On Thursday, the U.S. District Court for the District of Columbia issued a ruling on a suit challenging the sale of the “Pork. The Other White Meat” trademarks. The National Pork Producers Council (NPPC) sold the trademarks to the National Pork Board in 2006.
The lawsuit was filed by the Humane Society of the United States (HSUS), the activist group Iowa Citizens for Community Improvement and Harvey Dillenburg, a pig farmer with a small operation in Iowa. Matthew Penzer, special counsel in HSUS’s animal protection litigation department, was the primary attorney on the case. When Farm Journal’s PORK talked with Dillenburg last year, he did not know the details of the case, and he directed our inquiries to Penzer.
The fee for the exclusive license to use the trademarks was one dollar per year, until 2004 when it increased to $818,000 per year, states the Memorandum of Opinion. It said, “In 2006, with the Secretary’s approval, the Board entered into an agreement to purchase the trademarks from NPPC for approximately $34.6 million (the “Purchase Agreement”), which it agreed to finance over twenty years at an interest rate of 6.75%, for a total cost of $60 million including interest. Under the Purchase Agreement, the Board agreed to pay NPPC $3 million annually for twenty years.”
HSUS and other plaintiffs claimed the trademarks were sold for an inflated price. NPPC sold the assets, widely regarded as a very recognizable marketing brand asset, for $35 million. A USDA-conducted study later valued the trademarks at between $113 million and $132 million.
U.S. District Judge Amy Berman Jackson ruled that the review by financial advisory firm Stout Risius Ross did not adequately analyze the value of the trademarks, in particular the one that is currently used, a pork loin silhouette with the word “pork” on it. That trademark and a new campaign (“Pork: Be Inspired”) replaced The Other White Meat in 2011.
“The fundamental problem is that the three trademarks that include The Other White Meat slogan have been declared to be obsolete, and they have been retired from active use," Jackson wrote.
"So their value is minimal, or at best, undetermined. And the record contains no effort to ascertain the value of the fourth mark – the “Pork and Design” logo that consists of the word “pork” written across a blue triangular ‘pork loin silhouette’ – at all," she wrote.
Jackson also said USDA’s review of the payments were flawed: “First, the agency states that it undertook to ascertain ‘the current value of the Pork trademarks,’” Jackson wrote. “But the valuation it adopted to justify future payments is based on the cost of replacing a campaign that is no longer in use and that the agency has already paid to replace.”
The National Pork Producers Council issued a statement on Thursday in response to the ruling.
“We are conducting a thorough review of the decision and evaluating our options,” said Ken Maschhoff, an Illinois pork producer and president of NPPC, in the release. “We are disappointed that the court partially denied the U.S. Department of Agriculture’s motion to dismiss this frivolous lawsuit, one that was never based on a legitimate legal challenge to a federally approved transaction but instead was brought by an anti-meat activist group intent on eliminating meat consumption and harming a vast U.S. industry that employs hundreds of thousands of Americans and feeds billions of people at home and abroad.”
According to the release, the court’s decision followed a motion last January to dismiss the lawsuit filed by the U.S. Department of Agriculture (USDA), which authorized the transaction as part of its oversight responsibilities under the 1985 Pork Act.
The Pork Act set up the pork checkoff program and established the National Pork Board to administer it. The USDA’s motion argued that the lawsuit, filed by the Humane Society of the United States (HSUS) and two other parties, “lacked merit, was barred by a six-year statute of limitations, that the plaintiffs failed to establish standing to file the lawsuit or show that they were harmed by the sale of the trademarks, and that the agency’s evaluation of the sale of the trademarks showed they provided significant value to the pork industry,” NPPC said.
Several checkoff reform bills are pending in Congress [S. 741/H.R. 1753 the Opportunities for Fairness in Farming (OFF) Act led by U.S. Senators Mike Lee (R-UT) and Cory Booker (D-NJ) and Reps. Dave Brat (R-VA) and Dina Titus (D-NV).].