Pedodyne Co., Inc

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IN THE :MATIER OF PEDODYNE COMPANY, INC., ET AL.

COUPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONURESS APPROVED SEPT. 26, 1914 Docl1-et 3048. Complaint, Feb. 4, 1931-Decision, Apr. 21, 1931 Where a corporation and three individuals, officers and owners thereof and directors and in control of its sales policies and business operations, pngaged in the sale and distribution, under name "Pedodyne," of a product sold and recommended as a bunion treatment; in widely advertising their said product in newspapers and periodicals of general circulation throughout the States, and in advertising folders, literature, circular letters and other advertising matter printed and circulated throughout the several States to customers and prospective customers- (a) Represented that said product would penetrate beneath the outer skin and give permanent results, and would banish, cure, or heal bunions and give perfect foot comfort and end torture or misery thereof and soothe and heal the instant used, through such statements, omong others, as "BUNION TORTURE needless. Pain stops almost instantly. • • • ." "* • • penetrates to the tender, inflamed, diseased tissue," etc., ''You want PERMANENT'l' .results. You want ENTIRE FREEDOM and complete foot comfort. You want to BANISH the misery for good," etc.; (b) Represented that said "Pedodyne" was a scientific product ond a recent discovery, or improvement of a scientific disco.Very, through such statements as "For many years the true nature ot bunions was not understood. Now Science has conquered," and "PEDODYNE is Scientific"; and (c) Represented that competing products were ot no value in treatment ot bunions, through such statements as "Perhaps you have tried other methods-pads, plasters, appliances of one type or another-without satisfactory results. It is not surprising it you have failed to get the relief You sought," "How can you expect some little pad or appllance that does not penetrate beneath the outer skin to heal your bunion? I say that I do not believe that it can be done that way"; Facts being that, while product in question would, in numerous cases, temporarily relieve pain and torture caused from bunions and do so with reasonable promptness and, absent any bone deformity, aid in reducing the swelling and Inflammation, it would not banish, cure or heal such. ailments or conditions, but efficacy thereof was limited to temporary relief ot pains and discomforts caused thereby, formula in question had been used tor many years In treating such ailments and conditions and could not correctly be termed a recent discovery nor an improvement of a scientific discovery, product would not penetrate to the affected parts of the foot In cases of such conditions, and there were ott·er products on the market sold and recommended for treatment of bunions, of which some Were helpful In relieving pains caused thereby, and some in correction thereot; and (d) Represented to purchasing public, through circulars, letters, and literature Issued and mailed to prospective purchasers, that they were making a "special offer" to particular person thus contacted, and that price quoted Complaint 24F. T. C.

in the literature was a special one, facts being such "special offers" pointed out in their follow-up letters and literature were not thus limited, but were made indiscriminately to any prospective purchaser, and price quoted was the regular selling price of the product; With capacity and tendency to mislead and deceive a subj:tantlal portion of the purchnsing public into the erroneous belief that all said representations were true, and Into buying a substantial volume of their said pt•oduct on account of such bellefs, thus induced, and with result that trade was diverted to them from those likewise engaged in sale and distribution of products prepared, designed, intended and sold for substantially same purpose nnd use for which their said product was advertised and sold, and who truthfully advertised the same and the efficacy thereof; to the Injury of competitors and commerce:

Held, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before Mr. lV. lV. Sheppard, trial examiner. Mr. Floyd 0. Collins for the Commission.

