Made-in-USA Shootout Results in Jury Trial, $3.1 Million Judgment
Novelty glassware producer weaponizes FTC steering towards rival
Is Half Bulletproof Actually a Factor?
For the uninitiated, the shot glass in query—together with related merchandise provided by Wisconsin-based producer BenShot—is, properly, a shot glass, with a bullet “embedded” in its facet. Here’s an image.
“Embedded” is one approach to describe how the bullet is connected to the glass, however to our eye it appears to be like as if the bullet was pressed into the glass when it was in its authentic, molten state—and the glass then cooled and hardened round it.
So is the glass actually “bulletproof”? The bullet, in spite of everything, is making a dent in its facet. Wouldn’t a bulletproof glass product include a glass that had been shot by a gun and remained unchanged, maybe with the bullet used within the shot included within the field? Or is it an artwork piece, meant to seize the second that the bullet hits the glass? No, that gained’t work—that will nonetheless imply the glass was not bulletproof.
In any case, what would having this glass in your assortment say to your visitors? That, within the case of an assault by a gun-wielding madman, their shot of scotch could be secure, even whereas they might absolutely need to duck and canopy?
Pictures within the Darkish
Regardless of our (arguably) persnickety evaluation, this text just isn’t a few false promoting case, though we admit that such a declare could be enjoyable to take aside. No, BenShot is the plaintiff within the current dispute, which is aimed toward (forgive the pun) a competitor that produces related glasses.
Sure, the American fascination with firearms means that there’s a vast sufficient marketplace for two corporations producing glass-pierced-by-bullet novelty glasses (really, make that nearly ten such companies).
And no, this isn’t a trademark infringement case introduced towards a competitor—an enterprise named Fortunate Shot USA. No, we think about that the “bullet-buried-in-a-shot-glass” craze occurred too quick for anybody to stake credible IP claims.
No, this case is a made-in-the-USA go well with, introduced partially below the Lanham Act. And what’s fascinating is that it went to trial. And—much more fascinating—plaintiff BenShot gained. Large.
BenShot sued again in 2018, ultimately submitting an amended criticism with three counts—one Lanham Act cost of false designation of origin towards Fortunate Shot USA and its mum or dad firm, an an identical cost towards each corporations’ president, Douglas Ingalls, and a 3rd towards the businesses for common-law unfair competitors. The majority of the criticism is an exhaustive discourse on the myriad methods Fortunate Shot and Ingalls ran afoul of the Federal Commerce Fee’s (FTC) made-in-the-USA pointers—missteps that, if true, had been typically comedian.
Fortunate Shot, BenShot claimed, persistently marketed its merchandise as “made within the USA” on buy shows, packaging, firm newsletters and on-line product listings. “BenShot turned more and more involved Fortunate Shot branded merchandise, and extra particularly the Fortunate Shot Bullet Shot Glass and the Fortunate Shot Whiskey Glass weren’t the truth is made within the USA regardless of being claimed as such,” BenShot wrote.
Right here’s the place issues get comedian. “In March of 2017, [BenShot founder] Ben Wolfgram…had a cellphone dialog with Ingalls…about their copying of BenShot’s…designs and aggressive conduct,” the criticism states. “Through the dialog, Ingalls admitted the ingesting glass with the indentation for the bullet already shaped within the glass…of the Fortunate Shot [products] had been made in China and never made within the USA.” A second, related dialog adopted a yr later.
Not good technique on Ingalls’ half.
Moreover, within the depend towards Ingalls—keep in mind, firm officers may be sued for false designation below the Lanham Act—BenShot maintains that “Mr. Ingalls directed the Chinese language glass producer to take shut up photographs and movies of the glass making course of.”
“Mr. Ingalls knowledgeable the Chinese language producer that it’s ‘crucial to our media/promoting’ that the photographs and movies ‘don’t present faces of staff or any phrases or writing in Chinese language,’” the criticism states. “‘We would like our prospects to assume this product might be made within the USA.’”
In contrast to nearly all of the made-in-the-USA instances we report on, BenShot LLC v. 2 Monkey Buying and selling LLC et al. was a personal motion. And in contrast to nearly all of the promoting instances we report on in any respect, it went to trial. The upshot? An unfortunate day for Fortunate Shot: The corporate misplaced on all three counts and was hit with $3.1 million in damages.
