Monthly Archives: July 2016

A Crash Course In Dietary Supplement Law For Online Marketers

dietary supplement law

The dietary supplement business is booming. Thanks to plug-n-play e-commerce engines like Amazon, folks are flocking to establish foot holes in the niche. But the industry is not without its headaches. Let’s take three minutes to review some legal issues germane to the space.

Dietary Supplement Law Tip #1: Mind The DSHEA

In 1994, after several failed attempts, U.S. politicians passed the Dietary Supplement Health and Education Act. Its purpose? DSHEA legally defines “dietary supplements” and delineates labeling and logistical parameters for the industry.

Why Some People Hate DSHEA

A notoriously controversial law, opponents say it favors dietary supplement manufacturers and allows for dangerous products to hit shelves without sufficient testing.

Important Takeaways from the DSHEA

  • Dietary supplement is legally defined as “a product taken by mouth that contains a ‘dietary ingredient’ intended to supplement” one’s nutritional intake. Dietary ingredients may include: vitamins, minerals, herbs or other botanicals, amino acids, and substances such as enzymes, organ tissues, glandulars, and metabolites. Dietary supplements can also be extracts or concentrates, and may be packaged as tablets, capsules, softgels, gelcaps, liquids, or powders.
  • DESHEA exempts tobacco as a dietary supplement.
  • Dietary supplements are categorized as food, except for the purposes of drug definition.
  • The following items must be included on dietary supplements:
    1. Ingredients (w/ amounts);
    2. Intended Use (all intended use claims must be based on accepted scientific evidence);
    3. Safety Information (including contraindications, side effects, possible reactions and interactions);
    4. Use Instructions (proper dosage and other ingestion guidance);
    5. Company Information (manufacturer, production source and batch info)
  • Different rules apply for ingredients and supplements released before 1994 and those released after, though the variants are too nuanced for this article. If you think your dietary supplement product may have a release-date-related issue, explain your exact situation to an attorney who can point you in the right direction.
  • A whole lot of people despise DSHEA because they feel it gives dietary supplement companies carte blanche to endanger the public. On the topics, a famous naysayer famously opined: “The deal that DSHEA and NCCAM made with the public was this: Let the supplement industry have free reign to market untested products with unsupported claims, and then we’ll fund reliable studies to arm the public with scientific information so they can make good decisions for themselves. This “experiment” (really just a gift to the supplement industry) has been a dismal failure. The result has been an explosion of the supplement industry flooding the marketplace with useless products and false claims.” – Steven Paul Novella, prominent skeptic and clinical neurologist

Dietary Supplement Law Tip #2: Vet Suppliers Like Your Financial Security Depends On It (Because It May)

The first step to dietary supplement millions is vetting. A whole lot of it. Especially when dealing with overseas manufacturers. Remember, a factory in China (or most places outside of the U.S.) is under no obligation to observe U.S. standards.

And here’s the truly tricky part: some foreign suppliers will feign compliance to get a job. When it happens, cost-effective legal resources are few and far between. Bottom line: don’t trust a supplier’s word. Vet, vet, vet!

And here’s the truly tricky part: some foreign suppliers will feign compliance to get a job. When it happens, cost-effective legal resources are few and far between. Bottom line: don’t trust a supplier’s word. Vet, vet, vet!

So, how do you dodge shady manufacturers? If possible, hook up with an inspector in the manufacturing country. Have him or her do on-site visits; boots-on-the-ground due diligence. Moreover, it’s a plus to have a “translator” on your side. After all, as they say, a lot is lost in translation — both linguistically and sometimes culturally.

Dietary Supplement Law Tip #3: Comply With FTC Marketing Regulations

Think of the Federal Trade Commission as America’s consumer watchdog. If you market to U.S. residents, you’re beholden to FTC regulations and guidelines.

And though the dietary supplement industry is semi-self-regulatory, brands can’t ignore industry standards. To that end, marketers have developed various dietary supplement disclosures to protect against FDA and FTC actions, the most popular being:

“This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.”

Dietary Supplement Law Tip #4: Comply With FDA Standards

Dietary supplements are ingestibles, which means sellers must keep up-to-date on Food and Drug Administration rulings and decrees. Maintaining can be difficult because the list of banned substances is ever-changing.

To avoid an FDA action, keep up-to-date with the latest standards. How?