Complaint Pursuant to the pr~visions 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, having reason to believe that the Pedodyne Company, Inc., a corporation, George J. Katz, individually and as president of Pedodyne Company, Inc., Rose M. Katz, individually and as vice president and treasurer of Pedodyne Company, Inc., and Robert L. Keats also known as Robert L. Katz, individually and as secretary of Pedodyne Company, Inc., hereinafter referred to as respondents, have been and are using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appeariug to the Commission that a proceeding by it in respect thereof would be 5n the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Pedodyne Company, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its principal place of business located in the city of Chicago, State of Illinois. Respondent, George J. Katz, is president and general manager of Pedodyne Company, Inc. Respondent, Rose M. Katz, is vice president and treasurer of Pedodyne Company, Inc. Respondent, Robert L. Keats, also known as Robert L. Katz, is the secretary of Pedodyne Company, Inc. Th0 individual respondents own all the stock of Pedodyne Company, Inc., and direct and control its sales policies and business operations. 'fhC respondents are now, and have been for several years past, engaged in the sale and distribution of a preparation for the treatment of PEDODYNE CO., INC., ET AL. 1065 1003 Complaint bunions known as "Pedodyne." The respondents cause said product, when sold, to be shipped and transported in interstate commerce from their plaae of business located in the State of Illinois to purchasers thereof located at various points in States of the United States other than the State of Illinois. They now maintain, and have at all times mentioned herein maintained, a constant current of trade in said product in commerce among and between the various States of the United States and in the District of Columbia. PAn. 2. Respondents, in the course and conduct of their business, are now, and at all times herein referred to have been, in substantial competition with other corporations, individuals, firms, and partnerships likewise engaged in the sale and distribution of other prepara'tions and appliances, prepared, designed, manufactured, advertised, and sold as treatments for bunions, in commerce among and between the various States of the United States.

PAn. 3. Respondents, in the course and conduct of their business as aforesaid, and for the purpose of inducing individuals to purchase said bunion treatment, "Pedodyne," ha\'e caused advertisements to be inserted in newspapers, magazines, and other periodicals of gene:al circulation throughout the -pnited States, and have printed and Circulated throughout the several States of the United States, through the United States mail and otherwise, to customers and prospective customers, certain advertising folders and literature, circular letters and other advertising matter, in all of which the respondents have ~ansed the firm name and the name of the product to be prominently and conspicuously displayed and in which the following statements are made:

.A. TIUNION TOTITUTII~ needless. Pain stops almost instantly. The swell- Ing and inflammation !s so quickly reduced yon can wear smaller, neater shoes With ease.

Now then, if you actually want to get rid of this misery, if you want to enjoy perfect foot ease, this is your opportunity. The 1\Io:st Torturing nunions Surrender to Pedodyne. b If YOU can positively get rid of your bunion irritation and humiliation, do BO Y a]] means. Thonsnnds say that PEDODYNE will do this for you, thereby1 ncr£>asing your happln£>ss and your efficiency! PEDODYNE is a rent friend to e,·ery person who has bunions-just starting or of longer standing.

You want PERMANENT results. You want ENTIRE FTIEEDOJ\1 and ('0111· Vlete foot comfort. You want to TIANISII the misery for good. b F'or Innny years the true nature of bunions was not understood. Now SeieJI(:e as conquered.

PEDODYNE is Scientific.

tt"tl A8IJnru,soon <lendns l'EDODYNEouter E'pidermlscomesnndin penetrntescoutnct withto thethe tender,bunion inflamed,it quicklydist'Hs<#softeH~ ~sue and bursal sac, • • Complaint 24F.T.C.

B. Permitted to go untreated, or relieved through clumsy appliances or by ~;Jitting your shoes to "relieve the pressure", your bunion may cause serious foot disorders.

Perhaps you have tried other methods-pads, plasters, appliances bf one type or another-without satisfactory results. It is not surprising if you have failed to get the relief you sought.

llow can you expect some little pad or appliance that does not penetrate beneath the outer skin to heal your bunion? I say that I do not believe that it cun be done that way.

C. Respondents further state, by way of purporting to quote alleged testimonials, that:

My bunions are showing such rapid improvement that it seems almost a miracle.

I am very happy to inform you your Pedodyne treatment has acted like magic. All of said statements, together with many other similar statements appearing in respondents' advertising and literature, purport to be descriptive of respondents' product "Pedodyne." In all of respondents' advertising matter and literature the respondents represent, through the statements herein set out and through other statements of like import and effect, that:

1. Pedodyne will end bunion torture;

2. Pedodyne \Vill stop pain caused from bunions almost instantly; 3. Pedodyne will quickly reduce swelling and inflammation caused by bunions;

4. Pedodyne will rid the user of misery caused by bunions; 5. Pedodyne will give perfect foot comfort; 6. Pedodyne will soothe and heal the first instant it is used; 7. Pedodyne will give permanent results;

8. Pedodyne \vill banish, cure and heal bunions; 9. Pedodyne is superior to other bunion treatments; 10. Pedodyne is a scientific product, and that it is a recent discovery or an improvement of a scientific discovery; 11. Pedodyne is penetrative;