In accordance with the criticism, BenShot is motivated by righteous indignation towards Fortunate Shot’s claims. Each corporations’ merchandise are aimed toward “firearm fans, navy personnel, veterans, patriots,” all of whom are “prospects who extremely worth merchandise made within the USA.”
However within the absence of patent or trademark expenses, it appears seemingly that made-in-the-USA claims had been additionally a handy—to not point out ironic—approach to weaponize the legislation towards a rival.
Alongside harder motion from the FTC, which we covered again in April, business-on-business made-in-the-USA litigation ought to have a chilling impact on anybody who needs to make a revenue on a falsely professed patriotism.
FTC Promised to Hit the Books on EdTech Information Abuse
However with one case below its belt, what does the promise imply?
Back in September, we lined the Worldwide Digital Accountability Council’s (IDAC) publish concerning the training know-how sector and its repeated missteps in dealing with consumer information. IDAC checked out “almost 500 world ed tech apps” that had been gaining reputation with the arrival of COVID-19-inspired college closures.
“We discovered that some apps shared private consumer data, comparable to e mail addresses, names, cities and [G]oogle promoting IDs[,] within the question parameters of the URL,” IDAC acknowledged in its report. And whereas many of the slips weren’t “egregious or intentional misconduct,” the general state of affairs concerned the publicity of delicate information describing tens of millions of kids throughout the nation—a tragic file certainly.
Towards the top of our report, we famous the FTC had turned its Eye of Sauron gaze on the identical business. “In investigating potential violations of COPPA by suppliers of ed tech and different lined on-line providers,” it wrote, “the Fee intends to scrutinize compliance with the total breadth of the substantive prohibitions and necessities of the COPPA Rule and statutory language.”
The Fee’s promised scrutiny arrived within the type of a complaint aimed toward “training know-how supplier” Chegg, which payments itself as “the main student-first related studying platform”—no matter which means.
In accordance with the Commish, Clegg, regardless of struggling 4 information breaches since 2017, “failed to repair issues with its information safety.” The corporate had compromised “delicate details about tens of millions of its prospects and staff, together with Social Safety numbers, e mail addresses and passwords.” The lion’s share of the knowledge was misplaced resulting from phishing scams that focused Chegg staff.
The proposed order settling the matter requires Chegg to doc information assortment and deletion insurance policies, present shoppers with entry to information and the power to delete it, present multi-factor identification, and create a safety program “that addresses the issues within the firm’s information safety practices,” together with encryption insurance policies.
So ought to the edtech sector think about itself on discover? “The motion towards Chegg is a part of the FTC’s aggressive efforts to make sure training know-how corporations defend and safe private information they gather and don’t gather extra data than is important,” the Fee press launch concludes.
However does one case in six months a campaign make?
California Courtroom Adopts Sound Components Components
Dismisses class motion claiming entrance label corn syrup switcheroo
Right here’s a little bit of aid from California’s Central District: a ruling that brings some sanity to a tiny nook of the product-labeling universe.
It’s Cecilia Martinez v. Mead Johnson and Co. LLC—that’s proper, Mead Johnson, an organization that would use some good news proper about now.
Martinez sued the toddler method large in February, claiming that the corporate was deceiving dad and mom by labeling its Enfamil-brand merchandise as “milk-based” on the entrance label, when the method’s fundamental ingredient was listed as “corn syrup solids” on the again. Martinez’s difficulty wasn’t merely that the primary ingredient was not what it appeared; she additionally appears to be on a little bit of a jag in relation to corn syrup.
The quantity of corn syrup in Mead Johnson’s merchandise “for an toddler is extremely regarding, notably contemplating that ‘[a]lmost 40% of a child’s carbohydrate energy come from child method (identical to breast milk).’ For these causes, [a doctor at the Morehouse School of Medicine] recommends that ‘corn syrups must be banned in infants’ method as sweetener.’ This ban has already been applied by way of most of Europe….”
Martinez sued the Mead Johnson below California’s Shoppers Authorized Treatments Act, False Promoting Regulation and Unfair Competitors Regulation, amongst different expenses.
Mead Johnson moved to dismiss, which is the way it earned its much-needed excellent news; the court docket granted its movement and the corporate shook itself free from Martinez.
The order begins with probably the most not often heard sentences in authorized writing: “This case may be distilled to a easy query,” the court docket introduced.
