Ohio Leatheu Co

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IN THE MATTER OF OHIO LEATHER COMPANY COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THE ALLEGED • VIOLATION OF SEC. l'i OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1378. Compla-int, May 5, 1926-Decision, Feb. 11, 1929 Where the word "Kid" hRd for many years come to mean a leather made or goatskin; and thereafter a corpora.tion engaged in the tanning or leather and 1n the sale thereof to shoe manufacturers, chietly, (a) Applied the trade name "Kaffor Kid" to a calfskin leather closely resembling kid and so invoiced the same and labeled the bundles thereof in which shipped; and (b) Advertllied its said leather under such name in trade periodicals of general circulation, and featured and employed the same in display signs and circular letters sent to retail!ers,_ together with the words, In smaller letters, "the distinctive calf leather" or the words •• calf" or "calfskin" in much smaller letters ;

With the result that shoe!! of said "Kaffor Kid" were purchased ns and for kid shoes, preferred by certain classes to those of calfskin, manufacturers and retallers of shoes thereof adopted and employed said term in designating, advertising, and selling said shoes, and the former so billed the same, and, occasionally, as kid, trade was diverted from manufacturers of kid and calfskin leathers sold under their true names, there was a capacity and tendency to dccei ve the consuming publlc in respect of the composition or shoes made from said "Kaffor Kid", and there was placed in the bands or others the means of committing a fraud upon the consuming ' public by enabllng dealers to ofler and sell shoes and other products made of the aforesaid leather as and for articles made of kid : Held, That such practices, under the circumstances set forth, constituted unfair methods of competition.

Mr. E. J.ll,ornibrook for the Commission. Harrington, Debord, Huwley &: Smith, of Youngstown, Ohio, for respondent.

SYNOPSIS OF COMPLAINT Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent, an Ohio corporatiop. engaged in the manufacture of leather and sale thereof to manufacturers of shoes and other leather products at points in various States, and with principal office and place of business in Girard, Ohio, with naming product misleadingly, advertising falsely or misleadingly and misbranding or mislabeling in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce. Complaint 12F.T.C.

Respondent, as charged, for about two years last past, has named a leather made by it :from the hides o:f calves" Kaffor Kid", featured said name in its advertisements of such leather, under said name, in trade journals of general circulation among the shoe and leather goods trades throughout the United States and in certain sections thereof, so branded said leather,· and sold the same, so named, branded, advertised, invoiced, and billed, to its aforesaid vendee manufacturers of shoes and other leather products, by whom said shoes and products are sold to wholesale and retail dealers in various States, named, designated, advertised, labeled, branded, and other· wise represented by many of said vendees manufacturers as " Kaffor Kid" products and made of" Kaffor Kid" and" kid", and resold by said vendee's wholesale dealer customers thus labeled and branded to reailers, and, by said retailers, still so labeled and branded, offered and sold to the consuming public; notwithstanding the fact that leather made from the skin of calves is not and never has been named, designated, and known as "Kid", but as calf and calfskin, and that kid has long since meant leather made from the skin of goats, preferred by many for shoes and other leather products to similar articles made of calf or calfskin, as above set forth. 1 The use, as charged, of said name and designation "Kaffor Kid", as above set forth, "has the capacity and tendency to mislead and deceive many members of the shoe and leather-goods trades and many of the consuming public into the belief that respondent's said 'Kaffor Kid' leather is said leather known as 'kid', hereinbefore delilcribed, and to cause many of the trade and consuming public to purchase respondent's said leather and shoes and other leather products manufactured therefrom, in said belief", and further, respondent's "said acts and practices place in the hands of others the means of committing a fraud upon the consuming publi<; by enabling dealers to offer for sale and sell to the consuming public shoes and other leather products made of respondent's said 'Kaffor Kid ' leather as and for articles made of said leather 'kid', hereinbefore des The allegations of the <'omplalnt relating to the meaning of the words 1 kid', etc., as above set forth, are as follows :

