Monthly Archives :

April 2017

Federal District Court Rules that FIFRA Precludes Claims of Copyright Infringement of the Basic Manufacturer’s Label

In an April 10 decision, the U.S. District Court for the Middle District of North Carolina ruled that FIFRA precludes claims of copyright infringement for the required parts of the labels of “me-too” registered products.  The decision was issued in Syngenta Crop Protection, LLC v. Willowood, LLC., a lawsuit in which Syngenta alleged that Willowood had willfully and knowingly violated copyright protections of one of its product labels when Willowood used substantial portions of the label for a generic me-too version of the product in question.  The North Carolina District court decision rejected the conclusions of the U.S. District Court for the Eastern District of Pennsylvania issued in a previous case, FMC Corp. v. Control Solutions, Inc., involving similar claims of copyright infringement of the pesticide label.

 

In a very lengthy 2005 decision, the Pennsylvania District court found that Control Solutions, Inc. had willfully infringed on the copyright of the label of one of FMC’s proprietary pesticide products (TalstarOne).  The court stated, “…To quickly enter the same market, defendant CSI took an impermissible short-cut.  Instead of investing the resources necessary to develop an independent product label, CSI simply appropriated FMC’s existing copyrighted labels. Wholesale copying, as CSI did with FMC’s label, is not consistent with the statutes, regulations or process mandated by the EPA for having a me-too pesticide registered to permit the sale of a generic pesticide product.”  The Pennsylvania District court issued a temporary injunction against CSI “to prevent further sales or facilitation of sales of any product utilizing a product label that has been approved by the EPA…based upon a me-too submission by CSI that consists of a product label based on the virtually verbatim copying of the TalstarOne label.”

 

However, in its recent ruling, the North Carolina District court found the decision issued in 2005 to be “unconvincing,” concluding instead that federal pesticide law “contemplates that a [generic] applicant will copy from the original pesticide label in ways that would otherwise infringe a copyright…Congress intended a narrow exception to copyright protection for the required elements of pesticide labels as against me-too registrants.”

 

The issue of copyright infringement as it pertains to a generic registrant’s use of a basic manufacturer’s product label for a me-too pesticide has been a contentious legal topic over the years.  Shortly after the decision in FMC Corp. v. Control Solutions, Inc., CPDA wrote a July 11, 2005 letter to Susie Hazen who was then OPPTS Deputy Assistant Administrator at EPA.  In its letter, CPDA voiced concerns that the court decision could trigger a deluge of me-too label changes submitted to the Agency by companies seeking to avert the possibility of copyright infringement legal action brought by the original manufacturer.  CPDA also pointed out the difficulties inherent in making each product label different from other labels so as to avoid the risk of infringing on the copyright while at the same time making sure that any variations would not confuse the user.

 

EPA responded with a letter agreeing with these and other concerns raised by CPDA.  In its letter, the Agency affirmed the practice of the Office of Pesticide Programs (OPP) under FIFRA Section 3(c)(7)(A) to encourage me-too product labels to be identical or substantially similar to the labels of the products on which their registrations are based.  EPA emphasized that similar products need to communicate use instructions and warnings in a clear and consistent manner to ensure that the products are used appropriately.  The Agency cautioned that variations on the label for similar products could diminish EPA’s ability to enforce pesticide labeling in a consistent manner thus defeating the primary purpose of labeling.  CPDA will continue to keep a watchful eye on any further legal developments on this issue should they occur.

CPDA Provides OSHA an Evaluation of Cost Impact of HCS 2012 Relabeling Requirements

On April 21, 2017 CPDA President, Sue Ferenc wrote a letter to Maureen Ruskin, Deputy Director of OSHA’s Directorate of Standards and Guidance, that details the significant financial costs that would be imposed upon distributors of non-pesticide agricultural products under the relabeling requirements of  paragraph (f)(11) of the  Hazard Communication Standard (HCS 2012).  CPDA’s letter was submitted in response to a request made by OSHA, during a November 16, 2016 stakeholder meeting, that the Council evaluate the regulatory ramifications of substituting the word “manufactured” for the word “shipped” in paragraph (f)(11).  During the November stakeholder meeting, OSHA also requested that CPDA provide supplemental information on costs associated with relabeling products in warehouses due to the current use of the word “shipped” in the regulation, instead of the word “manufactured” as CPDA has proposed.

