Fluegelman & Co., Inc., N

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IN THE MATTER OF N. FLUEGELMAN'&'COMPANY, INC.

COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED Vlcd;\1'ION OF SEC, 15 OF AN A.CT 01<' ~ONGR.ESS API:ROYED SEP'r. 26, .19 Docket 1491. Complaint, Jan. 13, 1928-Decision, Apr. :g, 1929 l Where a' corporation engaged as a converter and wholesale distributor of cotton fabrics, named, advertised, offered and sold as " Satlnmald" a mercerized cotton fabric, dealt in by it as above set forth, and so labeled the board ends affixed to the cards or boards around which the fabric was wound, and the paste tickets, hanging tags, salesmen's color cards and other descriptive matter used in connection with the sale and distribution thereof, together with the words "A Satinlzed Fabric," and also the words, after a time, ".A Cotton Fabric," in its advertisements and on the aforesaid llescriptive matter used in connection with the sale thereof, but in a less , conspicuous fashion; \With the capacity and tendency to mislead and deceive buyers into believing said fabric to consist in whole or In part of sllk and to inuuce its purchase in such belief, and with the effect of furnishing retailers with the means enabling them to mislead and ueceive ultimate buyers Into purchasing the same in the aforesaid belief, and the tendency to injure and ulvert trade from competitors dealing 1n cotton fabrics, silk fabrics, or both, or fabrics of both cotton or silk: Held, That such practices, under the circumstances set f011h, constituted unfair metlwds of competition.

Mr. Ja1nes M. lll"'inson for the Commission. Mr. Hen1'1J Fluegelm,an of New York cl.ty and Mr. R~ger O'Donnell, of ·washington, D. C., ior respondent. · , : · SYNOPSIS OF Cm.rPLAINT · Reciting its action in the public interest, pursuant tO' the provisions of the Federal Trade Commission Act, the Commission, charged 1 respondent, a New York corporation engaged as a converter of cotton fabrics, and wholesale distributor thereof in interstate commerce, to purchasers in States .other.r.than ~ew Yor~, and with ,prin-, cipal place of business in New York City, with naming product misleadingly, adver.tising falsely or misleadingly and misuranding or mislabeling in violation of the provisions of section 5 of such act,. pr?hibiting the use of unfair methods of, competiti9n in. ~nterstate, commerce. 1 • , • ·• 1 Respondent, as charged, engaged as above set forth, designated as " Satinmaid " a mercerized cotton fabric, prepared and sold by it, containing no satin or silk, a product of the cocoon of the silkworm, Findings 12F.T 0.

but composed wholly of cotton, and so advertised the same in publica· tions of general circulation among various States, and labeled the cards or boards upon which said fabric was wound, and on its letterheads and in other advertising and labels designated and described said product as "Satinized."

Tile use by respondent of the words" Satinmaid" and/or" Satinized," as charged, in advertising, labeling, and selling its aforesaid product, as above set forth, has the capacity and tendency to and does mislead purchasers of said fabric into the belief that it is composed in whole or in part of satin or silk, the product of the cocoon of the silkworm, and to induce purchasers to purchase the same in that belief; all to the prejudice of the public and of respondent's competitors, among whom there are concerns and individuals who manufacture, sell, and transport in commerce fabrics composed wholly of cotton and so represented, or without any representation as to composition, and others making fabrics composed wholly or in part of satin or silk or both.

Upon the foregoing complaint, the Commission made the following REPOitT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an act of Congress approved September 26, 1914, entitled" An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", the Federal Trade Commission issued and served its complaint upon N. Fluegelman & Co., Inc., hereinafter called respondent, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. The respondent having entered its appearance and filed its answer to the complaint, formal hearings were had thereon before an examiner of the Commission, theretofore duly appointed, and testimony, documentary evidence, and exhibits were offered and received and duly recorded and filed in the office of the Commission. Thereafter the proceeding regularly came on for hearing before the Federal Trade Commission on such complaint and answer and on the testimony, evidence, and exhibits on file and on the briefs and arguments of counsel, and the Federal Trade Commission having duly considered the same, now makes this its report in writing Rnd states its findings as to the facts and conclusion as follows:

