Archive for the ‘Greenwashing’ category

Volkswagen and the High-Tech Greenwash

October 27th, 2015

VW Logo

By now the Volkswagen emissions scandal has been widely reported and analyzed, and the consequences the German carmaker will face for using software to cheat on emissions tests will be determined, at least in part, by a mass of lawyers.

What interests me is how Volkswagen’s actions fit into the broader context of greenwashing.

The U.S. Environmental Protection Agency found that Volkswagen intentionally programmed a number of its diesel vehicles to activate emissions controls only during testing.  The vehicles’ software allowed the nitrogen oxide (NOx) output to satisfy U.S. emissions standards during testing while producing much higher emissions during actual driving conditions.

In one sense, this comports with a theme we’ve encountered before in greenwashing, i.e., a product’s real-world performance does not live up to its testing results.

The most common example is the charge that a car’s actual gas mileage is considerably lower than the EPA’s fuel efficiency estimates.  These allegations have been made against Ford, Toyota, and Honda (see previous posts here, here, and here).

A variation on this theme is the allegation that the testing protocols themselves are flawed, e.g., in lawsuits against Hyundai and Kia about supposedly overstated fuel economy figures due to testing methods that were not compliant with EPA requirements.

But just as troubling as the result of the deception (actual NOx output being considerably greater than the tested output) is Volkswagen’s method of deception.

This seems be part of a new trend of technological greenwashing.  Rather than making false or misleading statements in ads and other marketing materials, or providing express statements of inflated numbers, this new form of greenwashing uses technology to deceive.

We’ve seen technological greenwashing at least once before in a lawsuit accusing Ford of claiming that a software update for the Fusion Hybrid would increase performance and mileage (see previous post here).  According to the plaintiff, the car’s monitor displayed better mileage and less gas usage after the upgrade but the numbers were inaccurate and the vehicle’s actual mileage did not improve.

This Volkswagen high-tech greenwash is more insidious because the entire deception is cloaked in technology; there isn’t even an affirmative misleading display as in the Ford case, so government agencies and consumers might have no idea there are any representations being made.

This probably is not the last we’ll see of the high-tech greenwash.

FTC Proactive and Preemptive on Green Certifications

October 13th, 2015


The Federal Trade Commission (FTC), America’s consumer watchdog agency, has historically been ahead of the curve on greenwashing.

In 1992, it first published its Guides for the Use of Environmental Marketing Claims, commonly know as the Green Guides, which provide a framework for green marketers to formulate permissible environmental benefit claims for products and services.

Since then, the agency has been actively pursuing greenwashers, with an aggressive campaign in the 1990s against deceptive environmental marketing claims including enforcement actions targeting ads for plastic grocery bags, aerosol cleaning and beauty products, packaging and tableware products, laundry detergents, and disposable diapers.

More recently, the FTC has occasionally taken alleged greenwashers to court; it brought a recent action for misleading environmental benefit claims against an LED manufacturer.

So it comes as no surprise that the agency would be proactive in the area of green certification seals.  Recently, the FTC sent warning letters to five providers of such seals and 32 businesses using those seals.

Certification seals, or marks, are a special species of trademark.  Unlike ordinary trademarks, which indicate the commercial source of a product, certification marks communicate to the consumer that the products to which they are affixed meet certain manufacturing or quality standards.

Examples of popular certification marks are the LEED certification, owned by the U.S. Green Building Council and Energy Star, owned by the U.S. Environmental Protection Agency:

Energy Star

This preemptive move consisted of the letters, which alerted the providers and businesses that the certification seals at issue could be considered deceptive and may not comply with the Green Guides.

The FTC announced the warning letters last month, but noted that it was not conducting any enforcement actions at this time.  The FTC did not disclose the names of the companies to which it sent the letters.

The press release provides examples of two hypothetical green seals, potentially deceptive on the right and not deceptive on the left:


The press release also mentions the agency’s new blog, Performing Seals, which helps marketers understand how certification seals can comply with the Green Guides.

More RIN Fraud Greenwashers Head to Prison

September 29th, 2015

It was just a few months ago that a blog post reported a criminal defendant pleaded guilty to selling fraudulent renewable identification numbers (RINs).