12. Other competing products are of no value in the treatment of bunions.

PAR. 4. The claims and representations made by the respondents with respect to the therapeutic value of the product, Pedodyne, are grossly exaggerated, false, and misleading. In truth and in fact respondents' product, Pedodyne, will not end bunion torture. It will uot stop pain caused from bunions almost instantly. It will not quickly reduce swelling and inflammation. It will not rid the user of the pain and misery caused from bunions. It will not give perfect foot comfort. It will not soothe and heal the first instant it is used. It will not give permanent results. It will not banish, cure, or heal PEDODYNE CO., INC., ET AL. 1067 1063 Complaint bunions. I~ will not, without danger, enable the user to wear smaller shoes. It will not penetrate, neither is it a new or improved scientific treatment. In addition, said claims and representations serve to falsely disparage bunion treatments prepared and marketed by respondents' competitors in that said statements falsely represent that the products sold by respondents' competitors are of no value as bunion treatments. In truth and in fact the products sold by respondents' competitors are of some value as bunion treatments in that they \vill relieve pain and assist in correcting the trouble caused by certain types of bunions.

PAR. 5. The respondents further represent to prospective purchasers, through a series of letters and literature, that the respondents ~remaking special reduced prices to the prospect and that the offer ls for a limited time only. The truth is that the respondents mako the representations and concessions indiscriminately to prospective Purchasers and the time of acceptance is without limitation. PAR. 6. There are among respondents' competitors many who manufacture, distribute and sell to the purchasing public, appliances and treatments for bunions, who in no way misrepresent the quality, effi- ~acy, or therapeutic value of their product and who do not falsely dis- Parage the prodticts manufactured and sold by their competitors; and who do not falsely represent that their products are being sold at .special prices for limited periods of time when such is not the case. PAR. 7. Each and all of the false and misleading statements and ~·epresentations made by the respondents in designating and describ- 111g the product, "Pedodyne," and its effectiveness, as hereinabove set out, in offering for sale and selling said product. were, and are, calculated to, and had, and now have, the tendency and capacity to ~lislead and deceive a substantial portion of the purchasing public lllto the erroneous belief that all of said claims and representations at·e true, and into the further erroneous belief that the appliances .and preparations devised, manufactured, and sold by respondents' com- Petitors are inferior in quality and less effective than respondents' PJ·oduct. Further, as a direct consequence of said mistaken and errolleous beliefs, induced by the acts and representations as hereinabove :set out, a substantial number of the consuming public has purchased a substantial amount of respondents' product with the result that. t~·ade has been unfairly diverted to the respondents from competitors ~~kewise engaged in selling and distributing appliances and prepara- 10lls for the treatment of bunions and who do not misrepresent the Ptice, quality, and efficacy of their products. As a result of the unfair :lets and false and" misleadin(J' representations of the respondents, In"Jury has been, and is now beinge done by respondents to compehtwn• • Findings 24F.T.C.

in commerce among and between the various States o£ the United States and the District o£ Columbia.

PAR. 8. The above and foregoing acts, practices and representations of the respondents have been and are all to the prejudice and injury o£ the public and respondents' competitors, and have been and are unfair methods of competition in commerce within the meaning and intent of Section 5 o£ an Act o£ Congress approved September 26, HH4, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and £or other purposes." REPORT' FINDINGS AS '1'0 THE FACTS, AND ORDER Pursuant to the provisions o£ an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and £or other purposes," the Federal Trade Commission, on February 4, 1937, issued, and on February 5, 1937, served, its complaint in this proceeding upon respondents, Pedodyne Company, Inc., a corporation, and George J. Katz, Hose l\L Katz, and Robprt L. Keats, also known as Robert L. J{atz individually and as officers of the Pedodyne Company, Inc., charging respondents \with the use o£ unfair methods of competition in com· merce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents' answer, tlie Commission, by an oruer entered herein, granted respondents' motion for permission to withdraw said ans\ver and to substitute therefor an ans,ver admitting all the material allegations of the complaint to be true and waiving the taking of further evidence and all other interven=ng procedure, which substituted answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint and the substituted answer, briefs and oral arguments of counsel having been waived, and the Commission having duly considered the' same and being now fully advised in the premises, finds that this proceeding is in the interrst of the public and makes this its findings as to the facts and its conclusion drawn therefrom. FINDINGS AS TO Tile FACTS PARAGRAPH 1. Respondent Pedodyne Company, Inc. is a corpora· tion organizell, existing, and doing bus.iness under and by virtue of the laws of the State of Illinois, with its principal place of business located in the city of Chicago, State of Illinois. Respondent George J. Katz is president and general manager of Pedodyne, Inc. Respondent Rose l\1. Katz is vice president and treasurer of Pedodyne Company, Inc. Respondent Robert L. Keats, also known as Robert PEDODYNE CO., INC., ET AL. 1069 1063 Findings L. Katz, is secretary of Pedodyne Company, Inc. The individual respondents own all the capital stock of the respondent corporation and direct and control its sales policies and business operation. The respondents have been engaged for several years in the sale and distribution in commerce among and between the various States of the United States and the District of Columbia of a product designated "Pedodyne." The product designated "Pedodyne" is sold and recommended as a bunion treatment. Respondents caused said product, when sold, to be shipped from their place of business in Chicago, Ill., to the purchasers thereof located at various points in the States of the United States other than the State of Illinois. Respondents do now and have for several years last past maintained a constant current of trade in commerce among and between the various States of the United States and the District of Columbia in the product "Pedodyne."

