Stay ADvised: Brand Protection & Advertising Law News

In This Issue:

• Plot Twist: NAD Agrees That Advertiser Makes Implied Claims of Improved Animal Welfare – But Finds Advertiser's Claim Is Substantiated
• Sometimes Voluntarily Discontinuing Challenged Claims Is a "Formula" for Success at NAD
• FTC Settlement With Company Peddling Deceptive Alcoholism Cure Is the Only Sobering Thing About This Product

Plot Twist: NAD Agrees That Advertiser Makes Implied Claims of Improved Animal Welfare – But Finds Advertiser's Claim Is Substantiated

The nonprofit organization Animal Welfare Institute (AWI) filed a challenge with the National Advertising Division (NAD) for review of an implied claim made by the company Where Food Comes From, Inc. (WFCF) for its "CARE Certified" certification seal. The CARE Certified seals are used on food products making animal welfare claims (e.g., BeefCARE).

AWI claimed that the seal and name of the program portray an implied message to consumers that animals raised under the certification program have better treatment and living conditions than conventionally raised animals. AWI also asserted that the certification program did not result in these improved animal welfare practices.

NAD agreed with AWI that the CARE Certified seal created the implied message asserted. NAD nonetheless found in favor of the advertiser because the CARE Certified standards exceeded the three relevant conventional animal raising welfare standards (Common Swine Industry Audit (CSIA), Pork Quality Assurance Plus (PQUA Plus) and Beef Quality Assurance (BQA)). For example, WFCF's CARE standards required worker training for cattle handling, chain of custody, and auditing methods well beyond those of BQA, PQUA and CSIA industry standards.

NAD also agreed with AWI that verification and auditing of conventional standards alone would have been insufficient to support the implied message conveyed by the certificate. However, NAD found that the CARE Certified program exceeds conventional standards and, importantly, includes audit and verification processes to ensure the elevated standards are met. NAD specifically found that audit and verification processes were relevant to consumers.

Notably, NAD found for the advertiser even though it agreed with the challenger that the message reasonably conveyed by the CARE logo was that the CARE seal exceeds conventional standards for the treatment of animals. NAD also agreed with AWI (over WFCF's objection) on what constitutes conventional industry standards for beef and pork production—i.e., that the BQA, PQUA and CSIA standards represent industry metrics. In the end, however, NAD determined that third-party certifiers using verified and audited standards—like the CARE Certified program—with requirements between conventional industry standards and the highest standards in the marketplace, are not inherently misleading.

Key Takeaway

It is not inherently misleading for companies to use a certification implying improved animal welfare standards, so long as the advertiser uses verified and audited standards, and the standards exceed the conventional industry standards.

Sometimes Voluntarily Discontinuing Challenged Claims Is a "Formula" for Success at NAD

Abbott Nutrition, the company behind popular baby food formula Similac, has voluntarily discontinued a claim challenged at the National Advertising Division (NAD) that it is the "#1 infant formula brand," which appeared on product packaging.

Challenger and competitor Mead Johnson & Co. LLC brought the matter before NAD under the expedited jurisdiction of the Fast-Track Single Well-Defined Issue (SWIFT), which accepts cases involving express and implied claims not necessitating the review of complex evidence.

Mead Johnson, maker of competing formula Enfamil, challenged the claim that Similac is the "#1 infant formula brand" whether based on sales or doctor recommendations—the claim itself did not specify, albeit it appeared in some formulations with a caduceus.

Because of Abbott's voluntary discontinuance during the pendency of the action, NAD closed the case without a review on the merits, albeit for "compliance" purposes it will be treated as if NAD had reviewed and found the claim wanting. But, on what grounds? Did Abbott mean a sales claim, a doctor-recommended claim, or both?

Abbott said it had decided to discontinue the claim voluntarily as part of its "process of routinely reviewing and updating its advertising." Abbott further reserved the right to revise its claims based on "currently available data."

Key Takeaways

Given the claim was on packaging, it is somewhat surprising Abbott gave up without a fight. Should the claim resurface, Abbott will presumably be clear on what basis it makes its claim—assuming it has sufficient "available data" at some point in the future. Voluntary discontinuance now may have the effect of allowing the advertiser to live to fight another day. Only time and a compliance action will tell.

FTC Settlement With Company Peddling Deceptive Alcoholism Cure Is the Only Sobering Thing About This Product

A company marketing a sham treatment for alcohol addiction has agreed to settle the allegations that its advertising for Sobrenix was bogus.

The FTC's complaint alleged that Rejuvica LLC and its owner-officers Kyle Armstrong and Kyle Dilger orchestrated an advertising campaign that made unsubstantiated representations and promoted deceptive endorsements on television and on fake review websites.

Rejuvica and company sold the $34 bottle of kudzu, milk thistle seed and other herbs and vitamins as Sobrenix, which the officers claimed would reduce or eliminate alcohol cravings and manage alcohol consumption.

From 2017 to 2021, Sobrenix was marketed as a miracle cure-all for alcohol addition despite FTC concerns. The Kyles and Rejuvica made claims that Sobrenix reduced or eliminated alcohol cravings and helped "successfully manage alcohol consumption." Advertisements claimed that consumers could take the product before drinking to "help you stop before you've had too much," and that the supplement was "designed to reduce alcohol consumption."

According to the complaint, Rejuvica also hired a public relations firm to air false endorsements of the supplement. An alternative health "expert" and a board-certified nutritionist endorsed Sobrenix and touted the (unsubstantiated) benefits of the product on television without disclosing their material connection to the company and that they were being compensated for their generous opinions. The FTC averred that the defendants created multiple fake websites whose raison d'etre was to publish fake reviews of Sobrenix amplifying the claims it was effective at cutting down alcohol cravings.

The FTC alleged violations of the FTC Act and the Opioid Addiction Recovery Fraud Prevention Act (OARFPA).

Key Takeaways

This case signals the FTC is looking to utilize the OARFPA as additional muscle to pursue false advertising of addiction cures.