It has happened again, with recent prison sentences for four individuals in Florida who also pleaded guilty to charges related to a scheme involving false production of biodiesel RINs.

According to this article in a Florida online newspaper, court documents had accused the defendants of profiting by unjustly generating and selling RINs and unjustly claiming biodiesel tax credits for the production and blending of fuel that was not actually biodiesel.

More particularly, as employees and officers of New Energy Fuels LLC, the defendants claimed to process animal fats and vegetable oils into biodiesel.  However, what they actually did was perform minimal processing on low-grade feedstocks to produce a low-grade fuel that was not biodiesel.

They would represent to the U.S. Environmental Protection Agency (EPA) that they had produced biodiesel, generate fraudulent biodiesel RINs, and sell the fake RINs to third parties.  In total, the defendants sold over $15 million in fraudulent RINs.

The defendants also made false claims to the Internal Revenue Service (IRS) to get biodiesel tax credits.

As I’ve said before, I believe this type of fraudulent activity is greenwashing.  The fraud and resulting damage are recognizable when we view the putative RIN purchasers as green consumers, albeit commercial consumers instead of individuals, falling victim to false representations about the validity of renewable energy-based financial products.

The Acting Special Agent of the EPA in charge of the investigation (together with officials from the Dep’t of Justice and IRS echoed this sentiment, speaking to the purpose of RINs and the consequences of such fraudulent activity:

“The Renewable Fuel Standard helps reduce the climate impact of transportation fuel sold in this country.  The criminal activity by these defendants has real consequences.  The defendants manipulated and utilized federal governmental programs to line their pockets by fraud….Companies and managers need to understand there are serious consequences to skirting the rules and undermining the integrity of an EPA program.”

Defendant Pleads Guilty in RIN Fraud Greenwashing Case

July 13th, 2015

A previous post discussed a federal indictment of an individual for allegedly selling fraudulent renewable identification numbers (RINs).

The indictment alleged that an individual using the name Philip Joseph Rivkin controlled and operated Green Diesel LLC and claimed that the company produced millions of gallons of biodiesel at its Houston facility then generated and sold about 45 million RINs based on the claim.

However, according to the indictment, Green Diesel did not actually produce any biodiesel at its facility, and the defendant allegedly made millions of dollars selling the fraudulent RINs.

Recently, Rivkin, a.k.a. Felipe Poitan Arriaga, pleaded guilty to making a false statement under the Clean Air Act and to mail fraud for his role in the scheme, which included attempts to defraud the U.S. Environmental Protection Agency.

In the plea agreement, he admitted that he falsely generated renewable fuel credits between July 2010 and July 2011 and sold them to oil companies and brokers, generating over $29 million.

Under the plea deal, Rivkin faces more than 10 years in prison and will be responsible for $51 million in restitution to reimburse victims of the scheme.

Because the fraudulent activity in this case did not involve individual green consumers and consumer products such as water bottles, cleaning supplies, or hybrid vehicles, this would not typically be thought of as a greenwashing case.  But the fraudulent activity does represent a serious instance of greenwashing.

The fraud and resulting damage are recognizable when we view the putative RIN purchasers as green consumers, albeit commercial consumers instead of individuals, falling victim to false representations about the validity of renewable energy-based financial products.

You can read more about the guilty plea at Biofuels Digest here and at Biodiesel Magazine here.

Class Action Alleges Ford Fusion Fuel Figure Fudge

June 23rd, 2015

In a recent lawsuit, a Ford Fusion owner has accused the automaker of misrepresenting the fuel efficiency of the hybrid vehicle and distributing a software update that displays false mileage figures.

In the proposed class action complaint filed in California Superior Court in Los Angeles, named plaintiff Dave DeLuca says that, not long after purchasing the vehicle, he realized its actual performance didn’t match the advertised performance.

Mr. DeLuca tested the car under “optimal conditions” as described by a Ford technician.  More particularly, he tested the car with the windows up, the air conditioner and stereo turned off, and driving at a speed of 62 miles per hour or less, and the car allegedly underperformed.