  • Set up Google alerts for ingredients contained in your dietary supplements; spend a half hour a day reading through them. If something pops up, take action ASAP.
  • Partner with a dietary supplement lawyer. He or she can be your regulatory watchdog and alert you of upcoming changes. Moreover, attorneys may be able to help tweak your business model to increase your profit potential (and asset protection).
  • Take 2 minutes a day to check out the FDA’s website. Whenever the agency takes action, a notice is posted online.

Dietary Supplement Law Tip #5: Consult Professionals About Structure-Function Claims

The FTC and Attorneys General — a.k.a., the people who can sue for “unfair and deceptive marketing” — are super sensitive about structure-function claims. So, what’s a structure-function claim, you ask? Basically, it’s any statement that addresses how a product affects the body. Classic structure-function claims include:

  1. “Calcium builds strong bones.”
  2. “PRODUCT X helps reduce cancer.”
  3. “St. John’s Wort minimizes anxiety.”
  4. “WEIGHT LOSS PRODUCT will naturally reduce your appetite.”

Marketing campaigns that include structure-function claims should always be audited by an attorney before launch. Why? Because if you cross the compliance line, you may be saddled with a huge fine.

Who Can I Call With My Dietary Supplement Business Questions?

Kelly Warner helps clients overcome e-commerce issues. We’re a team of top-rated attorneys, techs and marketing aficionados who’ve assisted scores of online sellers with everything from FTC compliance to listing hijackings. Head here to the online marketing / e-commerce law section of our website. If you’re ready to speak with a dietary supplement law fixer, get in touch today.

Dietary Supplement Law: Court Says Re-seller Is Counterfeiter

dietary supplement law
A recent dietary supplement law conflict will likely affect similar cases in the future.

Dietary supplement counterfeit claim news: A judge awarded 5-Hour Energy — an over-the-counter drink sold at Walgreens or CVS — over $20 million dollars after third-party distributors took liberties with the brand’s labeling.

Anyone involved in the sale or marketing of supplements should take 3 minutes to read about this case. It’s serves as a reminder that hyper-aggressive sales tactics can decimate profits.

Dietary Supplement Law: Counterfeit Dispute

5-Hour Energy usually reaches store shelves through re-sellers and third-party marketers. The lawsuit we’re about to discuss involved one such deal that went awry.

In 2009, Living Essentials granted a small California business the exclusive distribution rights for Mexico. New packaging and labels tailored to Spanish-speaking consumers — plus discounted stock options — were all part of the deal.

What went wrong?

Well, according to Living Essentials, the pair initiated a scam that involved:

  • Selling the Spanish-labeled products at higher prices than the English-labeled products, in the United States instead of Mexico;
  • Selling its supply to U.S. distributors who replaced the 5-Hour Energy label with their own brands’ labels.

Did The Distributor Break A Contract By Reselling Products?

Living Essentials (LE) felt their Mexico distribution partners were violating parts of the Lanham Act. As far as LE saw it, the defendants knowingly produced fake goods at Living Essentials’ expense.  The defendants, conversely, insisted that they operated within the contract’s bounds.

And it’s with those viewpoints that the two parties embarked down Lawsuit Lane.

Now, as far as dietary supplements go, 5-Hour Energy is a huge player, so the legal battle fell into the “high-profile” category. And we all know what high profile lawsuits look like: protracted, nuanced and teeming with motions. This particular case lasted four years and involved fastidious vendor investigations, counterfeit-related court orders, and jurisdictional changes; plus, the defendants clawed deep during appeals, involving over 70 different entities.

Court Makes Dietary Supplement Law Ruling: Distributor Didn’t Have Resell Rights

Ultimately, the plaintiffs, Living Essentials, won this dietary supplement counterfeit case. In a 94-page opinion, the court explained how the defendants violated the Lanham Act by running a private label side business that contravened the original distribution contract. Interestingly, the Court also laid blame at the feet of a convenience store that sold the re-branded products and ordered it to pay part of the damages.

Dealing With Dietary Supplement Law Issues?

Our firm helps private label sellers and marketers with dietary supplement law issues. We answer questions, write contracts, help clients defend themselves against FTC investigations, represent counterfeit victims, and sort out listing hijackings.

To put it simply: We resolve issues that plague online marketers and sellers.

To learn more about our firm, head here. Ready to consult? Head here.

International Defamation: China’s Strict Internet Publication Law

International defamation Law
A new Chinese law could affect international defamation cases.

Chinese officials adopted a new online publication law. When asked about the statute, President Xi Jinping opined:

“China must improve management of cyberspace and work to ensure high-quality content with positive voices creating a healthy, positive culture that is a force for good.”

