July 2017

Snortable Chocolate Fails the Smell Test, but What Exactly Is It?

July 13, 2017
Drug Policy, FDA, Food and Agriculture

Tommy Tobin, MJLST Guest Blogger

 

Snorting chocolate does not sound like a good idea. In fact, it sounds downright crazy. Enter the aptly named “Coco Loko.”

As reported by the AP, Coco Loko is a cocktail of cacao powder and common energy-drink ingredients, such as guarana and taurine. Marketed by a company called Legal Lean, the product makes several bold claims and promises, including feelings similar to ecstasy and “a steady rush of euphoric energy that is great for party goers to dance the night away without a crash.” Oddly, that promised effect is juxtaposed with promises of “calm focus” and “natural relaxation.”

Legal Lean advises users to “consume responsibly.” Warnings include the all too familiar boilerplate that product statements have not been evaluated by FDA and that the products are not intended to diagnose or treat any disease. A notable product warning also advises potential customers that Coco Loko is “not recommended for children or pregnant women.” Legal Lean also notes that the product “may impair your ability to drive a car or operate machinery, and may cause health problems.” It is certainly helpful that the company recognizes that snorting a chocolate concoction up one’s nose may result in health issues and is warning potential consumers accordingly. Self magazine summarized the situation succinctly: “If it sounds like a bad idea to snort what basically amounts to glorified hot chocolate mix, you’re right.”

As the Huffington Post recently put it, “snortable chocolate exists now, for some reason.” The mere fact that this product exists raises myriad questions, not least of which is what the product actually is and how it will be regulated.

According to ABC News, FDA is currently weighing whether the product falls within its jurisdiction and is currently “not prepared to issue a determination regarding whether and how this product is subject to FDA jurisdiction at this time. In reaching that decision, FDA will need to evaluate the product labeling, marketing information, and/or any other information pertaining to the product’s intended use.”

While the intricacies of regulatory classifications are enough to make one crazy, Coco Loko’s regulatory future remains to be seen. As the administrative law bloodhounds at FDA continue their work sniffing out the proper classification for this product, here are some preliminary thoughts.

 

Is Coco Loko a Food?

Strictly speaking, probably not. The statutory definition of food, 21 U.S.C. § 321 (f), is not tremendously helpful here. The statute’s most applicable definition defines “food” as an article used for food or drink for man or other animals. Snorting something through one’s nose is not generally how most people consume their food or drink, especially as the nose is woefully devoid of taste buds.

Legal Lean may argue that an alternative use of the product is as a hot chocolate mix. Presumably, the Coco Loko powder could be used as a drink when dissolved in hot water. Even so, the company markets the product as “infused raw cacao snuff.”

The product’s marketing as “snuff” is highly suggestive that the company does not consider that the product is meant to be food, given that “snuff” is taken through the nose. Put differently, the company may huff and puff that the product is a “food,” but in the end, the stuff is “snuff” by their own admission.

 

Is it a Drug?

Possibly. Coco Loko is likely not a “drug” under 21 U.S.C. § 321 (g). One applicable definition of “drug” includes items “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals.” Such an intention is expressly disclaimed by the makers of Coco Loko.

Another definition of “drug” applies to “articles (other than food) intended to affect the structure or any function of the body of man or other animals,” with a carve-out for foods and dietary supplements. Coco Loko does promise a rush of serotonin and endorphins, as well as “increased overall happiness.”

The structure or function claims made by Coco Loko could make it a “drug” if it is found to be neither a food nor dietary supplement. Put another way, the product appears to be an inhaled stimulant, and regulators could plausibly put it in the category of “drug” given the claims the product is making, in the case that the product does not fit in other categories.

 

Is it a Dietary Supplement?