When Mr. DeLuca took the car into the dealership, the Ford technician tested the car under the same conditions, got the same results, but told Mr. DeLuca nothing could be done to fix the car because it wasn’t broken.

Up to this point, the allegations are pretty common for this type of lawsuit.  Most greenwashing cases against automakers include claims that the hybrid or electric vehicles fail to achieve the advertised fuel efficiency (see, e.g., previous posts here and here).

What’s new here is the software piece.  The DeLuca complaint also alleges that Ford issued a software update for the Fusion Hybrid, claiming the update would increase performance and mileage.  After the dealer installed the update in his car, Mr. DeLuca tested its performance again.

On a road trip to Sin City (Viva Las Vegas!), he drove the car under optimal conditions again and observed that the car’s monitor was indeed displaying better mileage and less gas usage.  But Mr DeLuca alleges, that was just smoke and mirrors:

[W]hen Mr. DeLuca filled his gas tank at a gas station, he realized the vehicle’s software relayed inaccurate mileage and use of gasoline.

The mileage had not really increased, according the complaint:

[A]lthough Ford’s software update displays a higher mileage, the vehicle’s mileage has not increased.

Mr. DeLuca performed one final test, doing comparative driving runs with gas-only Ford Fusion.  He found that the gas-only Fusion displayed accurate numbers while Fusion Hybrid displayed inaccurate figures.

It will be interesting to watch this case and see what, if anything, we learn about the alleged software greenwash.

Clean Tech in Court: Green Patent Complaint Update

March 24th, 2015

In January and February, there were a number of green patent infringement lawsuits filed in the areas of biofuels, hybrid vehicles, LEDs, smart grid, advanced batteries, solar power, and water meters.

Advanced Batteries

BASF Corporation et al. v. Umicore N.V. et al.

In this lawsuit BASF and UChicago Argonne, LLC accuse Umicore and Makita Corporation of unfair trade practices, antitrust violations, and infringement of two patents relating to cathode materials for lithium-ion batteries.

The patents-in-suit are U.S. Patent Nos. 6,677,082 (‘082 Patent) and 6,680,143 (‘143 Patent), both entitled “Lithium metal oxide electrodes for lithium cells and batteries” and directed to a lithium metal oxide positive electrode for a non-aqueous lithium cell.

The cell is prepared in its initial discharged state and has a general formula xLiMO2.(1−x)Li2M′Oin which 0<x<1, and where M is one or more ion with an average trivalent oxidation state and with at least one ion being Mn or Ni, and where M′ is one or more ion with an average tetravalent oxidation state.

According to the complaint, Umicore is selling cathode materials that infringe the ‘082 and ‘143 Patents, and Makita is one of the companies importing and selling batteries incorporating the materials.  The lawsuit was filed February 20, 2015 in the U.S. District Court for the District of Delaware.


C T E Global, Inc. v. Novozymes A/S

In a complaint filed January 9, 2015 in the U.S. District Court for the Northern District of Illinois, C T E Global seeks a declaratory judgment of invalidity and non-infringement of two Novozymes patents relating to an enzyme used in biofuel production.  The patents are U.S. Patent Nos. 6,255,084 (’084 Patent) and 7,060,468 (’468 Patent).

The ’084 and ’468 Patents are entitled “Thermostable glucoamylase” and are directed to an isolated glucoamylase enzyme which has higher thermal stability than prior glucoamylases.  The patents also claim starch conversion processes using the enzyme.  Glucoamylases are used to convert hydrolyzed corn starch to glucose, particularly in production of ethanol.

Novozymes and C T E previously litigated these patents and settled the case in 2012.  According to C T E, the ‘084 and ‘468 Patents are invalid in light of the U.S. Supreme Court Myriad Genetics decision holding that isolated natural products are not patent eligible subject matter.

Superior Oil Company, Inc. v. Solenis Technologies L.P.

This is not a patent infringement suit, but rather a priority /ownership dispute in which Superior Oil claims that the inventors of its patent for a method for recovering oil from the byproducts of ethanol production using various surfactants were the first to invent the technology.

