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Bacon Labeling 101

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After a full day wrangling booze labels, I heard a good story about bacon labeling on the way home from work (bringing home the bacon, as it were). The radio story emanated from a Bloomberg web story, “Why Supermarket Bacon Hides Its Glorious Fat.” The story touches upon the intersection of our love-hate relationship with fat and with government, and also upon labeling issues and wily businesspeople. Explaining that bacon has “one of the most unusual and underappreciated packaging formats of any supermarket product” it says:

The standard one-pound package shows the bacon slices fanned out, with only their leading edges exposed. The industry term for this is a shingle pack—a reference to the way the slices overlap. Because those front edges tend to feature more lean muscle than the fattier back edges, and because the face of the top slice is invariably covered by a paperboard flap containing the manufacturer’s logo and other branding information, the consumer sees a relatively unbroken field of red protein, creating the illusion that the bacon is leaner than it is.

Lest the bacon packaging hide the fat too much, the U.S. government requires the packaging to show the real story, at least on the back window. The window allows the consumer:

to see how the bacon truly looks in all its fatty glory. … [T]he shingle pack doesn’t just present an idealized bacon fantasy—it also provides a built-in reality check. It’s hard to think of another package that engages in such a clever sleight of hand on the front and then gives away the game on the back.

The story also has a nifty video about the machinery used to slice the bacon slabs optimally. In a radio version of the story, Lukas says the shingle pack is “ingeniously deceptive.”

And if you don’t think bacon shingles have a lot to do with booze marketing, you should take a peek through this window.

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PTO Doesn’t Buy That THC Stands for Tea Honey Care

The Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (PTO) recently affirmed the refusal to register the mark THCTEA, holding that it is “deceptively misdescriptive” when used in connection with tea-based beverages. The Applicant—Christopher Hinton—is, according to marijuanafreepress.com, the acting editor for the Marijuana Free Press.

THCTEA’s journey through the trademark system has been an uphill battle.The mark was first refused by the PTO back in September 2012, for being “merely descriptive” and for “plainly indicat[ing] that Applicant’s…goods include…THC.” One pre-requisite for trademark registration is lawful use of the mark in commerce. The problem in this case was that goods containing THC (tetrahydrocannabinol, the active ingredient in marijuana) are illegal under federal law, so it would be impossible for the Applicant to show lawful use of the mark if the product did indeed contain THC.

Here is where things become interesting. The Applicant responded by clarifying that his beverages do not actually contain THC. Accordingly, the PTO rescinded its refusal based on unlawful use, but raised a new ground for refusal, based on the Applicant’s own admission: Using THCTEA on a beverage that contains no THC is deceptively misdescriptive.

Deceptively misdescriptive marks have two key features:  they misdescribe a significant characteristic of the goods associated with the mark (the “misdescriptive” part); and they are likely to cause reasonable consumers to purchase the goods, believing that the goods contain the misdescribed trait (the “deceptive” part). For example, LOVEE LAMB was held to be deceptively misdescriptive for seat covers that were not actually made of lamb’s wool. On the other hand, WOOLRICH was held not to be deceptively misdescriptive for clothes made out of cotton. In close cases, good lawyering can make a big difference.

After the PTO issued a final refusal, the Applicant appealed to the TTAB. On appeal, the Applicant re-alleged his previous arguments: “The characteristics of Applicant’s goods are such that they are suggestive” and “the product does not contain the controlled substance THC…THC is an abbreviation for ‘The Honey Care Tea.’” The TTAB was unpersuaded, and affirmed the PTO’s refusal.

Regarding the misdescription, the TTAB held that “it is plausible that tea-based beverages could contain THC” (albeit illegally) and that “THCTEA, when used for tea-based beverages, is merely descriptive for tea containing THC as a significant ingredient.” Apparently, recipes for THC-containing tea from such websites as grasscity.com, thestonercookbook.com, and 420magazine.com are sufficient to persuade the government that THC-containing tea is plausible. We were unable to find a recipe for THC-containing tea on marijuanafreepress.com.

Regarding deception, the TTAB agreed with the PTO that consumers would be likely to buy THCTEA beverages believing that they contain THC. The TTAB reasoned that, in light of the liberalization of marijuana policy in the United States, “a reasonably prudent consumer would be likely to believe that Applicant’s…beverages contain THC.”