FINDINGS AS TO Tile FACTS PARAGRAPH 1. Respondent, N. Fluegelman & Co., Inc., has been for several years last past, and now is a corporation organized and existing under and by virtue of the laws of the State of New Y ork1 N. FLUEGELMAN & CO., INO. 361 359 Findings with its principal office and place of business in the city of New York and State aforesaid. It has been and is engaged in business as a converter of cotton fabrics, and as wholesale distributor of same in interstate commerce, causing said product when sold to be transported from its said place of business to purchasers in the various other States of the United States. In the course and conduct of said business respondent is now and at all times hereinafter mentioned was in competition with individuals, partnerships, and corporations engaged in· the sale and distribution of fabrics in commerce among and between the various States of the United Sta.tes.

PAR. 2. In the course and conduct of its business respondent has offered for sale, through advertisements in publications of general circulation, and through traveling salesmen, and has sold, in the various States of the United States, a certain mercerized cotton fabric under and by the trade name "Satinmaid ". Said product when sold and delivered by respondent has had so-called board ends affixed to the cards or boards around which the fabric was wound, containing said trade name, accompanied by the words "A Satinized Fabric", in one or more places, which also have appeared on paste tickets, hanging tags, salesmen's color cards, and other descriptive matter used in connection with the sale and distribution of said fabric. On or about December 7, 1925, respondent commenced and has since continued the practice of placing in its advertisements and on the aforesaid descriptive matter so used in connection with the sale and distribution of said fabric, the words "A Cotton Fabric", either above or below the words " Satinmaid ", but in letters considerably smaller, except in the so-called color cards used by traveling salesmen to exhibit the various colors in which respondent offers said fabric for sale. On these color cards the words "A Cotton Fabric " appear in letters as large as, but less conspicuous than, those in which the trade name " Satinmaid " is expressed. PAR. 3. The word "satin" when used to describe or designate a fabric means that such fabric is composed wholly of silk woven in a peculiar manner so as to impart a high luster to the surface of the fabric. The description or designation by respondent of its cotton fabric as " Satinmaid," a word composed of the word "satin " and of the word "maid", which has the same phonetic significance and effect as the word "made", has had and has the capacity and tend· ency ro mislead and deceive buyers into the belief that such cotton ~abric consists wholly or in part of silk and to induce its purchase In such belief. Its sale by respondent with labels, paste tickets, hanging tags, board ends, and color cards bearing the said trade FEDEltAL TRADE COMMISSION DECISIONS362 Order 12 F. T.C.

name "Satinmaid ", as described in paragraph 2 hereof, furnishes retail dealers with the means by which they have been and are enabled to mislead and deceive ultimate buyers into its purchase in the belief that said fabric consists either in whole or in part pf silk. PAR. 4. There are now and for several years last past have been other individuals, partnerships, and corporations engaged in selling, and describing or designating as such, cotton fabrics, silk fabrics, or both, or fabrics containing both cotton and silk, in competition with respondent among ot between the various States of the United States, and the foregoing practices of respondent have had and have the capacity and tendency to divert trade from them to respondent and otherwise to injure them.

CONCLUSION The practices of respondent under the conditions nnd circumstances described in the foregoing findings as.to the facts are unfair methods 'of competition in interstate commerce and constitute a violation of an net of Congress upprov;ed September 26, 1914, entitled 1'An act to create a Federal Trade Commission, to define its powers and duties, and for other pure?oses ".

ORDER TO CEASE AND DESIST This proceeding having peen heard by the Federal Trade Commission upon the complaint of the. Commission, the answer of the respondent, the testimony and evidence submitted, briefs and arguments of counsel, and the Commission having made its report stating its findings as to the facts with its conclusion that respondent, N. Fluegelll}an & Co., Inc., has violated the provisions of an act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", It is now ordered, That the respondent, N. Fluegelman & Co., Inc., ,its officers, agents, servants, and employees; cease and desist, directly or indirectly, from using the word "Satinmaid ", or any word or .words, or combination of words, embracing the word " satin " as a trade name for, or to describe or designate a cotton fabric offered for sale or sold in interstate commerce.

It is further ordered, That the respondent, within 60 days from and after the service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form of its compliance therewith.

RALADAM CO. 363 Complaint