Superior Oil’s patent is U.S. Patent No. 8,962,059, entitled “Bio-based oil composition and method for producing the same” (‘059 Patent).  In its complaint, Superior Oil requests that the court declare that an interference-in-fact exists between the ‘059 Patent and U.S. Patent No. 8,841,469 (‘469 Patent), entitled “Chemical additives and use thereof in stillage processing operations” and owned by Solenis Technologies.

The complaint was filed February 24, 2015 in the U.S. District Court for the District of Delaware.

Hybrid Vehicles

Somaltus LLC v. Ford Motor Company

Somaltus filed this complaint for patent infringement in the U.S. District Court for the Eastern District of Texas on February 12, 2015.  Somaltus alleges that Ford infringes U.S. Patent No. 7,657,386 (‘386 Patent) by selling vehicles equipped with an infringing hybrid battery system.

The ‘386 Patent is entitled “Integrated battery service system” and directed to an integrated battery service system that performs a plurality of services related to a battery, such as battery testing, battery charging, and the like. In addition, the integrated service system provides services to devices/components that are coupled to the battery, such as starters, alternators, etc.

Somaltus, a non-practicing entity, has also sued Nissan, Bosch Automotive Service Solutions, Auto Meter Products, and Cadex Electronics.


Cree, Inc. v. Feit Electric Company, Inc. et al.

North Carolina LED manufacturer Cree sued Feit for alleged infringement of ten utility and design patents relating to LED technologies.  The complaint also alleges that Feit has engaged in false advertising in connection with marketing its LED products.

The patents-in-suit are:

U.S. Patent No. 6,657,236, entitled “Enhanced light extraction in LEDs through the use of internal and external optical elements”

U.S. Patent No. 6,885,036, entitled “Scalable LED with improved current spreading structures”

U.S. Patent No. 6,614,056, entitled “Scalable led with improved current spreading structures”

U.S. Patent No. 7,312,474, entitled “Group III nitride based superlattice structures”

U.S. Patent No. 7,976,187, entitled “Uniform intensity LED lighting system”

U.S. Patent No. 8,766,298, entitled “Encapsulant profile for light emitting diodes”

U.S. Patent No. 8,596,819, entitled “Lighting device and method of lighting”

U.S. Patent No. 8,628,214, entitled “Lighting device and lighting method”

U.S. Design Patent No. D653,366, entitled “LED lamp”

U.S. Design Patent No. D660,990, entitled “LED lamp”

The complaint includes greenwashing allegations as well, specifically that Feit’s advertising falsely suggests that some of its LED products meet the Energy Star standard relating to Luminous Energy Distribution when the products actually fail to meet this requirement.

Smart Grid

Allure Energy, Inc. v. Honeywell International, Inc. 

On January 29, 2015, Allure Energy sued Honeywell in federal court in Austin, Texas, alleging false advertising and infringement of two patents relating to smart thermostat technology.

The complaint asserts U.S. Patent Nos. 8,626,344 and 8,457,797, both entitled “Energy management system and method” and directed to a wireless thermostat responsive to control action data communicated via a mobile app and other home energy management systems.

The accused device is Honeywell’s Lyric smart thermostat product.

Emerson Electric Co. et al. v. SIPCo LLC et al.

Previous posts (e.g., here and here) reported on SIPCo’s patent enforcement activities.

In this declaratory judgment (DJ) action, filed January 30, 2015 in federal court in Atlanta, Emerson, one of the defendants in SIPCo’s patent infringement suits, seeks a declaratory judgment that the claims of two SIPCo patents are invalid and not infringed.

The patents listed in Emerson’s complaint are U.S. Patent No. 6,044,062, entitled “Wireless network gateway and method for providing same,” and directed to certain wireless network systems having a server providing a gateway between two networks, and U.S. Patent No. 7,103,511, which relates to remote monitoring and control systems.

In 2013, Emerson filed a similar DJ suit against SIPCo targeting several patents.

Solar Power

Beacon Power, LLC v. SolarEdge Technologies, Inc. et al.

Beacon Power sued SolarEdge for patent infringement on January 9, 2015 in federal court in San Antonio, Texas.  The complaint asserts U.S. Patent Nos. 8,102,144 (‘144 Patent) and 8,669,675 (‘675 Patent), each entitled “Power converter for a solar panel.”