"PAn. 4. Leather manufactured from the skins of goats Is and for many years past hall been named and de,lgnlltl'd and commonly ond generally known to the trade an4 eonsumlng public as ' kid '. Leather manufactured from the skins of calves Is not now and never has been named, designated, and known as 1 kid' and now Is and for many years past bas been named, deslgnoted, and commonly and generolly known to tbe trade and consuming public as ' cal! ' and ' coif skin ', "PAR. 1!. There bas been for many years and now Is a large and widespread demand among the conRumlng public throughout the United States for sho~ and other lentber products made of said leather known as ' kid ', hereinbefore described, and many of the consuming public tbrougbout tbe United States prefer shoes and other leather productl which are made of snld 1 kid' to similar [produete) made of said leather known a1 • calf' or ' calfsk!Ja ', hereinbefore described." OHIO LEATHER CO. 325 323 Findings scribed"; all to the prejudice of the public and of respondent's competitors, many of whom sell leather made from goatskins, rightfully and lawfully represented by them as "kid", and others of whom sell leather made from the skins of animals other than goats, without in any wise representing such leather as" kid". Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTS, AND ORDER P.ursuant to the provisions of an act of Congress approved September 26, 1914, the Federal Trade Commission issued and served a complaint upon the respondent, Ohio Leather Co., charging it with the use of unfair methods of competition in commerce in violation of the provisions of section 5 of said act. Respondent having entered its appearance and filed answer to said complaint, hearings were had before a trial examiner, theretofore duly appointed, and testimony was heard and evidence received in support of the charges stated in the complaint and in opposition thereto. Thereafter this proceeding came on regularly for decision, and the Commission having duly considered the record, and being now fully advised in the premises, makes this its report, stating its findings as to the facts and conclusion drawn therefrom: FINDING! AS TO THE FACTS PARAGRAPH 1. Respondent is incorporated under the laws of the State of Ohio, with its place of business at Girard in said State. It has an issued capital stock of 48,657 shares, representing a value of $1,599,400. Since 1901 respondent has been engaged in the manufacture or tanning of leather and in the sale thereof principally to manufacturers of shoes located in various States of the United States. When sales of its leather are made, the respondent causes it to be transported from its tannery in the city of Girard, Ohio, to, into and. through other States of the United States to the purchasers thereof at their respective places of business. In the course and conduct of its said business respondent is in competition in commerce with individuals, partnerships, and corporations engaged in the manufacture, sale, and transportation of leather made from calfskin and kidskin.

PAR. 2. In 1922 respondent began the tannage of a calfskin, which it name.} and sold under the trade name "Kaffor Kid." The name or legend ·' Kaffor Kid " was originated by the respondent and copyrighted by it in the year 1922. This " Kaffor Kid " leather is sold almost exclusively to manufacturers of shoes, and since the year 1922 Findings 12 F. T. C; respondent has manufactured and sold to shoe manufacturers $2,893,003 worth of such leather-this represents but 22 per cent of respondent's tanning business.

" Kaffor Kid " leather is manufactured by respondent under what is known among tanners of leather as the chrome process of tanning and also a secret tanning process of its own. By the use of said process respondent produces a leather that when made into shoes strongly resembles kid leather.

" Kail'or Kid " leather is produced from light calfskin or deacons, that is t(') say, from the skins of calves which are killed when about a week old and never more than 10 days old. Only milk-fed calves are used, never calves that are old enough to subsist on grass. The caHskins used by respondent in making " Kaffor Kid " come from dairy countries and are imported into the United States from the countries of Lithuania, Russia, Scandinavian countries, and some other European countries. "Kaffor IGd " leather is never made from kidskins or goatskins.

