Continuing its focus on "Made in the USA" claims, the
Federal Trade Commission ("FTC" or
"Commission"), on February 1, applied its standard for
those claims to "Built in the USA" claims by entering
into a settlement with water filtration company, iSpring Water
Systems, LLC ("iSpring").
In a move that appeared contrary to previously released
guidance, the FTC action seemed to equate the term
"built" with "made" rather than the term
"assembled." iSpring had claimed that its water
filtration systems and parts were "Built in the USA," but
the FTC pointed out in its complaint that the products were either
"wholly imported" or "made using a significant
amount of inputs from overseas." As a preliminary part of
its analysis concluded that the company's claim was deceptive,
the FTC must have determined that "Built in the USA" was
the equivalent to an unqualified "Made in the USA" claim.
The FTC's standard for "Made in the USA" claims is
that the manufacturer should have a reasonable basis to back up the
claim that the product is "all or virtually all" made in
the U.S. The Commission therefore concluded that iSpring was
deceiving consumers with misleading claims about the origin of its
In 1998, the FTC released guidance determining that consumers would
interpret the term "manufactured" to be the equivalent of
"made." The guidance distinguished those terms from the
term "assembled", clarifying that a product that includes
foreign components may be labeled "Assembled in the USA"
without qualification when its principal assembly takes place in
the U.S. and the assembly is "substantial."
But in this case, the word at issue was "built." By
applying the "Made in the USA" standard to "Built in
the USA" claims, the FTC appeared to equate "built"
with "made" or "manufactured" rather than with
"assembled." Empirical evidence as to how consumers
actually interpret the term "built" might help to
demonstrate its reasonably held meaning. As it currently stands, it
is unclear whether the word "assembled" is still
considered distinct from the term "made," or whether it,
too, might be held to a "Made in the USA" standard.
The FTC continues to be serious about "Made in the
USA" claims. We will keep you updated on developments in this
This article is presented for informational purposes only
and is not intended to constitute legal advice.
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