The ‘144 Patent is directed to a solar power generation system including a DC-to-DC power converter configured and arranged to convert the raw power output for each solar module to a high voltage and low current output.

The ‘675 Patent is directed to a solar power generation system wherein each DC-to-DC power converter is configured and arranged to convert the solar module output power (SOP) for each solar module to a converted solar module output power (COP) having a converted output voltage (COV) that is higher than the SOV and a converted output current (COI) that is lower than the SOI.

The accused products are SolarEdge’s P Series Power Optimizers.

Water Meters

Flow Dynamics, LLC v. Green4All Energy Solutions Inc. et al.

Filed February 20, 2015 in federal court in Palm Beach, Florida, Flow Dynamics’ complaint accuses Green4All of infringing U.S. Patent No. 8,707,981 (‘981 Patent).

The ‘981 Patent is entitled “System for increasing the efficiency of a water meter” and directed to a system and an associated valve assembly adapted to increase the efficiency of an upstream water meter. The valve assembly removes entrained water bubbles from the water supply, increasing the density of the water running through the water meter. This ensures that the water meter is not inaccurately including entrained air as metered water so water readings are more accurate.

Flow Dynamics alleges that Green4All’s H2minusO system infringes the ‘981 Patent.

The Top Green IP Stories of 2014

January 20th, 2015

Before we get into the new news, let’s take a quick look back at the top green IP stories of 2014.


5.  GE Wins Ownership of Key Wind Patent

In what was something of a sideshow, but with major implications for the main event, the Court of Appeals for the Federal Circuit effectively ended a dispute between GE and a former employee, Thomas Wilkins, over ownership of one of the patents involved in larger litigation with Mitsubishi.

After Wilkins brought a lawsuit to correct inventorship of U.S. Patent No. 6,921,985 (’985 Patent), Mitsubishi intervened in the suit.   The Federal Circuit ultimately ruled for GE because the document Wilkins argued demonstrated his conception of the invention did not disclose any elements of the claimed invention.

In fact, the court held, the document in question “does not even depict the key feature Wilkins claims to have invented, i.e., a UPS powering the wind turbine’s three controllers.”


4.  Tesla’s Chinese Trademark Troubles

Tesla’s eco-mark issues in China were resolved, renewed, and resolved again in 2014.  Early in the year, Tesla said it had obtained a court decision granting it the right to use the TESLA mark in China over a cybersquatter and prior registrant of the TESLA mark named Zhan Baosheng.

A few months later, Mr. Zhan sued Tesla for trademark infringement in China, demanding the American electric car maker stop all sales and marketing activities in China, shut down showrooms and charging facilities, and pay him 23.9 million yuan ($3.85 million) in compensation.

Shortly thereafter, Zhan apparently got his pay day when Tesla resolved the dispute – this time via a direct settlement rather than relying on the Chinese court system. Zhan agreed to settle the dispute “completely and amicably” including consenting to cancellation of his Tesla trademark registrations and applications.   He also agreed to transfer his domain names, including and to Tesla.


3.  GreenShift Loses Big in Ethanol Patent Case

2014 saw a major decision in the patent infringement litigation between GreenShift (with its New York subsidiary, GS Cleantech) and a host of ethanol producers across the midwestern United States over patented ethanol production processes.

After multiple actions were consolidated in the Southern District of Indiana and the claims of the key patent family were construed and re-construed, the court issued a sweeping 233-page decision ruling on all of the pending motions for summary judgment brought by the original parties to the suit.

GreenShift lost big, with the court making several rulings on infringement, all for defendants.  Worse yet for GreenShift, the court held three of the four patents in the key patent family invalid because of the company’s commercial offer to sell the technology more than a year before the August 17, 2004 filing date of the initial provisional patent application that led to the other applications in the family.


2.  Record Settlement Under Clean Air Act for Alleged Greenwashing

After their reputations took a beating in 2012 under a barrage of consumer class actions alleging false or misleading fuel efficiency claims, last year the Korean automakers entered into a record settlement with the U.S. government amid additional allegations of greenwashing.