 

OSHA’s request came as the Agency announced that it would be initiating efforts to modify HCS 2012 to better align the rule with the sixth revision of the GHS.  Agency officials have signaled that potential revisions to HCS 2012 could encompass a range of implementation issues including those emanating from section (f)(11) of the regulation that requires non-pesticide agricultural product labels to be updated within six months of receiving new hazard information before they can be shipped from the warehouse.

 

CPDA has engaged extensively with OSHA on this issue voicing concerns that warehouses are not equipped to safely relabel sealed product containers and that this requirement would subject warehouse workers to unnecessary health and safety risks.  Moreover, CPDA has argued that OSHA’s switch from “hazard determination” to “hazard reclassification” as the trigger for relabeling product under HCS 2012 is likely to result in a “dynamic” or recurring and costly compliance requirement that will significantly expand the scope of the (f)(11) provision of the regulation.  In addition, CPDA has objected that this provision of HCS 2012 conflicts with another requirement in the rule that prohibits defacing or removing labels from hazardous chemicals in sealed containers in warehouses.

 

In its April 21st letter, CPDA reiterated its recommendation that OSHA follow the “Released for Shipment” precedent that was developed when EPA amended its pesticide container and containment final rule to identify the point in time that a product first enters commerce and becomes subject to label compliance enforcement.  This is when the product leaves the production line for storage, sale or distribution, and is packaged and labeled in a manner in which it will be distributed, sold or stored.  Thus, CPDA explained, a production unit is “Released for Shipment” only once and retains that status, including its label compliance status, until it dissipates in commerce.

 

In its letter, CPDA summarized the results of an informal survey of its member companies regarding the costs and options associated with the potential need to relabel product that was compliantly labeled when manufactured.  CPDA pointed out that for the agrotechnology product industry alone, if revision of HCS 2012 does not exempt HCS 2012-compliantly labeled warehoused products from the requirement to be relabeled given reclassification or rulemaking, all individual “end-use” product containers could need to be relabeled.  “A very conservative estimate of the number of agrotechnology product containers that would have to be relabeled by distributors,” CPDA stated, “would be approximately 1,250,000 containers on 13,500 pallets.”  CPDA noted that the costs of relabeling or reworking product in the warehouse or reworking the product by shipping and repackaging elsewhere, will vary greatly depending on such factors as product type (liquid versus dry), container type (small jugs, large bulk tanks/totes, plastic bags), and the volume as well as value of the product.  CPDA emphasized, “There are no economies of scale in relabeling product so the cost to relabel high volumes of product containers can be crippling.”

 

As OSHA proceeds with its consideration of possible revisions to HCS 2012, CPDA will continue to advocate for the requested change from “shipped” to “manufactured” in any modification of the regulation.  A copy of CPDA’s April 21st letter may be accessed by clicking here.

EPA Denies Petition Seeking Chlorpyrifos Ban

On March 29, 2017, EPA Administrator Scott Pruitt signed an order announcing the Agency’s decision to deny a 2007 petition filed by the Pesticide Action Network North America (PANNA) and the Natural Resources Defense Council (NRDC) seeking the revocation of all tolerances for chlorpyrifos and the cancellation of all product registrations for the chemical.  The order appeared in the April 5, 2017 Federal Register.  Among the claims asserted by the petitioners was that EPA failed to adequately assess the potential for chlorpyrifos to cause neurodevelopmental effects in children at exposure levels below the Agency’s existing regulatory standard (10% cholinesterase inhibition).  In an effort to resolve the scientific issues surrounding the potential risks associated with chlorypyrifos, EPA committed to completing the expedited registration review of the chemical several years in advance of the October 1, 2022 statutory deadline.  Although EPA had expedited its registration review, the petitioners were not satisfied with the Agency’s progress in responding to the petition and filed a lawsuit in the 9th Circuit Court of Appeals to compel EPA to either issue an order denying the petition or to grant the petition by initiating the tolerance revocation process.

