NPPC now party to pork trademark suitNPPC now party to pork trademark suit
June 2, 2016
THE U.S. District Court for the District of Columbia Circuit last month granted a motion by the National Pork Producers Council (NPPC) to intervene in a lawsuit The Humane Society of the United States (HSUS) brought against the U.S. Department of Agriculture over the sale of four trademarks associated with the "Pork. The Other White Meat" slogan.
The decision came two weeks after USDA's Agricultural Marketing Service (AMS) decided that it would continue to approve the National Pork Board's (NPB) annual payments to NPPC for the trademarks.
NPPC sold the trademarks to NPB in 2006 for approximately $35 million. NPPC financed the purchase over 20 years, making NPB's annual payment $3 million. The sale included a lengthy negotiation in which both parties were represented by legal counsel. USDA, which oversees the federal pork checkoff program administered by NPB, approved the purchase.
In 2012, HSUS, one Iowa farmer and the Iowa Citizens for Community Improvement filed suit against USDA seeking to have the sale rescinded. The U.S. district court dismissed the suit for lack of standing, but in August 2015, a federal appeals court reinstated it. Subsequently, USDA agreed to review the purchase, including conducting a valuation of the trademarks.
As part of its review, AMS directed NPB to contract for an independent expert to provide a current valuation of the trademarks. Stout Risius Ross conducted the valuation and accepted input from both HSUS and NPPC, ultimately finding that the value of the trademarks far exceeded their purchase price and the remaining principal balance under the agreement. The assessment deemed the four trademarks to be worth between $113 million and $132 million.
HSUS is pressing forward with its lawsuit, claiming that the trademarks are worth only about $2.6-17.6 million.
Separately, USDA's General Counsel said April 26 it had sent a letter to NPB's chief operating officer regarding the NPB Delegate Body's advisement to Agriculture Secretary Tom Vilsack, which it says violates pork checkoff laws.
During the March 3-5 National Pork Industry Forum, 145 pork checkoff delegates representing 43 states and importers unanimously joined the North Carolina Pork Council in support of an advisement to Vilsack asking USDA to defend its original decision supporting the trademark transaction.
In the letter, the USDA General Counsel informed the NPB COO that the advisement and the letter forwarding it were in violation of the Pork Promotion, Research & Consumer Information Order and AMS guidelines forbidding AMS research and promotion boards from using mandatory assessment funds to engage in lobbying for government action and were in direct contradiction to counsel provided by AMS during the Delegate Body meeting.
As such, the General Counsel directed that NPB, within 30 days, must account for and reimburse all pork checkoff funds related to the Delegate Body action and suggested that the COO, board officers and any other critical staff attend remedial training on the proper use of pork checkoff funds.
An AMS spokesman recently told Feedstuffs that NPB provided AMS with "an accounting of the funds surrounding the advisement to the agriculture secretary and is in the process of obtaining non-checkoff funds to cover these costs."
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