Happy Fourth: No Fireworks for Native’s Qualified “Born in the USA” Claim

“Made in the USA” claims are risky business. Between its Made in USA Labeling Rule and its Enforcement Policy Statement on U.S. Origin Claims, the Federal Trade Commission (FTC) has been actively enforcing US origin claims. A recent decision out of the National Advertising Division (NAD) shows that the ad industry’s self-regulatory body extends the FTC’s guidance further than some brands might anticipate.

In its review of advertising by The Procter & Gamble Company (P&G) for its Native line of personal care products, the NAD recommended the discontinuation of P&G’s “Born in the USA” claim. What’s novel about this case isn’t that substituting “Made” with “Born” didn’t buy the advertiser leeway. After all, the FTC itself has made clear that a “Made in USA” representation “may be made by either express or implied claims.” Whether a product is “made in,” “born in,” or “handcrafted in” the USA, the guidance applies just the same.

The more notable feature of NAD’s decision is that P&G had attempted to expressly define its “Born in the USA” as a claim about the Native company itself as opposed to a claim about Native’s products. Directly beneath “Born in the USA,” P&G’s packaging explained its intended message: “Native was founded in San Francisco.” NAD found this qualifying language—at best—“not effective.” Indeed, NAD noted that “Native was founded in San Francisco” could be viewed as “additional information about where the company was founded” as opposed to language explaining the meaning of its “Born in the USA” claim. NAD went on recommended that P&G discontinue its “Born in the USA” claim, finding that its Native products did not clear the “all or virtually all” bar.  

NAD’s displeasure with P&G’s clarifying language is particularly notable given that the FTC itself allows for qualified “Made in USA” claims. Of course, the qualified claims contemplated in the FTC’s Enforcement Policy Statement address limitations on the extent of the product’s US origin (e.g., “Made in USA of US and imported parts,” “60% US content,” “Made in USA from imported leather,” etc.) rather than qualifications tying the claim to the company rather than the products.

The lessons here are important for any brand engaging in “USA”-related marketing. First, enforcement of US origin claims does not hinge on the use of the words “Made in USA.” Second, while the FTC and NAD allow for qualified claims in this area, brands can incur substantial risk if they veer too far from the sort of qualifications contemplated by the FTC.