In what probably comes as no surprise, neither the PTO nor the TTAB bought the Applicant’s argument that “THC” stands for “Tea Honey Care,” or that “THCTEA” stands for “The Honey Care Tea.” Apparently, the Applicant’s “example advertisements” (below) were unpersuasive:

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Additionally, the specimen (below) that the Applicant submitted to the PTO probably did not help his “Tea Honey Care” argument:

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THCTEA illustrates an interesting Catch-22 for descriptive marks that reference controlled substances. If you do put the controlled substance in your goods, you can’t claim lawful use of your mark in commerce. If you don’t put the controlled substance in your goods, your mark may be deceptively misdescriptive.

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FDA Warning Letters

kittyHere is a good and recent Warning Letter from FDA. I say good because it certainly appears to be well written, and to explain the law in a way that is sometimes hard to glean from the boring old regulations. Also, it seems to be a good thing, that we have a government whose first response is to send a firm letter, instead of, for example, some jackbooted thugs. FDA seems to put out a handful of such Warning Letters per month, on food and food labeling.

I am looking at this today because I often wonder why TTB does not get into the Warning Letter business. I think it could be a good way to explain some of the arcane rules so the people who want to comply, have a better chance to do so. Of course, like in so many other areas where TIWWCHNT, another lawyer explained how such letters can badly backfire. He explained that such letters, especially when they are good and clear, tend to serve as a template, for rapacious plaintiff class action lawyers to feast upon.

Here are some useful lessons, from this snapshot/letter, roughly in order of appearance in the letter:

  1. FDA really does conduct food inspections in far away places such as Japan.
  2. It is weird to see a US agency going after a foreign producer, because I am so accustomed to other agencies, such as TTB, doing so almost elusively through their licensed importer.
  3. There is such a thing as Hello Kitty Milk Flavored Chewy Candy.
  4. FDA likes to bandy about the term “misbranded,” and mentions it 6 times in this 3 page letter. I am getting the impression it is not a good thing.
  5. Good old wheat is a “major food allergen.”
  6. The food is misbranded because “it contains information in a second language, Japanese; therefore, all required information must be in both languages (i.e., the English language as well as the foreign language). For example, the Nutrition Facts panel and ingredient statement must be declared in both the foreign language and English.” I have explained this scores of times over the years, to skeptical clients. I have wondered myself, because I see so many labels that don’t seem to bother with this.
  7. Even on an ingredient as common as sweetened condensed milk, you need to list all the sub-ingredients. That is, “products are misbranded [when they] are fabricated from two or more ingredients and the common or usual name of each ingredient is not declared on the label, as required. …”
  8. At 4., the letter says you can’t make up your own serving sizes.
  9. Surprise, surprise, the little kitties don’t meet any known standard to substantiate the “healthy” claim.

Now, for the denouement, what the heck is FDA going to do about it, other than use up some paper? FDA says:

  1. “We may take further action” if the kitty people blow off the warning, and, for example, tell Customs not to let the candy into the country.
  2. The company has 15 days to respond.

But compared to 1 and 2, the big hammer, at least potentially, is pushing the company, or its US Agent, to pay for the cost of FDA’s inspection. The letter wraps up by saying:

[The law] authorizes FDA to assess and collect fees to cover FDA’s costs for certain activities, including reinspection-related costs.  A reinspection is one or more inspections conducted subsequent to an inspection that identified noncompliance materially related to a food safety requirement of the Act, specifically to determine whether compliance has been achieved.  Reinspection-related costs means all expenses, including administrative expenses, incurred in connection with FDA’s arranging, conducting, and evaluating the results of the reinspection and assessing and collecting the reinspection fees. …  For a foreign facility, FDA will assess and collect fees for reinspection-related costs from the U.S. Agent for the foreign facility.  The inspection noted in this letter identified noncompliance materially related to a food safety requirement of the Act.  Accordingly, FDA may assess fees to cover any reinspection-related costs.  Please consider providing a copy of this letter to your U.S. Agent.

In a future post, I would like to see how often, and under what circumstances, FDA drops this hammer. From what I can see in the letter, and in my opinion, the tone seems about right. Not too harsh, not too lax. It would be a foolish kitty purveyor that would ignore such a warning.