It depends. Regulators could label Coco Loko as a “dietary supplement” under 21 U.S.C. § 321 (ff). Just as the definition of “food” was quite broad, so too is the statutory definition of “dietary supplements,” which helpfully notes that the term:

 

“1) means a product (other than tobacco) intended to supplement the diet that bears or contains one or more of the following dietary ingredients:

(A) a vitamin;

(B) a mineral;

(C) an herb or other botanical;

(D) an amino acid;

(E) a dietary substance for use by man to supplement the diet by increasing the total dietary intake; or

(F) a concentrate, metabolite, constituent, extract, or combination of any ingredient described in clause (A), (B), (C), (D), or (E).”

 

Given the inclusion of cacao in the product, a colorable claim could be that Coco Loko contains a dietary substance used by man to supplement the diet. That said, is someone actually supplementing their diet by inhaling through their nose? Not being a doctor myself, I can only surmise that the snorted chocolate may have a circuitous path from the nose to one’s stomach—if it ends up there at all.

More on the nose, US News & World Report notes that the product’s label includes B vitamins, ginkgo biloba, blood flow-improving amino acid L-Arginine, as well as energy drink staples guarana and taurine. So, it would seem that Coco Loko would meet the vitamin and amino acid test.

Other aspects of the “dietary supplement” definition in 21 U.S.C. § 321 (ff) include that the item must not represent itself for use as a conventional food or as a sole item of a meal or the diet. “Dietary supplements” must also be labeled as such. If its labeling does not call it a “dietary supplement,” Coco Loko cannot be a “dietary supplement.” According to Ars Technica, Legal Lean is already marketing Coco Loko as a “dietary supplement.”

Incorporated by reference into the § 321 (ff) definition of “dietary supplements” is the requirement that the product be intended for ingestion under 21 U.S.C. § 350 (c)(1)(B). That section requires products be “intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form.” While Coco Loko is a powder, it is unlikely that it is “ingested” in the typical meaning of that term. The statutory provision also provides an alternative definition for items “not intended for ingestion in such a form” that are otherwise “not represented as conventional food and is not represented for use as a sole item of a meal or of the diet.” Both incorporated definitions are predicated on “ingestion,” and Coco Loko’s method of intake is unlikely to fit the plain meaning of “ingestion.”

By analogy, a suppository also bypasses the mouth when they are taken into the body. Even so, suppositories generally go into one end of the alimentary canal—rather than the sinuses or the lungs. Moreover, neither suppositories nor this inhaled chocolate are “ingested.” No less an authority than the Oxford English Dictionary includes a definition of “ingest” that equates ingestion with the introduction of material into the stomach or mouth.

Coco Loko faces an uphill battle getting a “dietary supplement” label given that is probably not “ingested” or intended for ingestion. According to the FDA Law Blog, “FDA has consistently taken the position that articles not intended for ingestion do not qualify as dietary supplements.” In the end, FDA may find that “ingestion” is distinct from insufflation, or the act of breathing something into the body.

Even if Coco Loko is labeled as a “dietary supplement” and met other aspects of the § 321 (ff) definition, the Secretary of Health and Human Services, pursuant to 21 U.S.C. § 342 (f), could conceivably find that it presents a “significant or unreasonable risk of illness or injury.” While unlikely, the Secretary has the authority to declare a dietary supplement so unsafe that it poses “an imminent hazard to public health or safety.” That said, do not hold your breath for such a declaration—if you do, it’d be harder to inhale the chocolate.

 

Concluding Thoughts

While the safety and propriety of snorting crystalline chocolate powder through one’s nostrils is up for debate, FDA is hard at work sniffing out the proper regulatory classification of Coco Loko.

My preliminary thought is that Coco Loko might be labeled a “dietary supplement,” given its ingredients. On the other hand, its method of delivery—through the nasal passage—is not one typically seen in dietary supplements and is unlikely to fit the “intended for ingestion” prong of the incorporated statutory definition.

Alternatively, FDA may label the product a “drug,” especially with its “structure or function” claims. Either way, if you think I’m going to go snort chocolate anytime soon—you’re loko.

