity:

Improved nutrition labeling in fast food restaurants, which will list calories and provide information on other nutrients (For more information on this specific provision, take a look at Richard Goldfarb's excellent post with his thoughts on the new labeling requirement).

The Childhood Obesity Demonstration Project, which gives grants to community-based obesity intervention programs

Community Transformation Grants, which gives grants to community-based efforts to prevent chronic diseases

The report also analyzes a number of other aspects of the law that, while not targeted specifically at combating obesity, the authors believe will have some positive effect on the problem.

Court Cuts Back Claims in Great Pomegranate Dispute

Joseph Eckhardt — Wed, 12 May 2010 15:17:31 -0700

By Guest Blogger Jay Eckhardt

This post also appears in the Food Liability Law Blog

In a dispute over product labeling and marketing, the Coca-Cola Company avoids liability as a result of its careful compliance with FDA rules. (Also, see Rick's post from last week, regarding Coca-Cola's victory in a dispute over its original formula label found on Coke® Classic.) But pomegranate champion POM Wonderful can still pursue a Lanham Act deceptive advertising claim against the company.

On May 5 the U.S. District Court for the Central District of California issued summary judgment orders that cut out two of POM's claims against Coca-Cola's "Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Juice Blend." (Download a copy of the Central District of California's Order here.)

The court acknowledged that consumers have griped about the emphasis on pomegranate and blueberry in the Minute Maid product labeling and advertising. (See Ken's post about a consumer class action concerning Tropicana's pomegranate blueberry juice blend here.) Still, the court agreed with Coca-Cola that POM could not bring a Lanham Act claim challenging the product name, because the company complied with FDA labeling requirements. The Minute Maid product contains less than one-half of one percent (0.5%) pomegranate and blueberry juice, but the court determined that the name is compliant with FDA rules, which allow for product names that prominently cite ingredients that are less than prominent in volume. Because the label clearly notes that the juice is "flavored" with pomegranate and blueberry juice and that the juice is a "blend" of several juices, the court held that the name complies with applicable FDA regulations (21 C.F.R. §§ 102.33(c) and 101.22(i)(1)(i)).

A second claim raised by POM was thrown out by the court. POM sought restitution under California Business & Professions Code section 17200, which provides a cause of action for "Unfair Competition." The court dismissed this claim because "restitution" has been narrowly interpreted by the California Supreme Court, thus barring POM's claim for recovery of a "lost business opportunity." Among authorities cited for the decision to dismiss this claim, the court reported that POM's similar claims under California's Unfair Competition law, brought against Tropicana and Welch's, have recently been dismissed in separate actions.

A third claim survived Coca-Cola's summary judgment attack. POM may proceed under the Lanham Act to challenge the marketing and advertising for the "blueberry pomegranate" product. The court held that POM may attempt to prove at trial that advertising and marketing actually deceived customers, or that Coca-Cola willfully and intentionally misled customers with the marketing of its product.

As noted from the court's order, Coca-Cola is not the only target of POM's litigation strategy. Other juice makers, Tropicana and Welch's, have been the focus of POM's efforts to defend its niche. Ken reported on POM's challenge to Ocean Spray's pomegranate cranberry juice blend last August, when POM survived Ocean Spray's initial motion to dismiss all claims.

An inspired marketing campaign for POM's products, and its essential ingredient, helped build the pomegranate franchise. It's hard to say whether litigation against advertising and labeling practices of POM's pomegranate competitors will be effective. At the same time, there's no doubt that POM is well aware of the burdens of FDA labeling regulations – the company was one among 17 companies notified by the FDA last February that its product labeling and advertising did not pass muster. The FDA warned POM that its advertising was suspect, based on the health claims made on its web site about the benefits of pomegranate juice.

Energy Drinks and Nutrition Bars too Related to Avoid Consumer Confusion

Michael Mangelson — Mon, 10 May 2010 16:05:11 -0700

The Trademark Trial and Appeal Board (TTAB) recently issued a decision that highlights the importance of not assuming that goods that fall in different international trademark classes are unrelated in a likelihood of confusion analysis. In In re Spirits of the USA, LLC (not citable 4/21/10), the TTAB held held that energy drinks (class 32) and nutrition bars (classes 5 and 30) are too related to avoid a likelihood of consumer confusion when used in connection with the mark "Runner". The TTAB concluded that energy drinks and nutrition bars both provide energy and are commercially related products that are sold in the same channels of trade to the same classes of consumers, so confusion is likely.

How can you know if the relationship between the products you plan to list in your trademark application and those in an existing third party registration are likely too close? Do what examining attorneys at the USPTO do: search for third party registrations that list both your products and the products listed in the registration in question. If a number of these third party registrations exist, the examining attorney is likely to cite them in a refusal claiming that this evidence suggests that the listed products are of a type which may emanate from a single source and therefore are likely to cause confusion in the marketplace. (See In re Albert Trostel & Sons Co., 29 USPQ2d 1783, 1785-86 (TTAB 1993)).

"Can You Really Afford To Do Business Without Politics?"

David Pacheco — Thu, 06 May 2010 10:38:37 -0700

“I often hear people say that they will just focus on the business side of things and not worry with the politics, but the question is: can you really afford to do business without politics.” - Daniel Fabricant, PhD of the Natural Products Association. This is an interesting question presented in today's article on Nutra Ingredients-USA.com regarding lobbying for the nutrition industry, and what some insiders identify as excessive freeloading by U.S. nutrition companies.

The article presents the view that companies are not doing enough to let the industry's voice be heard in Washington, quoting one source saying that many display "all the characteristics of a parasite". To show the benefit of organized political efforts by nutrition-related companies, Suzanne Shelton gives the example of Senator McCain's withdrawal of support from S.3002 but warns that the industry needs to step up to avoid losing advocates like Senator Orrin Hatch and Congressman Frank Palone Jr.

So industry insiders, is lobbying a necessary component of growth and stability for the nutrition industry?

Thanks to Tyler Anderson of the Food Liability Law Blog for forwarding the article.