 

In August 2015, the Court issued a ruling in favor of the petitioners.  Following the judicial ruling, in November 2015 EPA issued for public comment a proposal to revoke all chlorpyrifos tolerances citing the uncertainties pertaining to the chemical’s potential to cause neurodevelopmental effects.  Subsequently, the 9th Circuit announced that it would retain jurisdiction over the chlorpyrifos matter and on August 12, 2016 directed EPA to issue a final decision on the petition no later than March 31, 2017.  In so doing, the Court made it clear that no further extensions in responding to the petition would be granted.  Pursuant to the Court order, in November 2016 EPA published for public comment notice of availability of its revised risk assessment for chlorpyrifos.

 

In its March 29, 2017 decision to deny the petition seeking a ban on the use of chloryprifos, the Agency states:

 

“Following a review of comments on both the November 2015 proposal and the November 2016 notice of data availability, EPA has concluded that, despite several years of study, the science addressing neurodevelopmental effects remains unresolved and that further evaluation of the science during the remaining time for completion of registration review is warranted to achieve greater certainty as to whether the potential exists for adverse neurodevelopmental effects to occur from current human exposures to chlorpyrifos. EPA has therefore concluded that it will not complete the human health portion of the registration review or any associated tolerance revocation of chlorpyrifos without first attempting to come to a clearer scientific resolution on those issues. As noted, Congress has provided that EPA must complete registration review by October 1, 2022. Because the 9th Circuit’s August 12, 2016 order has made clear, however, that further extensions to the March 31, 201 7 deadline for responding to the Petition would not be granted, EPA is today also denying all remaining petition claims.”

 

EPA’s denial of the petition was applauded by Sheryl Kunickis, director of USDA’s Office of Pest Management Policy who called it “a welcome decision grounded in evidence and science.”  Kunickis added, “It means that this important pest management tool will remain available to growers, helping to ensure an abundant and affordable food supply for this nation and the world.  This frees American farmers from significant trade disruptions that could have been caused by an unnecessary, unilateral revocation of chlorpyrifos tolerances in the United States.  It is also great news for consumers, who will continue to have access to a full range of both domestic and imported fruits and vegetables.”

 

It is very likely that the petitioners will turn to the courts in an effort to overturn EPA’s recent decision.  CPDA will report on further developments on this issue as they occur.  The Agency’s decision denying the petition may be accessed by clicking here.

EPA Budget Memo Details Proposed FY 2018 Funding Cuts to EPA’s Pesticide Program Activities

An article appearing in the April 5, 2017 edition of “InsideEPA.com” details severe funding cuts expected to be proposed in the Trump Administration FY 2018 budget request for EPA that promise to impact a number of Agency programs, including the Office of Pesticide Programs.  According to the article, the proposed funding reductions are set forth in a March 21, 2017 budget memo prepared by David Bloom, EPA’s Chief Financial Officer.  The article reports that the President will propose a $5.7 million and 31.7 FTE (full-time equivalent) decrease from OPP FY 2016 enacted funding levels of $6.1 million and 324.8 FTEs for protecting human health from pesticide risk.  In addition, the article states that the President will propose a reduction of $4 million and 18 FTEs from the $4.6 million in FY 2016 funding and 207.9 FTEs for protecting the environment from pesticides.  The reduced OPP funding levels set forth in the memo are accompanied by a statement explaining that the President’s budget will include language to allow the pesticide program to use fees on a broader range of activities in the program thus preventing a reduction or slowing in pesticide reviews.  The memo further states, “The program has nearly $30 million of unspent fee carryover that can help support core work.”  Elsewhere the memo states, “Sizeable unobligated balances in EPA’s FIFRA fee accounts are to be used to offset FY 2018 funding levels.  Additionally, any potential additional fee collections from the upcoming reauthorization of PRIA could help offset reductions to the program.”

 

As reported previously, current FIFRA language states that in order to release funds collected by program participants, Congress must appropriate corresponding funds to support the program.  Funds are then released on a dollar-for-dollar accounting basis.  Fees that do not have a matching appropriation cannot be spent and are held by the Agency.  As a result of dwindling appropriations and hiring freezes over the years, EPA has amassed significant funds that cannot be expended on the activities for which they were intended.  CPDA is now working in an effort to secure appropriations committee report language affirming that these “frozen” funds should be released and used in support of the Agency’s pesticide product review activities.  In addition, CPDA is focusing its efforts in seeking FY 2018 OPP appropriations levels that will ensure EPA is equipped with the resources necessary to conduct product reviews under PRIA in accordance with the statutory time frames established by law.  CPDA will keep its membership apprized of further developments on this issue as they occur.