U of M Asserts Sovereign Immunity Prevents USPTO From Invalidating Its Patents

July 11, 2017
Constitutional Law, Patent Infringement Damages, Patents

Prof. Richard Stern, MJLST Guest Blogger

The University of Minnesota owns a number of patents on cell phone signal processing technology that was invented by Professor Georgios Giannakis of U of M’s Department of Electrical and Computer Engineering and his colleagues. The U of M claims that AT&T, Sprint, T-Mobile, and Cellco Partnership (a joint venture between Verizon and Vodaphone, doing business as Verizon Wireless) are infringing five of these patents, and in 2014 it sued the companies in Minnesota federal district court for patent infringement. The U of M is “a great research university,” President Eric Kaler said, and “must vigorously protect our faculty, [their] discoveries and the overall interests of our university.” (The U collects about $40 million annually in royalties from licensing and the commercialization of faculty work.) Apparently, the cell phone carriers infringed the patents by utilizing Ericsson radio chips that code signals for wireless transmission and practicing patented methods the chips performed.

 

The case was assigned to Chief Judge John R. Tunheim in Minneapolis, who denied the defendants’ motion to dismiss the case for defective pleading, in September 2015. He did reject the U’s claim, however, that the defendants engaged in “willful blindness” in infringing the patents. Judge Tunheim said that the U “alleges no actions that would constitute deliberate avoidance of knowledge” that they were infringing, although they did know of the patents and they “actively entice[d] their customers through advertising, marketing and sales activity to use [their] infringing products.”

 

Ericsson, the wireless carriers’ equipment supplier, then acted to protect its defendant customers against the U by intervening in the Minnesota infringement suit. Ericsson then filed inter partes review (IPR) proceedings in the USPTO to invalidate the U of M patents on which the U was suing the carriers. An IPR is a new type of administrative proceeding that the recent America Invents Act established to provide a swifter and supposedly cheaper way for small companies to resist demands by trolls that they pay patent tribute. Instead of engaging in district court litigation, an aggrieved party can seek an IPR before the USPTO, which then employs its patent expertise to determine whether the patents it issued are invalid, and (if so) consequently relieving the aggrieved party from infringement liability (an invalid patent cannot be infringed).

 

Here is where the complications set in. The 11th Amendment preserves state sovereign immunity against suit—“The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States . . . .” Thus, when a patent owner sued a Florida state agency that provided college tuition payment plans, for patent infringement, the Supreme Court held the law subjecting states to infringement liability unconstitutional under the 11th Amendment. Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999). Accordingly, in two January 2017 IPR cases, the USPTO held that the 11th Amendment required it not to allow proceedings before it against Maryland and Florida. Neochord, Inc. v. Univ. of Maryland, Baltimore and Harpoon Medical, Inc., IPR2016-00208 (May 23, 2017), http://www.ptablitigationblog.com/wp-content/uploads/2017/06/IPR2016-00208.pdf; Covidien LP v. University of Florida Research Found. Inc., IPR2016-01274 (Jan. 25, 2017), http://www.finnegan.com/files/upload/LES_Insights_Column/2017/CovidienvUFIPRNos20160126476.pdf. Although waiver was urged, the USPTO said it was inapplicable because the 11th Amendment is jurisdictional—it deprived the tribunal of any jurisdiction to act, so that jurisdiction could be considered at any time. Waiver requires an affirmative act of invoking federal jurisdiction in the relevant tribunal, and that had not occurred.

 

Ericsson argued, in support of its claim that there was jurisdiction to hear its IPR challenges, that the U had waived its 11th Amendment immunity by suing Ericsson’s customers in the Minnesota district court. Ericsson said that the U “has consented to jurisdiction,” when it sued Ericsson’s customers in the district court, because by filing lawsuits against Ericsson’s customers, “it could surely anticipate” that Ericsson would bring an IPR case at the USPTO to invalidate the patents asserted against its customers for using its products. The U has now urged the USPTO to dismiss Ericsson’s IPR cases, insisting that it has not waived its sovereign immunity by suing the phone carriers—not Ericsson, a third party to the U’s patent infringement suits.

