Made in USA

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Made in USAEarlier this month, Venable reported on the Trump administration’s intent to make the federal government’s procurement preference for domestic products (i.e., the body of “Buy American” laws that have been around in some form or another since 1933) even “more muscular” by moving forward with a “new policy” that is “based on the twin pillars…

By V4711 (Own work) [CC BY-SA 3.0], via Wikimedia Commons
By V4711 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

On February 1, 2016, the Federal Trade Commission (FTC) filed an action against Chemence, Inc., an Ohio-based manufacturer, advertiser, and distributor of cyanoacrylate glues (often referred to as “superglues”). In its complaint, filed in the United States District Court for the Northern District of Ohio, the FTC alleges that Chemence is deceiving consumers by claiming that all, or virtually all, of its glue products are American-made. Chemence’s glue products, which include Kwik Frame, Kwik Fix, and Krylex, purport to be “Made in the USA” or “proudly made in the USA.” According to the FTC, these claims are unqualified, and thus deceptive, since a “significant proportion”—approximately 55%—of the chemical components in Chemence’s glues are attributable to imported chemicals essential to the way the glues function.

The FTC also claims that Chemence provided the “means and instrumentalities” for others to deceive consumers through its unqualified Made in USA claims by providing deceptive promotional materials to retailers for use in marketing the glues. The complaint asks the court to issue an order permanently prohibiting Chemence from making deceptive Made in USA claims and seeks other relief, including monetary relief and rescission or reformation of contracts.Continue Reading Working Toward a Cohesive Approach to “Made in USA” Claims

We love a good March Madness legal blog (see here and here and here)  and NAD gave us some great fodder this month deciding a case between two large daily fantasy sports league websites.   This one wasn’t exactly an upset like so many of the games this year leading to the Sweet 16.   DraftKings claimed it was the “largest US-based destination for daily fantasy sports.”  FanDuel cried foul.  There was no dispute that FanDuel is larger by a significant margin.  The issue was whether the company was US or non-US based, the key factor which would render the claim either literally true or literally false.  This case is a riff on Made in USA analysis.  Instead of focusing on where a good is manufactured, including its component parts, this case looked to the right definition for determining where a corporation is based.  The NAD noted that consumers “often care very much about the domestic nature of products that they purchase, and such sentiments are likely to also be felt about services that they patronize.  For example, for consumers concerned about unemployment in the United States, the fact that a competing company’s labor force resides in another country may be quite important when deciding which company’s website to patronize.”  As an aside, we are not so sure there are consumers who would base a purchase decision on where key executives sit or where key corporate decision are made, as opposed to where a company’s employees reside.  That said, there is certainly an advantage in claiming to be the largest or No. 1, as it may well convey a message that a company has passed the test by rising to the top in terms of market share.   And it is not unusual for a company to try to create a category in which it can be the champion.  NAD said such a claim is particularly impactful in this case because “consumers are attracted to ‘larger’ daily fantasy sports websites because they have larger pools of players and prizes.”
Continue Reading Fantasy League Competitors Battle on the NAD Court for Decision Over Who Can Claim “Largest US-Based Website”

The Better Business Bureau (BBB), known for being the home of NAD, CARU and other advertising self-regulatory forums, is now also the proud owner of an updated advertising code.  The BBB announced earlier this month significant updates to its Code of Advertising for the first time since 1985 (when the number one single was “Careless Whisper” by Wham.)

In a press release, the BBB indicated that changes to the Code were made “to reflect the many new ways that advertisers reach consumers via websites, social media, texting and other channels.”
Continue Reading BBB Updates Advertising Code to Keep Pace with Technology

Made in the USAWith the holiday season in full swing, marketers are tirelessly seeking ways to convince you that their product is the perfect gift for everyone on your holiday list.  Although the bearded man of the hour at this time of the year is, of course, Santa Claus, many sellers try to ensure a competitive advantage by invoking the spirit of another hirsute man:  Uncle Sam.  But if you’re thinking about abandoning a red and green color scheme this year for red, white, and blue and plastering your products with “Made in the USA” or “American Made,” some recent California litigation reminds us that sellers should be careful when they feel the patriotic spirit overtaking the holiday spirit.

As we have noted several times previously on this blog, “Made in the USA” claims are tricky animals that can come back and sneak up on you like a whack from the stick-bearing Krampus (the nasty European sidekick to Santa Claus best known for walloping children with bundles of birch branches).  The Federal Trade Commission (“FTC”) has been active in this area, bringing a number of cases over the years to enforce its standard that to be able to make an unqualified  “Made in USA” or “Our products are American made” claim, without any limits or qualifications, a product must be “all or virtually all” made in the U.S., i.e., all significant parts that go into the product must be of U.S. origin and all processing must take place in the U.S.  The FTC guidance in this area has made it clear, however, that truthful qualified “Made in USA” claims, such as “Made in USA of foreign and domestic parts” or “Assembled in USA of parts from China” are permitted.Continue Reading ‘Tis the Season–for “Made in the USA” Claims

Made in the USAIs the “surf up” again in California for “Made in USA” class actions?  A prior wave of “Made in USA” class action litigation in California crashed up against a number of legal difficulties, including how one calculated damages for buying a product “mislabeled” as “Made in USA.”  However, the California Supreme Court in the Kwikset case ultimately resolved this issue largely in plaintiffs’ favor.

Now a class action complaint has been filed on June 9, 2014, against designer jean company Citizens of Humanity (“COH”) and Macy’s Inc. (“Macy’s”) which alleges that the jeans were falsely labeled as “Made in USA” when, in fact, many of the components were imported.  This follows on the heels of a settlement in a class action filed earlier this year against Lifetime Products, Inc. and The Sports Authority, Inc. for allegedly misusing the “Made in USA” label on basketball products.  Defendants agreed to a permanent injunction and to provide gift cards or a basketball to each class member ranging in value from $12.50 to $30 and to make annual charitable contributions of $325,000 over a five-year period.Continue Reading Designer Duds? Class Action Alleges a “Made in USA” Fashion Faux Pas