Coca-Cola – The Fashion Industry Law Blog

In my last post, I offered some of the history of the Brooks Brothers brand provided to me by Arthur Wayne, Vice President, Global Public Relations, during a recent visit with him at the company’s headquarters in New York. Having been to Brooks Brothers stores from Milan to London and beyond, I asked if the styles, brand names and trademarks appurtenant to them were used consistently throughout the world.

“When Claudio Del Vecchio bought the company, in 2001,” explained Mr. Wayne about its Italian owner, “he already ‘got’ the brand. The first thing he did was undertake a comprehensive product review. Under its prior owners, the company wasn’t really looking in its own garden—for quality of construction, tailoring—the core elements of the brand.” Mr. Wayne noted that, in the mid-to late 90s, there was much talk that casual Friday would be the death of tailored clothing, and the result at Brooks Brothers was that too many items were inexpensively made—something that is possible to accomplish credibly with fast fashion but is not possible to do stylishly with most tailored clothing.

“Claudio approached the brand as a customer,” continued Mr. Wayne. “His thinking has always been, ‘If I feel this way about what I am seeing, others must, too.’ He brought back quality tailoring and made sure the stores have a consistent Brooks Brothers look. The review was a long process and not everything was changed, but the initiative made us ready for the next challenge: brands are now in their customers’ hands.”

That was elegantly put and it shows the current problem faced by all brands and their lawyers: a brand in its legal form is its portfolio of trademarks, along with other intellectual property rights. And a trademark is above all an identifier of source of origin. If you see the trademark COCA-COLA on a soda bottle, that means it comes from Coke, not Pepsi—and so on. If someone else uses your mark, you take legal action to prevent that or risk potentially losing control of the mark and its registrations.

But how do you accomplish that in the age of social media, when consumers get to rate a brand’s offerings down to individual products—and when the brand feels obligated to post negative consumer reviews of those products on the very website where it is trying to sell them—and when it must deal as well with influencers, who can influence whosoever they please, on their own terms? Those forces can alter the perception of where a brand stands, rather as the gravity of the sun bends the approaching light of a distant star, changing the perception of the position of that star. Brooks Brothers partners with influencers, and it features two of them—one American and the other Polish—in its anniversary edition of its house lifestyle magazine. It is all about what Mr. Wayne calls, “the importance of creating a dialogue with your customers. This is what matters to them.”

What is a fashion lawyer to do with all these new forces and new demands? In the third and final post in this series, we will consider some contemporary lessons for international branding.

Credit: Alan Behr

Why is a can for Minute Maid juice like a coat? The answer: Because federal statutes and government regulations prescribe how each is labeled. In the case of juice, the label is prescribed by the U.S. Food and Drug Administration (FDA) regulations promulgated under the Nutritional Labeling and Education Act of 1990. In the case of the coat, as apparel manufacturers are all too aware, by the Federal Trade Commission (FTC) under either the venerable Wool Products Labeling Act of 1939 or the Textile Fiber Products Identification Act. The regulatory schemes share ostensibly the same goal: to assure a uniform national standard and to inform consumers of the content and the qualities of the goods. But what if prescribed rules do not further that purpose?

That is a question posed by a case that the Supreme Court heard on April 21, 2014 Pom Wonderful LLC v. The Coca-Cola Company. Pom’s business revolves around marketing beverages featuring pomegranate juice. Coca-Cola, wishing to cash in on the craze for such beverages, introduced a Minute Maid juice it called “Pomegranate Blueberry.” Notwithstanding the name, pomegranate juice constituted only 0.3% of the contents, and blueberry only 0.2%. The 99.4% of the contents which consisted of apple and grape juice was uncredited in the product name and the graphics decorating the label. Pom sued, claiming that the name “Pomegranate Blueberry” constituted false advertising and unfair competition, as consumers would naturally infer that the product’s main ingredients were pomegranate and blueberry juices. Unfortunately for Pom (and, one might add, for consumers seeking the health benefits of pomegranates and blueberries), FDA regulations specifically permit naming a product for ingredients so minor that they could be described as no more than flavoring.

So, now, the Supreme Court will decide whether a competitor can sue for false advertising and unfair competition when the contents of a label are authorized (or sometimes even required) by government regulations, no matter how misleading. In the language of the law, do the specific provisions of federal labeling law preempt federal and state laws that more broadly and generally protect consumers and competitors from deception as to the contents or quality of the goods?

Should the Court find for Pom, attention will have to be given not only to technical compliance with legal requirements, but also to whether consumers are likely to be misled. One might think Coca-Cola has the better argument. After all, if your labels comply with federal regulations, you should not have to worry about what consumers think. If there is a problem, the fault lies with the government and its regulations. But that conclusion might be wrong. Some of the justices appeared to view the labels as very misleading. Others wondered whether the FDA considered anything other than health and safety in promulgating the regulations and questioned whether assuring that consumers are not misled was the responsibility of the FDA.

Of course, that is the responsibility of the FTC and it is the purpose ostensibly served by the FTC labeling rules for textiles. But even under the FTC rules, you can name your line of sheets “Bamboo,” as long as that is just the name and the fine print on your label states that the fabric is rayon made from bamboo fibers. After all, this is consistent with a regulatory scheme that requires you to state the country of origin of a coat but not that of vitamins or toothpaste.

Credit: Helene M. Freeman