 

The U argues that the law is clear that a waiver must be personal, i.e., filing a lawsuit or counterclaims in the same action and in the same forum. Thus, in Regents of Univ. of New Mexico v. Knight, 321 F.3d 1111, 1125 (Fed. Cir. 2003), the Federal Circuit held that it would be unfair to let New Mexico sue in federal court to enforce a right to ownership of patents arising from contracts “and, at the same time, to claim immunity from liability [in the same case] for royalties or other compensation arising from those same contracts and conduct.” The court added, “Moreover, because a state as plaintiff can surely anticipate that a defendant will have to file any compulsory counterclaims [in the same case] or be forever barred from doing so, it is not unreasonable to view the state as having consented to such counterclaims.” Id. at 1126. On the other hand, the Federal Circuit has held that “a state that files a [patent infringement] lawsuit in one district court does not waive its immunity in a related [invalidity declaratory judgment] lawsuit filed by a party in another district court.” Board of Regents of the Univ. of Wis. Sys. v. Phoenix Int’l Software, Inc., 653 F.3d 448, 462 (7th Cir. 2011) (citing Tegic Communications Corp. v. Board of Regents of the Univ. of Texas Sys., 458 F.3d 1335, 1342 (Fed. Cir. 2006)).

 

In the Tegic case, in which UT sued Tegic’s customers for patent infringement in Texas, the Federal Circuit held that UT waived its immunity against a declaratory judgment counterclaim in Texas. But UT did not waive immunity against the separate declaratory judgment action that Tegic wanted to bring in Washington (where Tegic resided). The court said that if Tegic wanted to litigate patent validity, it could intervene in the Texas case and subject itself to infringement liability if the patent was valid and infringed. This is consistent with the Supreme Court’s concept in the College Savings Bank that the 11th Amendment is more about where a state is willing to be sued than whether it can be sued—for example, most states allow suits against them in their own courts of general jurisdiction. (But they don’t want to be sued in another jurisdiction.)

 

Based on this case law, the U argued: “IPR petitions are [not] counterclaims nor adjudicated in the same forum—they are a different action brought in a different forum.” Further, “a state that files an infringement action does not waive its immunity from a different action challenging the patent in a different forum.” The USPTO had said previously that it was not passing on what would happen if the patentee did file a patent infringement suit, as U of M did here. Furthermore, Ericsson did intervene in the Minnesota district court patent infringement suit, as the Tegic court said the equipment seller should if it wanted to challenge validity. But the Minnesota district court has stayed the federal patent action (at Ericsson’s request) to await the result in the IPR case, as district courts usually do in order to let the experts in the USPTO resolve the patent issues for them. (Presumably, the court will vacate its stay if the IPR case is dismissed.)

 

The U quoted the Federal Circuit opinion in Tegic that insisted that Tegic could not show that adjudication of its claim of invalidity was “not available in the Texas action,” and the U then argued, “Similarly, Ericsson cannot show that adjudication of invalidity counterclaims is not available in the Minnesota court,” where the U has (constructively) waived its immunity. There is a serious conflict here between the respective policies of the 11th Amendment that states should not be subjected to forums not of their choice and of the America Invents Act that a cheap, fast, expert determination of patent validity should be available in lieu of litigation in courts. Like the College Savings Bank case, this case may well end up in the Supreme Court. One important issue, not raised or resolved so far, is whether Congress may constitutionally impose, as a condition of the statutory right to acquire the benefit of a patent, and thus make as an integral element of the patent right, that the patent is subject to validity determination in IPR proceedings. Or would the 11th Amendment make that an unconstitutional condition on a benefit, as applied to a state, rather than a legitimate part of the statutory definition of a patent right?

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