“Would an inexpensive individual imagine it to be misleading or deceptive for a producer of powdered child method to name its merchandise ‘milk-based’ when milk is without doubt one of the elements, however not the first ingredient by weight?”
The reply, as we talked about, was a powerful “no.”
“Whereas cheap shoppers aren’t ‘anticipated to look past deceptive representations on the entrance of the field,’ Martinez has not achieved sufficient to allege that calling a product ‘Milk-based’ is, the truth is, misleading when milk is patently one of many named elements. Certainly, FDA steering means that labels ought to establish or describe ‘the fundamental nature of the meals or its characterizing properties or elements.’”
If that weren’t sufficient, “[The FDA then illustrates that point by using ‘milk-based’ or ‘soy-based’ as examples of proper labels that identify characterizing ingredients. Importantly, the FDA Guidance says nothing to the effect that a product’s characterizing ingredient should be conflated with the product’s primary ingredient by weight.”
There it is, folks: A commonsense and business-friendly (in the best sense) decision that should clarify things for the label-making set.
Hopefully it’s a trend!
Organic Oil Company Spills $1.6 Million to End Class Action
Barlean’s was targeted for dubious coconut oil health claims
It Ain’t Gospel, But Still…
Listen, we scan Wikipedia before we write a story. Sometimes for a basic overview on an esoteric subject, sometimes to get an unexpected angle. And sometimes for fact-checking—making sure we’re not making arguments that are way outside the common consensus.
Don’t product managers do the same before launching a marketing tag?
Take coconut oil. Good old sturdy Wikipedia is quite clear about how the scientific and medical communities feel about its supposed health benefits:
Many health organizations advise against the consumption of coconut oil owing to its high levels of saturated fat, including the United States Food and Drug Administration, World Health Organization, the United States Department of Health and Human Services, American Dietetic Association, American Heart Association, British National Health Service, British Nutrition Foundation, and Dietitians of Canada.
Marketing of coconut oil has created the inaccurate belief that it is a “healthy food.” Instead, studies have found that coconut oil consumption has health effects similar to those of other unhealthy fats, including butter, beef fat, and palm oil.
By way of background, Barlean’s claims to be “on a mission to make premium natural supplements and functional foods that feed the mind and body,” among other things. Part of that entails selling coconut and other oils as substitutes for conventional cooking oils. While user reviews touting the health benefits of its coconut oil products remain on Barlean’s site—“It is so healthy” enthuses one—the company’s own claims are somewhat more staid.
And that’s because of the settlement.
Barlean’s recently spooned out $1.6 million to settle a class action lawsuit brought by New York and California consumers who took exception to the company’s breathless—and allegedly false—health claims.
We recommend that you quickly flip past the complaint’s morbid summary of the role of cholesterol in coronary heart disease and stroke, and simply note that cholesterol is bad for you, and that coconut oil has it. We’d rather focus on the claims Barlean’s used to make. Here are a few: “Nature’s Most Versatile Superfood,” “Harvested at the peak of flavor and nutritional value,” “supports the heart and immune system and provides quick energy,” and “smart fat.” The complaint goes into detail regarding how each of these claims is untrue or misleading. But the important thing is that they are gone—from the website, at least.
The settlement terms are interesting—there are the usual reimbursements ($3 to $7 back for each purchase, limited to five per consumer), dough for the named plaintiffs ($7,500 each) and more than half a million in attorney’s fees for the class counsel—but that’s not the unusual part. Under the proposed agreement, Barlean’s will cease using the offending health claims for five years, “except to the extent they are modified to conform with the requirements for nutrient content or health claims that are, at that point in time, applicable under federal and state law.”
Lots can happen in five years.
In any case, our takeaway here is something so simple that it shouldn’t have to be said, but apparently needs to be shouted from the rooftops: No matter how trendy your product is, do the research and conform your claims to what you find.
And while we were glib with our skimming of Wikipedia, remember that research has to be competent and reliable scientific evidence. And that means what nutrition experts believe is required. If you base your claims on emerging science, you may have some leeway but need to make the status of the research clear.
Otherwise, you might find yourself eating coconut pie.
FCC Forces Caller ID to Stand in The Gap
To stymie robocallers, protocols must embrace non-IP networks
The very features that made IP an attractive vehicle for telephony are super-spreaders for robocalls.
