Posted: Friday, September 28, 2012 11:04 AM
An animal rights group claims the National Pork Board dodged federal restrictions against using checkoff dollars from hog producers for political lobbying activities.
The Humane Society of the United States has filed a lawsuit against the USDA, which oversees the board, seeking to stop checkoff dollars from being paid to the National Pork Producers Council lobbying group.
The complaint alleges that the National Pork Board agreed to pay NPPC $60 million for an advertising slogan, "Pork, The Other White Meat," effectively turning the money over for "use in programs intended to influence legislation and government policy."
Chris Novak, CEO of the National Pork Board, said he's confident the court will find the sale to be valid, not a sham transaction aimed at shifting money into lobbying.
"Anyone can make that allegation. That doesn't make the allegation true," he said.
HSUS is simply looking to attack pork industry groups through litigation, he said. "I think that's what is at the heart of this lawsuit."
The National Pork Board was created in 1986 to collect assessment fees from hog farmers to raise funds for research and promotions.
HSUS contends that the "Other White Meat" slogan was voluntarily developed by an advertising agency that hoped to win a contract with the newly created checkoff program.
According to the complaint, NPPC registered itself as the trademark's owner even though it hadn't paid the advertising agency to come up with the idea.
Since its inception, $500 million of checkoff funds have been used to promote the slogan, greatly boosting its fame, the complaint said.
However, the National Pork board wasn't credited with any "equity derived from its two decades of producer-funded promotion" when it agreed to buy the slogan from NPPC in 2006, the complaint said.
The value of the trademark was determined to be $35 million, but since NPPC agreed to finance the deal over 20 years, the total cost would come to $60 million.
HSUS claims the USDA was prevented from determining whether this was a fair price because the National Pork Board refused to accept written appraisals to avoid having to publicly disclose them under the Freedom of Information Act.
The purchase of the slogan was justified as a long-term investment but the board discontinued its use in advertising just five years after buying it, with "Pork: Be Inspired" replacing the trademark as the centerpiece of its advertising campaign, the complaint said.
Even so, the board has refused to invoke an "escape clause" that would allow it to terminate the annual payments to NPPC, the complaint said.
The lawsuit asks a federal court to order the board to stop payments for the slogan and recover money already turned over to NPPC.
Novak of the National Pork Board counters that the slogan's creation predates the checkoff program and it legitimately belonged to the NPPC.
"That is their intellectual property," he said.
The board continues to use the "Other White Meat" slogan as a "heritage brand" on its consumer website and in nutrition communications. The pork chop-shaped logo that was included in the purchase price continues to be used in advertising, Novak said.