·PAR. 3. Kid leather is of a finer texture than calf. It is lighter, the grain is smaller, and the leather made therefrom by tanning processes is softer and more pliable than calf leather generally, but under the process of tannage used by respondent upon the calfskins taken from the calf of 10 days or younger " Kaffor Kid " leather becomes soft and pliable and very closely resembles kid leather. Respondent's "Kaffor Kid" leather, made in dark and morrow brown colors, is used in the manufacture of men's and women's shoes. PAn. 4:. Respondent ships its said leather to its customers in bundles of two dozen skins to a bundle and each bundle is stamped with the words "Ohio Kaffor Kid made exclusively by the Ohio Leather Co., Girard, Ohio, U. S. A.". There is no explanation on these bundles that " Kaffor Kid " is not made of kidskin. This leather is billed and invoiced to respondent's customers as "Kaffor Kid" without explanation on such bills and invoices that the same is made from calfskin.

The customers of respondent, that is to say, shoe manufacturers, bill the shoes made from " Kafi'or Kid " leather to their retail customers as " Kaffor Kid " without explanation that the same is made from calfskin. There have been occasions where these shoes were billed to such retailers as kid. Shoe retailers in ordering shoes made from r~spondent's said leather from the manufacturers of shoes frequently specify " Kaffor Kid " shoes. Shoes made of "Kaffor Kid " are sold to retailers of shoes in many of the cities of consequence in the United States under the name of "Kaffor Kid " without explanation in writing that the same are made from calfskin. OHIO LEATHER CO. 327 323 Findings At times the retailers stamp the words "Kaffor Kid" upon the cartons in which such shoes are contained and sold to their customers without explanation on such cartons that the said shoes are made from calfskin, and upon request of the retailers, manufacturers stamp the name " Kaffor Kid " on such cartons without explanation that the shoes contained therein are made of calfskin. PAR. 5. Respondent advertises its leather as " Kaffor Kid" and has spent the sum of $90,535 in such advertising. It advertises in the Shoe & Leather Reporter of Boston, The Hide & Leather Magazine of Chicago, The Boot & Shoes Recorder of Boston, The Shoe Style Digest of Boston, and Shoe Retailer of Boston. These magazines are generally circulated in the leather trade of the United States and reach shoe manufacturers and retailers. Respondent uses display signs and furnishes retailers with the same upon which are featured in large letters the legend " Kaffor Kid " and in smaller letters the words "The distinctive calf leather" are printed. Four thousand of these cards were printed and distributed. Respondent also addresses circular letters to retailers in which the legend "Kaffor Kid " is used. In all of respondent's advertising of "Kaffor Kid " leather the word " calf " or the word " calfskin " appear in letters much smaller than the words "Kaffor Kid." Manufacturers making shoes from" Kaffor Kid" leather advertise the same without reference to the fact that the same are made from calfskin. Some of such manufacturers sent circular 'letters to the consuming customers of retailers in which circulars " Kaffor Kid " shoes are mentioned without explanation that the same are made of calfskin.

Retailers advertise shoes made from respondent's said leather as " Kaffor Kid " without explanation that the same are made from calfskin.

PAR. 6. The value of calfskin and kidskin shoes now sold in the United States is about equal.