Because IP is ubiquitous, decentralized and flexible enough to transmit many forms of information simultaneously, it added enormous possibilities for services compared with the previous digital network protocols.
But the problems presented by IP telecommunications piggyback on its virtues: IP makes robocalls easy to disguise, easy to automate and hard to track. And the people who make them take advantage of geographic and legal borders to evade punishment.
We’ve covered the government’s efforts to rein in the worst abusers of the IP telephone network—spoofers and robocallers—for a while now. As we noted last summer, robocalls took a hit from the COVID pandemic, but then staged a comeback. Now that we have final numbers for 2021, we can see that we’re almost back to where we were before the pandemic shutdown took its toll.
It seems like ancient history now, but the passage of the TRACED Act has also likely taken a toll on the scammers (but nowhere near as effectively as a global pandemic). Central to that Act was the mandate for networks to adopt the STIR/SHAKEN framework to eliminate IP-based call spoofing without additional charges to customers, a mandate that’s been going into effect in irregular leaps and bounds.
The most recent lurch forward concerns one of the remaining holes in the Federal Communications Commission’s (FCC) attempt to spread STIR/SHAKEN throughout the telecommunications universe: non-IP networks.
That such networks persist in an age when IP has sucked up every form of mass communication like a relentless, morphing blob from a horror movie may come as a surprise. But such networks are out there, and since STIR/SHAKEN is an IP-only protocol, legacy non-IP networks could easily become a refuge for robocallers fleeing IP.
The FCC recently announced a “formal review” of how to apply STIR/SHAKEN-level caller ID protections to these wayward networks. “The Notice of Inquiry adopted today seeks comment on the prevalence of non-IP technology in the country’s phone networks generally and the impact this technology has on the problem of illegal robocalls.” Both are things that we imagined that the FCC would already know about, but….
Additionally, the Commission “seeks input on alternative technological or policy solutions to enable caller ID authentication over non-IP networks,” including one protocol that would send call information over an internet track parallel to the non-IP call itself. Learning about the solutions that will be developed to solve the problem will be fun (at least to nerds like us).
Comments are due to the FCC by December 12.
Check Out Our Latest Blog Posts
If there were any question whether the current FTC was reenacting the 1970s, that question has been put to rest. And unfortunately, it’s not about seeing Grace Jones, Liza Minnelli and Andy Warhol at Studio 54 or wearing our finest velour shirts; the 1970s also saw quite a lot of rulemaking at the FTC.
Brought to You by the FTC: Event on Digital Marketing and Blurred Advertising to Kids
Yesterday, the FTC hosted an event to look at kids’ digital marketing. Here is a rough transcript; and if you have a spare five hours, you can watch the videos, which will soon be posted on the event page. The big question is whether the FTC will update its updated Testimonial & Endorsement Guides (or issue other mandates) with kid-specific requirements based on this event. (As an aside, these things used to be called “workshops.” For reasons that escape us, that term appears to be passe at the current FTC. Wouldn’t it be more festive to call them soirees, galas, thought raves or to dos if you wanted to rebrand?)
FDA Issues Proposed Rule Updating “Healthy” Food Claim Definition
On September 28, 2022, the U.S. Food and Drug Administration (FDA or Agency) issued a proposed rule to update the criteria for when foods can be labeled with the nutrient content claim “healthy” on their packaging. The proposed change aims to modernize and align the definition with current nutrition science; the Dietary Guidelines, 2020-2025; and the updated Nutrition Facts label. The FDA first established a definition for “healthy” in 1994, and at that time nutrition science and federal dietary guidance focused more on the individual nutrients contained in food. In 1994, the Agency amended Section 101.65(d) to define the term “healthy” as an implied nutrient content claim under Section 403(r) of the Federal Food, Drug, and Cosmetic Act. The definition in Section 101.65(d) establishes parameters for use of the implied nutrient content claim “healthy” or related terms (such as “health,” “healthful,” “healthfully,” “healthfulness,” “healthier,” “healthiest,” “healthily” and “healthiness”) on the label or in the labeling of a food that was useful in creating a diet that is consistent with dietary recommendations, if the food meets certain nutrient conditions. Under the existing regulation, these conditions include specific criteria for nutrients that must be met in the food for it to bear such claims.