Lights, Chairs, and Bikes -- Recent FTC "Made in USA" Enforcement

When making unqualified claims that a product is "made in the United States," the Federal Trade Commission says that you must be able to substantiate that the product is "all or virtually all" made here.  You can find this standard in the FTC's Enforcement Policy Statement on U.S. Origin Claims as well as in the FTC's Made in USA Labeling Rule.  

The FTC regularly brings enforcement actions against marketers who don't comply with this standard, such as the FTC's case from earlier this summer involving Chaucer Accessories, where the FTC alleged that the company falsely claimed that certain of its products were "Made in USA from Global Materials."  (The issue in that case was that, although the products were made from imported materials, the FTC felt that since the products weren't substantially transformed in the United States, even a qualified "made in USA" claim wasn't appropriate.)

Even when the FTC isn't bringing high profile enforcement actions, the FTC is still quietly pursuing marketers who the agency believes are not complying with its "made in USA" standard. This summer, for example, the FTC closed investigations into the marketing of ClaroLux outdoor lighting products, American Bicycle Group bicycles, and Crown Seating medical and dental seating products.  

In a closing letter sent to ClaroLux in June, the FTC expressed concerns about the company's U.S.-origin claims for its outdoor lighting products, in light of the fact that certain products incorporate significant imported materials, such as LED components and other lighting parts.  In the letter, the FTC cautioned that, unless U.S.-origin claims are linked to specific products, "consumers generally interpret U.S.-origin claims in marketing materials to cover all products advertised in those materials."  The FTC further explained that, "it is appropriate for the Company to promote its general commitment to American jobs and highlight U.S. manufacturing processes. However, marketing materials should not state or imply that products are wholly or partially made in the United States unless the Company can substantiate those claims." 

In a closing letter sent to American Bicycle Group in July, the FTC expressed concerns that the company may have overstated the extent to which its bicycles are made in the United States, in light of the fact that some of its bikes contain significant imported components, ranging from raw materials to finished frames.  In the letter, the FTC explained, however, that is appropriate for the company "to promote its general commitment to American jobs" and, even if the company can't make an unqualified "made in USA" claim about its products, it is acceptable to claim (truthfully) that particular manufacturing or other processes (such as designing or painting) take place in the United States.  

In the August closing letter to Crown Seating, the FTC expressed concerns that the company may have overstated the extent to which its products are made here (but the letter didn't give much other detail about what the concerns were). 

What are some tips to take away from the FTC's summer of "Made in USA" enforcement? 

First, if you're making an unqualified U.S. origin claim, you need to substantiate, of course, that the product was "all or virtually all" made here.  

Second, even if you're making a qualified claim that a product was made here, you still need to ensure that the product was last substantially transformed in the United States. 

Third, whenever you made a U.S.-origin claim, be very clear about what products the claim relates to.  If your claims aren't clear, consumers may understand the claim to relate to all of your products. 

Fourth, it's fine to promote that specific processes -- such as design or painting -- take place in the United States.  But, if you're going to promote a specific process, be sure that you're accurately conveying what process actually took place here.  When you use terminology that doesn't clearly explain the process -- such as "produced" or "crafted" -- the FTC is likely to interpret that as an unqualified U.S. origin claim.

And, finally, it's fine to promote your American operations and the fact that you've got American workers.  But, when you do that, you've got to be sure that you're not communicating implied claims that your products are "made" here.