Cargill Health & Nutrition, the maker of TRUVIA sweeteners, recently brought a false advertising challenge against its competitor Cumberland Packing Corp. over Cumberland's use of the product name STEVIA IN THE RAW. See Cumberland Packing Corp., NAD Case Report No. 5525 (November 29, 2012). Cargill brought the challenge before the National Advertising Division, a self-regulatory program administered by the Better Business Bureau. According to Cargill, STEVIA IN THE RAW conveys a literally false message to consumers that the product is comprised solely of stevia, a naturally-occurring sweetener. In fact, STEVIA IN THE RAW is comprised of approximately 5% stevia and 95% "bulking agent" – i.e., corn-based carbohydrates added to the intensely sweet stevia to yield serving sizes comparable to table sugar.
Unlike most false advertising disputes before NAD, in which one party challenges claims in print or television advertisements, here Cargill was challenging the name of the product itself. Cargill argued that the phrase IN THE RAW misleads consumers into believing that stevia is the only ingredient because "raw" is commonly understood as meaning "not diluted or blended" and "in the raw" is commonly understood as indicating that something (in this case stevia) is "nude" or "naked". According to Cargill, the false message was reiterated by Cumberland through its inclusion of stevia among its line of IN THE RAW brands – i.e., SUGAR IN THE RAW and AGAVE IN THE RAW, each of which contains only a single ingredient.
While NAD has previously recommended the discontinuance of product names that communicate a false message (as discussed here, NAD makes findings and recommendations, but it does not enforce its own decisions. Parties are responsible for adhering to NAD's recommendations, and failure to do so can result in a referral to the Federal Trade Commission), it "does not make such recommendations lightly and only does so after due consideration of the likelihood that an express false message is conveyed." Id. at 7. NAD will generally recommend that an advertiser change the name of a product under one of only two circumstances: (1) where the product name communicates an express, unambiguous claim that is false or (2) where the claim, though reasonably susceptible to more than one interpretation, is shown through consumer perception surveys or other extrinsic evidence to have confused or misled consumers. Id. at 7-8.
Cargill relied primarily on the first prong, arguing that message conveyed by the product name was unambiguous and false, but NAD cited to various dictionary definitions of "raw" and found that the term was "amorphous and subject to more than one interpretation." Id. at 8. For example, NAD cited definitions of raw that focused on a product's "being in or nearly in the natural state" or "not processed." NAD contrasted STEVIA IN THE RAW with ALL-DAY ENERGY, a product name that NAD previously found misleading because the phrase ALL-DAY expressly communicated that the product would last "all day or at the very least 8 hours." Id. As for Cargill's contention that Cumberland's inclusion of the stevia product in its IN THE RAW line misled consumers, NAD disagreed, finding instead that promotion of STEVIA IN THE RAW as part of the IN THE RAW family merely trades on the goodwill of Cumberland's trademarks.
Although Cargill's emphasis appears to have been on showing express falsity, it also offered evidence of actual consumer confusion—two online customer reviews complaining that the IN THE RAW description was misleading. However, NAD found that these reviews were insufficient evidence of consumer perception, implying that a more robust and methodologically sound consumer perception survey would be required to demonstrate that an ambiguous claim was misleading to consumers.
There are several key takeaways from this decision for advertisers. First, claims are not limited to ad copy; product names themselves can be claims, and failure to substantiate those claims can lead to trouble. Second, while NAD seems to disfavor recommendations to discontinue a product name, history has shown that it will recommend discontinuance where the product name is reasonably susceptible to only one meaning. Finally, if you believe that consumers are likely to be misled by your own or your competitors' product names, consider a consumer perception study as part of your overall marketing strategy. Such a study can be a powerful tool to challenge your competitors' product names and to blunt any challenge brought by your competitors against you.
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