W. W. Nuss, doing business as the Nuss Research Laboratory

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IN THE MATTER OF W. W. NUSS, DOING BUSINESS AS THE NUSS RESEARCH LABORATORY COMPLAINT (SYNOPSIS), FINDINGS, AND Onder IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPUOVED SEPT. 26, 1914 Doclcet 21.~8. Com,plaint, Jan. 15, 1934-Decision, Apr. 11, 1934 Where an individual engaged in the sale of certain medicinal preparations designated and described by him as "Master Hormones", (a) .Advertised said preparations as constituUng an effective preventive of and competent and adequate remedy for all ailments of the body, including chronic diseases such as tuberculosis, carcinoma, undulent fever, etc., and represented that said "Master Hormones" constituted "the most ;rapid and positive method in the treatment of diminished resl:stance and the resulting diseases thereof", the facts being they did not constitute such a preventive or competent and adequate treatment for all diseases, nor for tuberculosis and other diseases named by him; and (b) Used a trade name, which included the words "Research Laboratory" on his letterheads, labels, and other literature and as a signature to letters, circulars, etc., sent out to prospective customers, notwithstanding fact that he neither owned nor operated a laboratory at any time, as usually understood by the term ;

With capacity and tendency to confuse, mislead and deceive m<>mbers of the public in the aforesaid respects, and to induce them to buy and use his said preparations because of the erroneous beliefs thereby engendered, and to divert trade to him from competitors engaged in the sale of medicines and preparations adapted to and used for the prevention and treatment of the various diseases and ailments for which his said "1\Iaster Hormones" were offered, without in any wise misrepresenting the therapeutic effects of their products, and with result of so diverting business, to the substantial injury of competitors and the public : Held, That such practices, under the circumstances set forth, were all to the injury and prejudice of the public and competito.rs, and constituted unfair methods {)f competition.

Mr. Harr1J D. Jfichael for the Commission. SYNOPsis oF Complaint Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent individual, engaged in the sale and distribution of certain medicinal preparations which he designated and described as "Master Hormones", with advertising falsely or misleadingly as to qualities or properties of product, and with using Findings 18 F.T.C. misleadingly trade name, in violation of the provisions of Section 5 of such Act, prohibiting the use of unfair methods of competition in interstate commerce; in that respondent represents his said preparations as constituting an effective preventive or competent and adequate remedy for all diseases of the body, including such chronic diseases as tuberculosis, carcinoma, etc., and makes use of a trade name including the words " research laboratory " on letterheads, labels, and other literature and as a signature on letters, etc., sent to prospective customers, notwithstanding the fact that said preparations do not constitute such preventive or treatment for all ailments or for the chronic diseases named, and he neither owns nor operates a laboratory of any kind as the term is usually understood, and his said statements and representations, and their implications are greatly exaggerated and grossly inaccurate; with tendency and capacity to confuse, mislead, and deceive members of the public in the aforesaid respects, and to induce them to buy and use said preparations because of the erroneous beliefs engendered thereby, and to divert trade to himself from competitors engaged in the sale of medicines and preparations adapt~d for the prevention and treatment of the various diseases and ailments for which his own are offered; all to the injury and prejudice of the public and competitors.1 Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTS, AND Onder Pursuant to the provisions of an Act of Congress approved September 2G, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", the Federal Trade Commission, on the 15th day of January, 1934, issued its complaint against the respondent herein, ,V, W. Nuss, doing business under the name and style of The Nuss Research Laboratory, charging said respondent with the use of unfair methods of competition in int~rstate commerce in violation of the provisions of Section 5 of said Act. Said complaint was duly served upon said respondent on the 18th day of January, 1!>34. Attached to said complaint and served upon respondent as aforesaid was a notice fixing the 23d day of February, 1934, and the office of the Federal Trade Commission in ·washington, D. C., as the time and place of hearing upon the charges set forth in said complaint. Said notice further notified said respondent that an answer to said complaint would be required to be filed with the Commission on or before said date for hearing and that upon failure to appear or answer the s Allegations of the complaint are set forth substantially verbatim In the flndlngll, respondent havlng defaulted under the rules of the Commission. THE NUSS RESEARCH LABORATORY 381 379 Findings following provision of the Rules of Practice adopted by the Commission would be applicable, to wit:

Failure of the respondent to appear or to fl.le ,answer within the time as above provided for shall be deemeu to be an admission of all allegations of the complaint and to authorize the Commission to flnd them to be true anll to waive hearings on the charges set forth in the complaint. Said respondent having failed either to appear or to file answer to the complaint herein, he is hereby found and adjudged to be in default by reason of such failure to appear or to file answer. Thereupon this proceeding came on for hearing by the Commission on said default, and the Commission, having duly considered the matter and being fully; advised in the premises, finds, pursuant to said Rules of Practice, that the allegations of aside complaint are true and that respondent has waived hearings on the charges set forth therein. The Commission further finds that this proceeding is to the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom: FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, ,V. ,V, Nuss, is the sole owner and manager of the business conducted by him under the name and style of The Nuss Research Laboratory. Respondent has owned and conducted said business since the year 1932 and has his office and principal place of business in the city of Elkland in the State of Pennsy 1vania.

