USDA Seeking Ag Competition Comments, Trademark Exhaustion, and More

Trademark Exhaustion News

USDA Requests Comments on Anti-Competitive Issues in Seed, Fertilizer, and Ag Inputs

USDA recently launched an inquiry seeking public comments on the current market structures and consolidation in three market segments: (i) fertilizer, (ii) seed and agricultural inputs, and (iii) retail. Stemming from the 2021 Executive Order, “Promoting Competition in the American Economy,” the inquiry aims to gather information on the effects of consolidation in key agricultural sectors which will be used to shape policy solutions.
USDA’s notice cites several statistics that suggest that industry consolidation has significantly reduced competition, squeezing farmers and ranchers into unsustainable positions, raising prices for consumers, and undermining the American economy. Examples include:

  • Four companies supply 75% of U.S. nitrogen fertilizer
  • Prices for fertilizer increased 60% in 2021
  • Four companies account for 85% and 76% of corn & soybean seed markets
  • Seed prices for genetically modified seed rose more than 700% from 2000 to 2015
  • Two companies account for more than 90% of chicken genetics for chicks
  • Four companies control over 80% of beef sales

The inquiry poses many questions for public comment in each of the three market segments -for example:

  • Is there evidence that firms have controlled or reduced supply to keep supply low and prices high?
  • Does the existing IP system, as relating to seeds and other agricultural inputs, effectively meet the statutory goal of rewarding invention through protection from competition for a fixed term?
  • Do farmers, ranchers, and other stakeholders have sufficient access to off-protection and generic options?
  • Please comment on the presence of, and any concerns around, licensing restrictions in seeds or other agricultural inputs.
  • How does competition and concentration among distributors and other parts of the wholesale food market relate to food retail concentration and competition?
  • Are challenges with food deserts aggravated by concentration or competition issues in the food and agricultural supply chains?

Each of the three issues includes a link for submitting comments which can be found HEREThe comment period ends on May 16, 2022.

Selling Products that Incorporate a Trademarked Product

A recent case clarified that a trademark owner’s rights to control downstream sales of trademarked goods is generally “exhausted” by the first authorized sale. Plaintiff, SIG, owned marks for Bluetooth wireless technology (actually certification marks), including this one:

To use the marks, SIG required manufacturers to join its organization, execute a licensing agreement, pay fees and certify compliance with standards. Defendant, FCA, was the maker of Fiat, Chrysler, Dodge, and Jeep vehicles, many of which contained Bluetooth-equipped headsets made by 3rd party suppliers. Although the 3rd party suppliers were qualified by SIG and could use the marks, FCA was not. Nevertheless, FCA used SIG’s Bluetooth marks on the headsets. SIG sued for trademark infringement, among other claims.
The Federal Circuit held that under the “first sale doctrine” the first authorized sale of a trademarked product ends trademark owner’s right to control further distribution of the product (subject to certain exceptions). Further, “the first sale doctrine applies when a mark is used to refer to a component incorporated into a new end product.” Thus, a downstream manufacturer may reference the trademark of a component in a new product without infringing the rights of the trademark owner. Of course the downstream manufacturer must still take care how it refers to the incorporated trademark and cannot use it in such a way that would confuse or deceive consumers.
Thus, a downstream manufacturer can call out features of its products that incorporate someone else’s trademarked component in advertising (our new stainless steel beer koozies containing Bob’s Bluetooth speakers), but be sure to give credit were credit is due.

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