The Environment and Natural Resources Division of the U.S. Department of Justice (DOJ) and the California Air Resources Board (CARB) sued Hyundai and Kia, alleging they sold over a million vehicles that did not meet the requirements of the Clean Air Act because the automakers used improper testing procedures and analysis and submitted faulty fuel economy data to the U.S. Environmental Protection Agency.

Hyundai and Kia quickly settled with the DOJ and CARB.  Under the settlement, the automakers did not have to admit the truth of the allegations but agreed to pay about $100 million, about $93.6 million to the DOJ and about $6.4 million to the CARB.  This is the largest penalty ever imposed under the Clean Air Act.

The car companies also forfeited 4.75 million greenhouse emission credits – earned for building vehicle emissions under the legal limit – which they had previously claimed and are estimated to be worth over $200 million.


1.  The Tesla-Patent Commons

The biggest green IP story of 2014 was Elon Musk’s announcement that Tesla would “donate” its entire patent portfolio.  Specifically, Musk’s post on the company blog said “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

In the wake of the announcement, more details emerged about Tesla’s patents and the technologies covered.  Reaction to the move was mixed, with some arguing it was a public relations stunt that would ultimately hurt Tesla.

In my post on the announcement, I wondered whether the temptation of exploiting Tesla’s technology would outweigh exclusivity concerns:

Ultimately, the impact of Musk’s decision may turn on to what extent other such players will be motivated to invest in manufacturing vehicles, batteries, etc. using Tesla’s patented and patent-pending technology with the obvious upside being the proven innovation that technology brings and the down side being no exclusivity, instead of investing in their own R&D and patent protection where the upside may be exclusivity and the down side may be inferior or unproven technologies.

Only time will tell what, if any, impact Tesla-Patent Commons will have on the electric vehicle market.

Non-Conformist Korean Car Companies Quickly Settle Gov’t Greenwash Suit for $100 Million

November 29th, 2014

A previous post discussed a host of class action lawsuits against Kia and/or Hyundai accusing the Korean automakers of making false or misleading fuel efficiency claims in their advertising and marketing materials.

Those suits allege that the automakers built advertising campaigns around representations that a number of their vehicles achieved gas mileage in the 40 mile per gallon range when the companies knew or should have known the actual mileage was significantly lower.  One major problem, it seemed, was flawed fuel economy testing by the car makers.

A recent lawsuit brought by the Environment and Natural Resources Division of the U.S. Department of Justice (DOJ) and the California Air Resources Board (CARB) provides more revelations about the automakers’ faulty testing (and led to a prompt settlement by Hyundai and Kia including a substantial monetary penalty).

Filed November 3, 2014 in federal court in Washington, DC, the complaint alleges that Hyundai and Kia sold over a million vehicles that did not meet the requirements of the Clean Air Act because the automakers used improper testing procedures and analysis and submitted faulty fuel economy data to the U.S. Environmental Protection Agency (EPA).

The subject vehicles include the 2012 and 2013 Hyundai Accent, Elantra, Veloster and Santa Fe and 2012 and 2013 Kia Rio and Soul.

Under the Clean Air Act, any new motor vehicle sold in the United States must be covered by a Certificate of Conformity issued by the EPA.  To obtain a Certificate of Conformity, a manufacturer must submit an application for motor vehicles it intends to sell in the United States.

One of the metrics a manufacturer must test and include in the application is a vehicle’s road load force, a measure of the internal and external forces that cause a vehicle to lose speed, such as driveline friction and wind resistance.  The road load force can be calculated by performing a “coastdown” test on the vehicle.

A vehicle’s fuel economy depends, in part, on its road load force.  The complaint explains the relationship between road load force and greenhouse gas emissions as follows:

A vehicle with a low road load force has relatively higher fuel economy and emits lower amounts of greenhouse gases because the vehicle efficiently maintains its momentum.  Conversely, a vehicle with a higher road load force has lower fuel economy and emits more greenhouse gases because it needs to burn more fuel to counteract that road load force and maintain speed.

