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Business Law Newsletter

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    The “good will” of a business is an intangible asset, like the reputation, skill, or experience that is associated with the business. It also refers to the rate of recurring patronage that a business has developed over time... Read more.
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  • Nonprofits Must Pay Taxes on Unrelated Business Income
    Nonprofit organizations, e.g., charities, were historically not taxed. In 1950, however, an amendment to the Internal Revenue Code made taxable income earned from activities that did not further the tax-exempt purposes of such... Read more.
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FTC Regulates Use of "Degradable," "Recyclable" and other Environmental Advertising Practices

In 1992, the Federal Trade Commission (FTC) issued the “Guides for the Use of Environmental Marketing Claims” (the Environmental Marketing Guides), which are based on data from FTC investigations, hearings and public opinion. The Environmental Marketing Guides address the applicability of Section 5 of the Federal Trade Commission Act (the FTC Act) to environmental advertising and marketing practices. The Environmental Marketing Guides make deceptive acts and practices in or affecting commerce unlawful and apply to all forms of marketing of products to the public.

Categories of Environmental Claims

The Environmental Marketing Guides address eight different categories of environmental claims. In addition, the FTC offers several examples to illustrate claims that do and do not comport with the guides. The categories addressed by the Environmental Marketing Guides are set forth below in a summary fashion:

  • General environmental benefit claims: Marketers must substantiate every express and material implied claim, as understood by reasonable consumers, about an objective quality, feature or attribute of a product or service. If broad environmental claims cannot be substantiated, such claims should either be avoided or accompanied by qualifying language.

Further, according to the Environmental Marketing Guides, “it is deceptive to misrepresent, directly or by implication, that a product or package is”:

  • Degradable, biodegradable or photodegradable: Such claims must be substantiated by “competent and reliable scientific evidence” that the entire product or package will “completely break down and return to nature, i.e., decompose into elements found in nature within a reasonably short period of time after customary disposal.”
  • Compostable: Such claims must be substantiated by evidence that “all the materials in the product or package will break down into, or otherwise become part of, usable compost (e.g., soil-conditioning material, mulch) in a safe and timely manner in an appropriate composting program or facility, or in a home compost pile or device.”
  • Recyclable: In order to market a product or package as “recyclable,” it must possess the capacity to be “collected, separated or otherwise recovered from the solid waste stream for reuse, or in the manufacture and assembly of another package or product, through an established recycling program.”
  • Made of recycled material (including recycled raw material and used, reconditioned and re-manufactured components): Only materials that have been “recovered or otherwise diverted from the solid waste stream,” either during the manufacturing process or after consumer use, may be attributed a recycled content claim.
  • Has been reduced or is lower in weight, volume or toxicity: In general, such “source reduction” claims should be accompanied by qualifying language to avoid consumer deception.
  • Refillable: An unqualified claim regarding a package’s capacity to be refilled should not be asserted unless a system exists that provides for “(1) the collection and return of the package for refill or (2) the later refill of the package by consumers with product subsequently sold in another package.”
  • Ozone safe or ozone friendly: In general, a product should not be advertised as “ozone safe” or “ozone friendly” if the product contains any ozone-depleting chemical.
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