P.An. 2. Said business so owned and conducted by respondent consists in the sale and distribution in interstate commerce of certain medicinal preparations designated and described as " Master Hormones". Respondent in the course and conduct of his said business causes his said preparations to be transported in interstate commerce from his said place of business in Pennsylvania to, into, and through States of the United States other than Pennsylvania to various members of the public to whom they are or have been sold. Respondent usually sells his said preparations direct to physicians for ultimate distribution and sale to members of the consuming public.

PAR. 3. During the time above mentioned other individuals, firms and corporations in various States of the United States are and have been engaged in the sale and distribution in interstate commerce of preparations similar in kind or as to purposes of use as those of respondent and also of those designed, intended and used for the treatment of the various diseases and bodily ailments for which respondent's said preparations are represented and advertised as Findings 18F.T.C.

treatments as hereinafter shown, and such other individuals, firms, and corporations have caused and do now cause their said preparations, when sold by them, to be transported from various States of the United States to, into, and through States other than the State of origin of the shipment thereof. Respondent has been, during the aforesaid time, in competition in interstate commerce in the sale of his said preparations with such other individuals, firms, and corporations. Said competing preparations are sold in some instances to physicians for ultimate distribution and sale to members of the consuming public and in other instances to wholesale and retail druggists for ultimate resale to members of the public. PAR. 4. Respondent, in advertising his said " Master Hormones " makes use of circular letters which he distributes by mail to doctors in various States of the United States in which it is represented that said "Master Hormones " constitute an effective preventative of and a competent and adequate remedy for all diseases of the human body including chronic diseases such as tuberculosis, carcinoma, undulant fever, etc. An example of the statements made by respondent in his circular letters is the following: Master Hormones are the most rapid and positive method in the treatment of diminished resistance and the resulting diseases thereof. Respondent also by the use of said trade name, "The Nuss Research Laboratory", on his letterheads, labels, and other literature and by the use of said trade name as a signature to letters, circulars, etc., sent out to prospective customers, represents and implies that he owns and operates a research laboratory. PAR. 5. In truth and in fact respondent's said preparations do not constitute a preventative of or a competent and adequate treatment for all diseases of the human body and do not constitute such a preventative of or treatment for tuberculosis, carcinoma, undulant fever and other diseases named by respondent in his said circular letter. Respondent does not own or operate a laboratory of any kind as such term is usually understood. All of such statements, representations and implications are either untrue or greatly exaggerated and grossly inaccurate.

PAR. 6. The representations of respondent, as aforesaid, have had and do have the tendency and capacity to confuse, mislead, and deceive members of the public into the belief that respondent's said preparations constitute a preventative of and a component and ade quate treatment for all diseases of the human body and more particularly for the treatment of chronic diseases such as tuberculosis, carcinoma, undulant fever, etc., when in fact such are not the facts or only to a limited extent. The use of said trade name by re- THE NUSS RESEARCH LABORATORY 383 379 Order Epondent has had and does have the tendency and capacity to confuse, mislead, and deceive members of the public into the belief that respondent owns and operates a research laboratory when such is not the fact. Said representations of respondent have had and do have the tendency and capacity to induce members o£ the public to buy and use said preparations because of the erroneous beliefs mgendered as above set forth, and to divert trade to respondent from competitors engaged in the sale in interstate commerce of medicines and preparations adapted to and used for the prevention and treatment o£ the various diseases and ailments of the human bouy for which respondent represents his said preparation to be a preventative or treatment.

PAR. 7. There are among the competitors of respondent in the sale of his said products those who in no wise misrepresent the therapeutic effects of their competing products, and respondent's acts and practices as hereinbefore set forth tend to and do divert business to respondent from his competitors, to the substantial injury and prejudice of such competitors.

CONCLUSION The practices of said respondent, under the conditions and circumstances described in the foregoing findings, are all to the injury and prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce and are in violation 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." ORDER TO CEASE AND DESIST This proceeding having been duly heard by the Federal Trade Commission upon the record, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of an Act of Congress approved September- 26, 1914, entitled "An Act to create a Federal Trade Commission 1 to define its powers and duties, and for other purposes", It is ordered, That respondent, W. w·. Nuss, doing business underthe name and style of The Nuss Research Laboratory, or doing business under his own or under any trade name, his agents, representatives, servants and employees, in connection with the sale, offering for sale, or distribution in interstate commerce and the District of Columbia of any or all of his so-called "Master Hor-mones", or of preparations of the same or substantially the same composition, ~84 FEDERAL. TRADE COMMISSION DECISIONS Order lsf.T.C.

respectively, under any other name or names, cease and desist from representing by express statements or by implication that any or all such preparations constitute an effective preventative of or a competent and adequate remedy for, or treatment of all diseases of the human body, including chronic diseases such as tuberculosis, carcinoma, undulant fever, etc., and from representing by express statement or by implication by use of the word " laboratory " in the trade name or otherwise, that he owns or operates a research or other laboratory unless such be the fact.

It ia furrther ordered, That respondent within 60 days from and after the date of the service upon him of this order shall file with the Commission a report in writing setting forth in detail the manner and form in which he is complying with the order to cease and desist hereinabove set forth.

WALTER A, VELLGUTH CO. 385 Syllabus