Despite the uncertainty, “natural” product claims matter to consumers. According to a 2015 Nielsen report, 53% of consumers surveyed said that an “all-natural” description was moderately or very important to their purchasing decision. The worldwide natural products industry is estimated at $33 billion – and it’s growing. “Naturally,” companies want to capitalize on this trend.
But what exactly is a “natural” product? Is it plant-derived? Is it made from ingredients found in nature? Is it free of preservatives? Is it made without synthetic ingredients? There are no FDA regulations regarding use of the word natural. However, the FDA has issued non-binding guidance that states it will not contest food products labeled as “natural” if the product does not contain added color, artificial flavors or synthetic substances. Though this provides a limited understanding of the term “natural”, the guidance is as to food, pertains only to FDA enforcement and is not a legal requirement.
In a recent complaint filed with FTC, California Naturel’s sunscreen was alleged to be not “all natural”, as it claimed, because 8% of it was Dimethicone, a synthetic ingredient. Following the FTC complaint, California Naturel put a disclaimer on its website, which was later ruled as ineffective in a 2016 FTC decision.
Starting in 2015, the Honest Company also found itself in court for false advertising in regard to their “natural” products. Though the Honest Company markets its products as “natural”, the products contain a number of synthetic ingredients. Consumers argued that their understanding of “natural” was a product free of synthetic or artificial ingredients, and the court held that the Honest Company’s “natural” claims for its products is misleading.
The current trend is that the surest way to avoid complaints when products are advertised as “natural” or “100% natural” is to make certain they are free of synthetic ingredients. Next to that, disclosure of what you mean by “natural” as used on your product can be an important measure to avoid consumer confusion.
Conkle, Kremer & Engel attorneys help their clients navigate these tricky currents by staying up to date on developments affecting the personal care products industry.
In September 2016, Conkle, Kremer & Engel attorneys filed a case on behalf of Moroccanoil against Zotos International, Inc. for trademark infringement by its “Majestic Oil” products. Just four months later, CK&E obtained a Preliminary Injunction against Zotos’ competing products, and within days the case was over.
A Preliminary Injunction is a powerful litigation tool that can immediately stop a defendant from selling products during the litigation. Securing a Preliminary Injunction at the beginning of the case often brings a prompt settlement, as the defendant must decide whether to settle or to fight over the product packaging that it cannot sell.
Getting a Preliminary Injunction can be challenging because the plaintiff must show that it is likely to win the case, and that it will be irreparably harmed if the defendant’s products are allowed in the market while the case proceeds to trial. Recently, courts have made Preliminary Injunctions tougher to get by raising the standards for showing irreparable harm.
In Moroccanoil’s case, the Preliminary Injunction prohibited Zotos from selling its Majestic Oil products in packaging that was confusingly similar to Moroccanoil’s distinctive trade dress. Zotos is a subsidiary of Shiseido America. Drawing on its knowledge of the beauty industry, CK&E’s presentation of irreparable harm to Moroccanoil’s reputation proved effective – the Court found that continued sales of Majestic Oil products would erode Moroccanoil’s premium position in the hair care market as a professional brand. The Court’s Order granting Moroccanoil’s Motion for Preliminary Injunction is available here, and is published at Moroccanoil, Inc. v. Zotos Int’l, Inc., 230 F. Supp. 3d 1161 (USDC C.D. Cal. 2017).
On the heels of the Preliminary Injunction, the parties settled the case with Zotos agreeing to pay a substantial portion of Moroccanoil’s attorneys’ fees and to drop the confusingly similar trade dress of the Majestic Oil products. In total, the case was fully resolved within 6 months of filing, and the only litigation activity was CK&E’s Motion for the Preliminary Injunction.
Mark contributes to the BIMA educational program by teaching modules on domestic and foreign intellectual property protection and international distribution agreements. Participants are particularly advised about cost-effective methods of protecting their intellectual property internationally, such as international trademark registrations through the Madrid System, which can offer a centralized application process for trademark registration in over 90 countries based on a brand owner’s domestic application or registration. Kim adds her expertise in domestic regulatory compliance, including Prop 65, California Organic Products Act (COPA), Safe Cosmetics Act, California Air Resources Board (CARB) regulations and survey requirements, and federal and state Made in the USA regulations.
BIMA is sponsored by Universal Companies, which has been in the beauty industry for over 18 years and is an important distributor of more than 300 brands in the spa, salon, esthetics and massage market, as well as their own proprietary brands.
In partnership with the California Trade Alliance (CTA), access to international trade shows are available to companies that participate in the BIMA programs. BIMA participants can exhibit in the popular California Pavilion regularly sponsored by CTA at Cosmoprof Bologna and Cosmoprof Hong Kong, among the world’s largest and most important beauty industry trade shows.
May 2016 Article in Beauty Industry Reports: Cosmoprof Bologna Sets Records
CK&E regularly works with clients to identify and protect their intellectual property both in the United States and abroad, and participates in industry conferences like INTA’s Annual Meeting and others to stay abreast of the developing issues affecting the firm’s clients.
Cosmoprof Bologna came to a successful close on March 21. The overall show statistics are not available yet, but participants in the California Pavilion experienced brisk business. The California Pavilion this year expanded to two islands with 18 exhibitors, and booths were often crowded with interested buyers. The CK&E lounge at the center of the California Pavilion buzzed with deal negotiations, and CK&E attorneys Mark Kremer and Eric Engel were glad to be able to lend their assistance to help participants expand their global reach.
Organizer Cesar Arellanes of California Trade Alliance commented that California Pavilion participants reported meeting or exceeding their goals for the show, expanding and strengthening their international business.
CK&E attorneys advise clients to prepare for major trade shows, particularly foreign shows, by verifying that they have taken all appropriate steps to protect their trademarks, trade dress and other valuable intellectual property, before problems arise. To help one well-prepared client, Mark Kremer successfully initiated an immediate takedown of counterfeit products being sold in another hall. CK&E attorneys attend major beauty industry trade shows to help protect clients’ brands, to keep current on trends, and to assist clients with the full range of legal skills needed to grow their businesses internationally.
Thirty-five California Pavilion participants began the event with a dinner to share ideas and stories. The group was glad to be able to use the occasion to celebrate the special birthday of Emilio Smeke, of Daily Concepts and AfterSpa. The California Pavilion has the unique position of being the only State Pavilion in the Hall of Country Pavilions, with a choice position adjacent to the USA Pavilion. The prominence of the California Pavilion is a fitting tribute to the strength and growth potential of the California cosmetics business and the leadership of Cesar Arellanes and Jake Rubenstein of California Trade Alliance.