2. AGENDA
¤ 2nd in a series
¤ Basic guidance- building awareness
¤ Representations/Warranties
¤ Advertising and Marketing
¤ Disease/Health Claims
¤ Testimonials
¤ Options: DIY or Seek Support
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3. DISCLAIMER
This Workshop is a resource for educational and informational
purposes only and should not take the place of hiring an attorney.
Using this material and the legal resources referenced herein, paid
and free, does not create an Attorney-Client relationship between
you and Xonna Clark, Esq. Customized legal advice is not provided
within this workshop or any of the resources available here. Instead,
this workshop is a legal education resource designed to make you
aware of basic key legal needs of your business and provide
information you can use to meet those needs. Legal Care for
Wellness Care is an educational company and not a law firm and
not a replacement for hiring an attorney.
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Not Distribute
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4. › July, 2014 multimillion dollar settlement against a
beverage company for making “unsubstantiated health
claims.
› Product contained pineapple, agave, grape seed,
beet juice powder, and orange juice.
› Claimed that it was an anti-inflammatory wellness
drink and effective for a host of conditions
› Referenced 3rd party literature-- insufficient
(Overhype and Subpar Science: A Prickly Pair, business.ftc.gov)
› Several students at MUIH have had cease and desist
orders and have had to shutdown websites and blogs
Why Important?
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5. The Risk --Services and Products
As integrative practitioners, we offer a service, BUT
we may also develop and offer a product:
• Foods
• Herbal products
With Both our Services and Our Products,
We Make Statements !
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6. What Counts As Statements?
› Verbal
› Written
› Marketing materials, letters, emails, labels,
literature, testimonials
› Symbols, Pictures, Logo
› These statements may constitute
› Representation or warranty
› Health or disease claim
› Structure/Function claim
› Dietary Guidance
Each case is specific
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7. Knowledge of the Law Can
Help Prevent
¤ Cease and desist orders
¤ Website/blog shutdowns
¤ Civil remedies/lawsuits
¤ Monetary liability
¤ Consumer re-dress
¤ Other corrective measures
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9. Representations/Warranties
¤ Express/Implied (Products and Services)
¤ Express -by promise, description, or sample
¤ Key is “context” and “basis for bargain”
¤ No need for formal words
¤ Example: My herbal rinse prevents colds
¤ Implied- indirect or by inference “context”
¤ Fitness for a particular purpose
¤ Workmanlike quality
¤ Merchantability
¤ Example: My herbal product kills germs
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10. Disclaimers
¤ Some warranties can be disclaimed BUT
¤ Need proper legal language and placement
¤ Work with an attorney on your disclaimer language; is
case specific- boilerplate does NOT work.
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11. Marketing/Advertising
¤ Applicable Laws: FTC, State and Local,
¤ On State level, also look at Professional Scope of
Practice
¤ Law Covers Claims in Promotions, off and on line
¤ Are Specific Additional Laws for Internet Advertising
¤ Close Ties to FDA: similar concepts
¤ Today’s Focus: Mostly on FTC/FDA; state/local law similar
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THE LAW
¤ Truthful and Non-Deceptive
¤ Evidence to Back up Claims
¤ Cannot be Unfair
¤ Reasonable Consumer Standard
12. What is a Claim?
¤ Governed by:
¤ FTC for promotions (off an on line)
¤ FDA for labeling and point of sale literature
¤ Similar standards, so good to know and apply even
though current status may be a start-up or small
¤ Law applies to foods, dietary supplements, general
labels and promotional materials
¤ Especially good to know for anyone offering a food
or dietary supplement product
¤ Are some limited exemptions for small businesses but
are very specific
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13. Types of Claims
¤ Health/Disease Claims: refers to a relationship between a
specific substance (nutrient or dietary ingredient) and a
disease or health condition
¤ Example: Calcium prevents arthritis
¤ Must be reviewed by FDA/FTC in advance
¤ Structure/ Function Claims: refers to a specific substance
and structure/functions of the body
¤ Example: Calcium helps build healthy bones
¤ Do not need to be reviewed by FDA/FTC but can be
scrutinized
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14. Dietary Guidance:
¤ Contains only 1 of the 2 elements (specific substance
or structure/function or health/disease reference)
¤ Typically refers to a food or category of foods, not a
substance
¤ Example: Carrots are goof for your health
¤ Example: Calcium is good for you.
¤ Example: Whole grains can reduce the risk of several
chronic diseases.
