Glue Company in Sticky Situation with FTC over “Made in the USA” Advertising Claims—Who Will Get Stuck Next?
In a recent post, we discussed the potential perils and pitfalls of advertising consumer products as “Made in the USA.” As we noted there, different federal and state regulatory regimes do not necessarily follow the same standard on when something can be deemed “made” here. This legal patchwork means that product manufacturers and resellers of those products need to be cautious and diligent about their use of this patriotic moniker.
The Federal Trade Commission is active in this space and has published a variety of references on the topic, including its Enforcement Policy Statement on U.S. Origin Claims (the “FTC Statement”). According to the FTC, “all or virtually all” of the product in question must have been made in America before a product can be advertised as “Made in the U.S.A.”
Recently, the FTC’s “Made in the USA” enforcement regime seems to have focused on companies offering goods or services with broad consumer appeal. For example, in 2013, the FTC brought an enforcement action against a consumer products company selling items such as iPhone accessories, bottle holders, dog collars, and various outdoor accessories that were falsely marked as “Made in the U.S.A,” or “Truly Made in the USA.” In 2014, the FTC initiated an action against a company that licensed a “Made in the USA” certification seal to any licensees so long as the licensees “self-reported” that they complied with the FTC Statement. In both of these cases, the claims had the potential to affect a broad swath of consumers as a result of the improper “Made in the USA” designation.
A federal complaint filed last week by the FTC may signal a broader focus by the FTC when it comes to “Made in the USA” clams. In the complaint the FTC asserts that an Ohio-based company improperly used the “Made in the USA” designation. What’s the product, you ask? Cell phone covers? Coffee mugs? Jeans? Actually, it’s none of the above (as you may have surmised from the title of our post). The accused product is none other than “cyanoacrylate glue,” or what is more commonly known as “super glue.” According to the allegations in the rather brief complaint, the Defendant sells its epoxy products to consumers, as well as to those in the medical and industrial fields. The goods are marketed and sold with American flag imagery and statements such as “Proudly Made in the USA.” The issue, according to the FTC, is that “55%” of the costs of the “chemical inputs” are attributed to imported chemicals. Thus, the constituent parts of the glue are not “all or virtually all” from the USA, thereby violating the FTC policy.
So, what should we make of this complaint? If nothing else, it is a good reminder that the FTC is active in policing the market for Made in the USA advertising claims, regardless of how “glamorous” or “glitzy” the product. If you (or your client) is making Made in the USA advertising claims, it might be a good idea to consult the FTC Statement in order to avoid any sticky situations.