According to the complaint, Hyundai and Kia, which worked together on testing of the subject vehicles for the Certificate of Conformity applications, used improper testing procedures and analysis, including cherry-picking results, leading to inaccurately low reported road load forces:

Defendants improperly selected results from test runs that were aided by a tailwind rather than correctly using the results of test runs in both directions, Defendants selected favorable results from test runs rather than average the results from the larger set of tests, Defendants restricted their testing times to periods when the temperature allowed vehicles to coast farther and faster, and Defendants specially prepared vehicle tires for optimized test results.

As a result, the EPA’s investigation and audit testing determined that the actual road load forces for the tested vehicles were about 14-54% higher than the automakers provided in their applications for Certificates of Conformity.

Hyundai and Kia quickly settled with the DOJ and CARB.  Under the settlement, the automakers did not have to admit the truth of the allegations but will have to pay about $100 million, about $93.6 million to the DOJ and about $6.4 million to the CARB.  This is the largest penalty ever imposed under the Clean Air Act.

The car companies will also forfeit 4.75 million greenhouse emission credits – earned for building vehicle emissions under the legal limit – which they had previously claimed and are estimated to be worth over $200 million.

Sometimes it’s better – for the environment and for the bottom line – to conform.

In Eco-mark Examination USPTO Getting into Anti-Greenwashing

October 24th, 2014

A recent article in the the New York Law Journal caught my attention for an interesting development in examination of eco-mark applications in the U.S. Patent and Trademark Office (USPTO).  We’ve known for some time that marks containing terms such as “green,” “clean,” “eco-” or “enviro-” are very likely to be rejected as merely descriptive of environmentally friendly products or services.

In “Changing Climate for ‘Green’ Trademarks,” Robert Scheinfeld of the Baker Botts firm notes that the USPTO has very recently begun to reject eco-marks on the basis of deceptiveness.

This is almost the opposite of a descriptiveness rejection:  where a descriptive eco-mark immediately communicates to consumers the environmentally friendly nature of the goods or services, a deceptive eco-mark is one that signals environmentally friendly characteristics while the goods or services do not actually confer an environmental benefit.

The piece cites a 2013 decision by the USPTO Trademark Trial and Appeal Board (Board) as a case in point.  In re Kitaru Innovations Inc. involved an application to register the mark GREEN SEAL (shown above) for adhesive tape and tape dispensers.

The USPTO examining attorney refused registration on the ground that the mark was deceptively misdescriptive under Section 2(e)(1) of the Lanham Act and comprises deceptive matter under Section 2(a) in that it falsely and materially indicates that the applicant’s goods are environmentally friendly when, in fact, they are not.  The Board affirmed the refusal.

For deceptive misdescriptiveness under Section 2(e)(1), the Board’s starting point, by now a very familiar one, was that the word “‘green’ directly conveys information to potential consumers that the tape products are environmentally friendly.”

To be misdescriptive, a mark must be merely descriptive of a significant aspect of the goods which they could plausibly possess but in fact do not.  The Board concluded that the GREEN SEAL mark could be merely descriptive if the products were, indeed, green:

The two word composite term, “Green Seal,” would be merely descriptive if applicant’s goods were made of eco-friendly materials. Green would convey information about the environmental claims that the tape possessed, and a most important feature of adhesive tape or adhesive packaging tape is that it “seals,” or “tightly or completely closes or secures a thing.”  

Interestingly, but immaterial to the Board’s decision, the applicant made no claim that its products are eco-friendly.  Rather, the “Green Seal” mark is just one in a line of color-coded adhesive tape products that also includes “Black Seal,” “Blue Seal” and “Double Blue Seal.”

Nevertheless, the Board concluded that many of the affected consumers would be likely to believe that the term “Green” in the GREEN SEAL mark describes the adhesive tapes as being environmentally friendly.  The Board noted evidence of record showing that adhesive tape products in particular are increasingly the subject of environmentally friendly claims, and consumers would expect the applicant’s tape to be eco-friendly:

As seen above in the pages of blogs and advertisements from the Internet, an increasingly common feature of adhesive and packaging tape is that it is ecologically sound. Sometimes the focus is on how the tape deteriorates over time, and others times it has to do with the use of recycled materials. The term “Green” is frequently used to capture this idea. Accordingly, consumers encountering applicant’s mark with the term “Green” will likely understand the term in context to refer to the fact that this tape is an environmentally-friendly product.