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Types of Claims-cont.
15.
Nutrient Content Claims:
¤ Characterize the level of a nutrient in a
food
¤ Example: gluten free (new stricter
guidelines)
¤ Example: low fat
¤ Exception: Claims can be made about
nutrient deficiency diseases or that
describe the effect on general
wellbeing
¤ Example: Vitamin C and Scurvy
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16. So What Does It All Mean?
(truthful and not deceptive, substantiated, not unfair)
¤ Deceptive- “if contains a statement or omits
information that is likely to mislead consumers
acting reasonably under the circumstances
and is material to consumer’s decision to buy”
¤ Looks at words, pictures, phrases
¤ Looks at express and implied
¤ Looks at what is not said- misimpressions
¤ Looks at materiality
¤ Performance, price, safety,
effectiveness DEEMED material
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17. Examples
¤ Example: 2-3 Doctors recommend X—must have
documented proof
¤ Example: University studies prove that X herb can
improve athletic performance
¤ Must have the studies
¤ Is an inference that studies are methodologically
sound
¤ Example: 90% of cardiologists take this product
¤ Express: % of cardiologists who take the product
¤ Implied: Product offers some benefit to the heart
(FTC Dietary Supplements, an Advertising Guide)
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18. Sometimes, Even Claims That Are Normally
Acceptable As Structure/Function Claims
Can Be Problematic
Example: Ad for herbal supplement claims product
boosts immune system to help maintain a healthy nose
and throat during the winter BUT name is Cold Away
and pictures feature people sneezing and coughing
› In context, conveys product helps prevent colds
› Law requires substantiation of the claim
› Even without the product name and images, the
reference to nose and throat health during the winter
may still convey a cold prevention claim
(FTC Dietary Supplements, an Advertising guide)
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19. Example: An ad for product called “Arthricure” claims
that product maintains joint health and mobility in old
age. The “before” picture shows an elderly women using
a walker. The “after” picture shows her dancing with her
husband.
¤ The images and product name likely convey that the
product is effective in the treatment of the symptoms
of arthritis, and may also imply that the product can
cure or mitigate disease.
(FTC Dietary Supplements, an Advertising Guide)
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20. Can’t be Misleading
Can be deceptive because of what it fails to say.
¤ Example: An advertiser for weight loss cites a placebo
controlled double-blind clinical study as demonstrating
that the product resulted in an average weight loss of 15
pounds over 8 weeks.
¤ The advertisement should make clear that users must
follow the same diet and exercise regimen to achieve the
claimed weight loss results.
(FTC: Advertising Guide for Small Businesses)
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Disclosures must be clear and prominent
21. Must be Substantiated
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¤ Depends on Nature of the Claim
¤ Guiding Principle: the amount and type of evidence
that experts in that field would consider adequate
¤ Must have “reasonable basis” and “objective
evidence”
¤ FTC plays close attention to health and safety
claims, especially diet services and products
22. Testimonials/Endorsements
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¤ Watch testimonials—health claims can be
conveyed through testimonials
¤ Consumer endorsements themselves are not
competent or reliable scientific evidence
¤ Need the science to support
¤ Can’t be any material connection between
endorser and marketer
23. Takeaways on Promotional
Material
¤ Must be truthful, not misleading and substantiated
¤ Pay attention to overall context, not just words
¤ Pictures, Phrases, Name and suggestions count
¤ Must disclose relevant information so not
misleading
¤ Make sure supporting evidence is
¤ Scientifically sound
¤ Adequate in context
¤ Relevant
¤ Also consider State’s scope of practice
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24. Xonna Clark, Esq.
Contact Xonna Clark, Esq. 704-516-6973
xonnaclark@gmail.com
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¤ DIY Support Package- $250 (for appropriate services)
¤ Consultations:15 minutes-free/ $125 per 30 minutes
¤ Webinars-$50/session:
¤ 10 Steps to Legally Set Up Your Business
¤ Legal Agreements You Need
¤ Trademarks/Copyrights
¤ Marketing-What Can I Say
¤ Service Retainer: special package rates
Referrals Welcomed
25. References
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FTC.gov
FDA.gov
Business.ftc.gov
DHHS: Dietary Supplements: Structure/Function Claims Fail to Meet
Federal Requirements
FTC; Advertising Guide to Small Businesses
FTC: Dietary Supplements: An Advertising Guide to Industry
FDA: Food: Guidance for Industry: Structure/Function Claims, Small
Entity Compliance Guide
