The U.S. District Court Judge ruling halts the annual payment from the National Pork Board to the National Pork Producers Council for Pork, the Other White Meat trademarks. Since 2012, the Humane Society of the United States has legally challenged the sale.
Reasonably, the recent court decision has many people asking questions. We answer them here.
Why did HSUS originally file a lawsuit?
In 2012, the HSUS filed a lawsuit against the USDA and Agriculture Secretary Tom Vilsack over approval of the NPB’s purchase of four elements related to the “Pork, the Other White Meat” trademark from the NPPC. One small Iowa pork producer and the Iowa Citizens for Community Improvement joined the lawsuit. The U.S. District Court dismissed the lawsuit in 2013.
Who approved the original payment of the trademarks?
In 2005, the NPB approached the NPPC about purchasing those trademarks, which lead to a lengthy appraisal and negotiation. The Pork Act Delegate approved the final contract in a special session in July 2005.
John Johnson, NPB chief operation officer, says in 2006 the contract received the proper approval by the USDA. The contract to purchase the trademarks for $3 million a year for 20 years was signed by the only two parties involved — NPPC and NPB. Every year since 2006, the USDA has approved the annual payment along with the Pork Checkoff budget.
I thought the lawsuit was dismissed by the courts, why is the HSUS lawsuit still active?
In 2015, the plaintiffs filed an appeal with the Appellate Court in Washington, D.C. A federal judge reinstated the lawsuit and sent it back to the lower courts, ordering an investigation into the transaction. After Oct. 28, 2015, the USDA entered into settlement talks with HSUS. On Dec. 11, USDA and HSUS informed the Court that they were in an active settling negotiation. On 4:30 p.m. Dec. 23, the Courts put the case on hold until May 2016.
As a result of the Humane Society of the United States lawsuit challenge, the court ordered a review of the sale of “Pork, the Other White Meat” trademarks and the values of those elements. As a result, the USDA directed the NPB to spend Checkoff dollars on a trademark valuation. The review is currently going on and expected to be completed by May.
In April, the NPPC also submitted valuation reports. The independent firm Stout Risius Ross completed the analysis and valued the trademarks at $175 million as of Dec. 31, 2015. As result of Stout Risius Ross finding the value of the trademarks exceeds the value of the original purchase price, the Agricultural Marketing Service approved the continuing payments under the original agreement.
Last January, the USDA filed a motion to dismiss the lawsuit. The USDA’s motion argued that the lawsuit, filed by the 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.
The February 2018 court’s decision follows a motion last January to dismiss the lawsuit filed by the USDA, which authorized the transaction as part of its oversight responsibilities under the 1985 Pork Act.
What was the latest court ruling on the HSUS lawsuit?
The U.S. District Court for the District of Columbia issued a ruling Feb. 1, 2018, on a suit challenging the sale of the Pork, The Other White Meat trademarks. U.S. District Judge Amy Berman Jackson ruled that the review by Stout Risius Ross, financial advisory firm, did not adequately analyze the value of the trademarks. Berman Jackson orders the annual payment from the NPB to the NPPC to cease.
What is the next step for pork industry?
The NPPC is conducting a thorough review of the decision and evaluating options.
What is the determined value of the ‘Other White Meat’ trademark?
As part of that review process, the NPB was directed to utilize checkoff funds to contract an independent valuation of the current value of the trademarks. Stout Risius Ross completed the appraisal and concluded that “as of Jan. 1, 2016, the investment value of the four trademarks is between $113 million and $132 million using the cost approach, one of several acceptable and recognized approaches for determining valuation.”
The NPPC also submitted valuation reports. The independent firm hired by the NPPC valued the trademarks at $175 million as of Dec. 31, 2015.
Is the ‘Other White Meat’ trademark dead?
Neil Dierks, NPPC chief executive officer, confirmed “Pork, the Other White Meat” slogan, and trademark stands as the heritage brand. Even though the NPB has evolved the marketing effort with consumer trends, the “Other White Meat” brand is the fifth most memorable promotional tagline in the history of contemporary advertising and still an active brand.