What You Need To Know About China’s New Internet Publication Law

  • Called the Online Publishing Service Administrative Rules, the new law went into effect on March 10, 2016.
  • “Internet publication” is vaguely defined; anything posted online could, theoretically, fall under the statute’s reach.
  • The law established a departmental hierarchy for monitoring and reporting on “publishing service providers.”
  • The country’s media industry will likely be encouraged to participate in “professional training and evaluation.”
  • Under the law, content providers may have to obtain a Publishing Service License, for which the application process is expected to be long and nuanced.
  • The new Internet publication law forbids online content that “opposes the principles of the Constitution, threatens national unity, sovereignty or territorial integrity or security, divulges state secrets, damages the reputation or interests of the state, incites ethnic hostility or discrimination, endangers social morals or ethnic cultural traditions, advocates heresy or feudal superstition, disseminates rumors, disturbs social order and stability, disseminates obscenity, pornography, gambling, violence, or incites crime or insults others or infringes on their legal rights and interests.

Who Will Be Affected By China’s New Internet Publication Law?

China’s new regulation will mainly affect online media outlets and businesses in Asia. To be safe, any American outfit with Sino-marketing appendages should familiarize themselves with the PRC’s new publication standards.

Western bloggers that cover Asian politics and business should also be on alert.

China Is Crystal Clear: Bye, Felicia Foreign Media

China’s latest move reinforces its efforts to limit “foreign investment into the country’s online publication’s industry.” Apparently, both iTunes and Disney have already been affected by the recent statute.

Contact An International Defamation & Internet Law Attorney

Since opening our doors, the lawyers at Kelly Warner have worked with clients and firms from around the world. Internet law is an international matter, and we always keep the global picture in mind.

To learn more about our international defamation and Internet law practice, click here. If you’re ready to talk, let’s do it.

Article Sources

Shira, D., & Associates. (2016, May 17). Internet Censorship and China’s New Online Publication Law – China Briefing News. Retrieved July 21, 2016, from http://www.china-briefing.com/news/2016/05/17/internet-censorship-chinas-new-online-publication-law.html

eSports Law: Rapid Growth Presents Unique Legal Challenges

eSports law and lawyer


eSports is expected to be a $2.9 billion industry by 2017. Not surprisingly, the niche is weathering growing pains — and players are bearing the brunt.
With that in mind, let’s review some eSports law issues affecting players.

eSports Law: Venue Control

Unfortunately, a large chunk of eSport-related profits are derived from privately controlled event venues. Since teams and individual gamers don’t have a stake in the arenas, they typically miss out on merchandising, concession, ticketing, and broadcasting revenues.

How can teams and players combat this arguable inequity? By making a concerted effort to protect whatever income they do control — like endorsements and sponsorships. Without doing so, players and teams may never enjoy the thing they deserve — consistent income. Other professional athletes are well-compensated. So should be the case for cyber athletes.

Intellectual Property

Game publishers and commercial organizations typically own and control intellectual property (IP) born out of the eSports industry — especially when it comes to tournaments and leagues. Generally speaking, game-related-IP for players is limited. Unlike traditional sports teams and clubs, which usually copyright and trademark and license IP, eSports teams and organizations still haven’t gotten that far. For instance, individual gamers don’t usually own their avatars. However, a few professional gamers have been able to successfully protect and exploit their online handles.

Endorsements and Sponsorships as Revenue Streams

Currently, the most reliable income for players are endorsements and sponsorships. Contracts for such partnerships must explicitly outline ROI expectations and scope parameters. If executed sloppily, gamers’ rights issues tend to rear their ugly heads. Furthermore, the agreements mustn’t be open-ended or overly restrictive (i.e., locking up teams and players for excessive periods of time. Otherwise, cyber-athletes will have to choose between a flexible approach, which leaves open the possibility for future profits, versus more secure income avenues, in exchange for less flexibility.

Additional eSport Legal Issues

eSports are a global phenomenon. As such, it’s sometimes difficult to determine which country’s laws govern a given event or contract. As more cases hit the courts, laws and precedents regarding eSports will become clearer. However, many players may lack access to international courts, and this should be addressed in endorsement and sponsorship agreements.

eSports Law: A Look At The Months Ahead…

A wide array of high-profile events are coming up in eSports in 2016. The trend is only expected to intensify over the next several years. Considering how much money is being generated, it’s easy to see why.  It would be a real shame if the organizations and companies — not the teams and players — are the only ones who stand to profit. Let’s all hope that players and teams develop the ability to go to bat for themselves and ensure that they aren’t left out.