To be deceptive matter under Section 2(a), the misdescription must be likely to affect the relevant consumers’ decision to purchase the products.  Here, the Board noted the “urgency” for consumers to recycle and purchase products made of recycled or biodegradable materials.  The evidence of record showed that there is a segment of purchasers that would be more inclined to buy eco-friendly adhesive tape products.

Accordingly, the Board concluded that the perceived green quality of the tape products would be likely to affect the purchasing decisions of relevant consumers:

The level of excitement on the part of consumers reflected above over the availability of environmentally friendly / green tape products demonstrates that this characteristic would be material to the decision of consumers to purchase applicant’s goods. Accordingly, we find on this record that such a misdescription is likely to affect the decision to purchase the goods, and the third and final prong of the Section 2(a) deceptiveness test has also been satisfied.

This is the first decision I’ve seen where an eco-mark was refused registration by the USPTO for being deceptively misdescriptive and/or deceptive matter.  It’s unclear whether or not this is actually a trend.  I plan to conduct some research on this topic and discuss my findings in this space.

What is clear, though, is that the USPTO has made an initial foray into the subject of greenwashing and has at least begun to use deceptive misdescriptiveness and deceptive matter as tools for combating the problem.

Burning Ring of Fire: Greenwashing Case Alleging Fried Solar Panels to Move Forward

October 6th, 2014

In February, three individuals filed a proposed class action lawsuit against BP Solar and Home Depot accusing the solar panel maker and retailer of greenwashing in connection with certain solar panels (see the complaint here).

Plaintiffs Michael Allagas, Arthur Ray, and Brett Mohrman alleged that there is a latent defect in the junction box of the BP solar panels that causes the box to fail and results in a total loss of functionality of the solar panels.

Specifically, the plaintiffs allege that the defect in the junction box and solder joints between connecting cables makes the solder joint overheat, which causes electrical arcing that generates temperatures of 2000-3000 degrees.  According to the plaintiffs, the heat melts the junction box, burns the cables and solar panels, and shatters the glass cover of the panels.

The plaintiffs also alleged that BP’s advertising and marketing materials about the solar panels are false or misleading.

While the northern California federal court hearing the case previously dismissed some of the plaintiffs’ claims, a recent decision denied BP and Home Depot’s motion to dismiss the remaining claims.

The court found the pleadings sufficient to support plaintiffs’ express warranty claims for breach of the express defect and power warranties because they stated that a latent defect existed at the time the product was sold and that they relied upon BP Solar’s power warranty in purchasing the solar panels.

Similarly, the implied warranty claims were held to be sufficient because plaintiffs clearly alleged a latent defect in the solar panels that renders them unmerchantable and unfit for their intended use.

With respect to the advertising and marketing materials, the plaintiffs cited various sweeping representations made by BP Solar, including:

Promises that the solar panels will “drastically reduce or eliminate your electric bills . . . forever,” and will “increase the value of your home.”

A statement that “No other system can operate at a higher level of safety than those offered by BP Solar.”

BP Solar also made some specific representations about the output and life of the solar panels, including product data sheets warranting 80% power output for a 25-year period and a 90% power output for a 12-year period with a 5-year warranty of materials and workmanship.

The court held that plaintiffs’ claims under the Consumer Legal Remedies Act could go forward because the statements include “factual representations” that could be “likely to deceive a reasonable consumer.”  The court concluded:

A reasonable consumer could have relied on these statements as descriptions of the quality and power capabilities of the solar panels.

The court maintained the plaintiffs’ fraud claims because they allege that BP knew of and concealed the defect:

The amended complaint also alleges BP’s knowledge of the latent defect in the solar panels, BP’s concealment of the defect, particular instances when information regarding the defect and risk of fire could have been revealed, and the warranties all three plaintiffs relied upon that failed to include the concealed information.

The court also denied the defendants’ motion to strike the class allegations, but left the door open for BP and Home Depot to contest those upon a subsequent motion by the plaintiffs for class certification.