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FDA Not Ready For FSMA Renewals

Under the new and important Food Safety Modernization Act (FSMA), FDA was supposed to commence food facility re-registrations yesterday. This was mandated by section 102 of the FSMA law, enacted in 2011.

This piece of the FSMA puzzle is not off to a propitious start. It was bad enough that there was not much guidance or clarity about how this would work, before the October 1, 2012 to December 31, 2012 re-registration period began. But it’s even worse that the brief window for required and biennial re-registration began yesterday — and yet there is still no means by which to accomplish what is required. The renewal website was briefly available last week, for a few hours, then it froze, then it disappeared, to be replaced with an oh so calm assurance that:

Biennial Registration Renewal for Food Facilities will not be available on October 1, 2012.  We therefore will not be accepting food facility registration renewals at this time.

Natural Products Insider has explained:

FDA is delaying the registration renewals that are mandated under a 2011 law after the Grocery Manufacturers Association and numerous other trade associations recently sought guidance in meeting the registration requirements.

“It would be extremely inefficient and costly for companies to re-register shortly after October 1st based on the old procedures, only to find out later they have to do it all over again after FDA clarifies the new procedures in its guidance,” wrote Leon Bruner, senior vice president, science and regulatory affairs, and chief science officer of the Grocery Manufacturers Association, in a Sept. 21 letter to the Office of Management and Budget. “Thus, it will be difficult, if not impossible, for food facilities to effectively and efficiently meet FSMA’s registration renewal mandate without guidance from FDA.”

This leaves several hundred thousand food facilities around the world, plus their required agents, with a looming and ever closer deadline, but no means by which to comply with the law.

A few weeks earlier, in late summer, two groups sued FDA “for declaratory and injunctive relief regarding the failure by [FDA] to promulgate final regulations by mandatory deadlines contained in [FSMA].” The non-profit food groups said:

FDA has missed not one, not two, but seven critical deadlines, and counting, in failing to implement FSMA’s major food safety regulations. FDA has submitted several of these unlawfully delayed regulations to [OMB], where they are still awaiting approval. However, FDA has authority to promulgate the regulations without OMB approval.

Despite this bump in the road, here’s what food companies around the world can do, to avoid missing the renewal deadline. Make sure you have a reputable FDA food agent, if you are based outside the US. Make sure that agent has up-to-date information about your facility. You should be especially careful if your agent hides its true identity, or has vaguely (and confusingly, aggressively, and in many cases not so vaguely) pretended to be affiliated with FDA. Some of the agents charge as much as $900 in the first year. If your US importer, or a friend, has handled this for you in the past, it may be time to reconsider and at least make sure your agent is aware of the changed environment. The law can subject the US agent to substantial liability for the costs related to recalls and re-inspections.

For more information about agents and registration, go to www.food-agent.com. The site is affiliated with Lehrman Beverage Law, a law firm in the Washington, DC area that has been acting as US agent for hundreds of companies around the world, since the earliest days of the FDA agent requirement, almost 10 years ago. Unlike many other leading agents, food-agent works within traditional attorney ethics rules, has moderate fees, and tries to avoid confusing food companies about their identity or their relationship with FDA.

October 19, 2012, 9 pm Update:  FDA has announced that “Biennial registration renewal for food facilities will begin at 12:01 a.m. on October 22, 2012. At that time, the system will be accepting food facility registration renewals.”

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FDA Cider, Apples and Nutrition Facts

This French Apple Cider provides a small taste of what is coming soon. It is our understanding that TTB has no plans to require or encourage ingredient labeling, such as that on the back label here. But TTB does have big plans to require Serving Facts Labeling (similar to this Nutrition Facts labeling) someday very soon. It’s a big, important change. There is a lot of data on this back label; much of it will be required in a few years and almost none of it would have been required 20 years ago. The Government Warning arrived 20 years ago and redemption labeling (as well as the UPC) started appearing a few decades ago. This COLA is unusual because FDA (not TTB) typically has authority over wines under 7% alc./vol. (such as this cider). But here the importer noted (at box 19) “submitting for review of health warning.” TTB retains control over the Warning and the wine tax, even in those instances where general labeling jurisdiction shifts over to FDA. Some time after approval, TTB apparently decided to hand this back to FDA, as the current status of this approval is “surrendered.”

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