PAR. 7. The word " kid " as used in the shoe and leather trade and as commonly understood by the public has come to mean a· leather made from the skin of a goat, old or young. It came to be applied to leather made from the skin of a goat or goat kid more than 30 years ago and prior to that time those who manufactured leather made from goatskins or kidskins called themselves morocco manufacturers and such leather was known as morocco leather. Eighty per cent of the true kidskin goes into the glove trade, 90 per cent of all kid shoes are made from the skin of old goats. PAR. 8. The term " Kaffor Kid " or the coined word " Kaffor " were never applied to leather or shoes until adopted and used by the 328 •. FEDERAL TRADE COMMISSION DECISIONS Findings 12 F. T. 0. respondent in the said year 1922, and the term " Kafior Kid " has been continuously used by respondent since said year in the designating, advertising, and selling of "Kaffor Kid" leather. Manufacturers of shoes from said leather have, since the adoption of said term by respondent, used the term " Kaffor Kid " in designating, advertising, and selling such shoes. Retail dealers of shoes made from "Kaffor Kid" leather have, since the adoption of the said term by respondent, frequently used the term " Kaffor Kid " in designating, advertising, and selling such shoes. The said coined word "Kaffor" as applied to leather has no meaning. There is no such word in the dictionary or in the English language. There is a word spelled " Kaffir " meaning black. The wrm "Kaffor Kid", when applied to respondent's said leather, means kid leather to many of the consuming public. PAR. 9. Respondent's said use of the term "Kaffor Kid", as applied to its said leather, suggested said use of said term to said manufacturers, and in turn the said use of said term by said manufacturers suggested said use of said term to said retailers. PAR. 10. There is a preference for kid shoes, and people with tender feet and people who prefer stylish shoes generally prefer a shoe made of kid or goatskin as over and against a shoe made from calfskin. The said use of the term " Kaffor IGd" by retailers in the advertising and sale of said shoes enables them to dispose of shoes made of " Kaffor Kid" leather as and for shoes made of kid leather. The use by respondent of the term " Kaffor Kid" on its said leather and its subsequent use by manufacturers and retailers of shoes diverts trade from those who are engaged in the manufacture of kid leather and those who are engaged in the manufacture of calfskin leather and selling the same under their true names. PAR.11. "Kaffor Kid" has a "soft kiddy appearance" and shoes made from " Kaffor Kid " and kid leather are sold by retailers at about the same price. Many of the purchasing public can not tell the difference between calf leather and kid leather when said leather is made into shoes. Many of the purchasing public can not tell the difference between " Kaffor Kid " leather and kid leather. Purchasers of shoes made from "Kaffor Kid " leather have been led to believe by the use of the term " Ka:ffor Kid " in the advertising and sale of such shoes that they were purchasing shoes made from kid leather.

PAR. 12. The coined word " Kaffor " associated with the word " Kid " as used by the respondent and subsequently used by the respondent's customers or the customers of respondent's customers OHIO LEATHER 00. 329 323 Order does not enable the ultimate consumer to determine that the leather so named is a calfskin leather.

PAR. 13. The aforesaid use by respondent of the term " Kaffor Kid" and its subsequent use by the customers of the respondent and the customers of respondent's c~stomers has the capacity and the tendency to deceive the consuming public into the belief that the shoes made from respondent's said " Kaffor Kid " leather are in fact kid leather.

PAR. 14. Respondent's said acts and practices place in the hands of others the means of committing a fraud upon the consuming public by enabling dealers to offer for sale and sell to the consuming public shoes and other leather products made of respondent's said " Kaffor Kid " leather as and for articles made of kid leather. CONCLUSION The practices of said respondent under the conditions and circumstances described in the foregoing findings are to the prejudice of the public and respondent's competitors and are unfair methods of competition in commerce and constitute a violation of an act of Congi·ess approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers ana duties and for other purposes ".

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent thereto, the testimony, evidence, briefs, and arguments of counsel; and the Commission, having made its findings as to the facts and its conclusion that respondent has been, and is, using unfair methods of competition in commerce in violation of the provisions of section 5 of an act of Congress approved Sept€mber 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers nnd duties and for other purposes", It is now m·dered, That respondent Ohio Leather Co., its officers, agents, representatives, and employees, in connection with the advertising, offering for sale, and sale in commerce among the severn.! States of the United States, of leather made from calfskins, or other leather not made from kid or goatskins, shall cease and desist: 1. From using the word "kid " alone or in combination with the word "Kaffor ", or other word or words, as a trade or brand name for or as descriptive of any such leather. ..

Order 12F.T.O.

2. From using the word "kid" alone or in combination with the word "Kaffor ", or other word or words, on labels, letterheads, envelopes, or in the advertising or other designation, or description of any such leather.

It is further ordered, That the"respondent, Ohio Leather Co., shall within 60 days after the service upon it of a copy of this order file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist hereinbefore set forth.

FARLEY HARVEY CO. 331 Complaint