There are likewise other corporations, firms, individuals, and partnerships engaged in selling and distributing in commerce among and between the various States of the United States and the District of Columbia of other preparations and appliances sold and recom- :rnended as bunion treatments. Ucspondents are now and have been in active substantial competition with these other corporations, firms, individuals, and partnerships in the sale of their respective products. PAn. 2. For the purpose of inducing the purchase of the product "Pedodyne" respondents have widely advertised said product in ad- Vertisements inserted in newspapers and magazines of general circulation throughout the United States. Respondents have also printed and circulated throughout the several States of the United States to customers and prospective customers advertising folders, literature, circular letters, and other advertising matter. · In all of the advertisements and advertising matter hereinabove :mentioned the respondents have caused the corporate name and name of the product "Pedodyne" to be prominently and conspicnonsly displayed, together with such statements as:

DUNION TORTURE needless. Pain stops almost instantly. The swelling and inflammation is so quickly reduced you cm1 wear smaller, neater shoes With ense.

Now tlwn, it yon actually want to get rid ot this misery, it you want to ~'njoy perfect foot ense, this Is your opportunity. The 1\Iost Torturing Dunions Surrender to Pedodyne. It you can positively get rid of your bunion Irritation aml humiliation, do 80 by all menus. Thousands say that PEDODYNE will do this for you, th!'reby iner~>n'slng your happiness and your efficiency! PEDODYNE Is a real friend to e\·ery person who hns bunions-just starting or of longer standing.

146756m-39--vol. 24-70 Findings 24F.T.C.

You want PERMANENT results. You want ENTIRE FREEDOiU aud complete foot comfort. You want to BANISH the misery for good. For many years the true nature of bunions was not understood. Now Science has conquered.

PEDODYNE fs Scientific.

As soon as PEDODYNE comes in contact with the bunion it qulejdy softens the hard, dead outer epidermis and penetrates to the tender, inflamed, diseased tissue and bursal sac, • • • Permitted to go untreated, or relieved through clumsy appliances or by ~lltting your shoes to "relieve the pressure", your bunion may cause serious toot disorders.

Perhaps you have tried other methods-pads, plasters, applianees of 011e type or another-without satisfactory results. It is not surprising if you have failed to get the relief you sought.

How can you expect some little pad or appliance that does not penetrate beneath the outer skin to heal your bunion? I say that I do not believe that It can be done that way.

1\ly bunious are showing such rapid improvement that it seems almost 11 miracle.

I am very happy to inform you your Pedodyne treatment has acted like magic.

The statements above set out, together, with many similar statements appearing in respondents' advertising literature purport to he descriptive of respondents' product. Through these statements and other statements of like import and effect the respondents represent that (1) Pedodyne will end bunion torture; (2) Pedodyne will stop pain caused from bunions almost instantly; (3) Pedodyne ,,.ill quickly reduce swelling and inflammation caused by bunions; ( 4) Pedodyne will rid the user of misery caused by bunions; (5) Pedodyne will gi-ve perfect foot comfort; ( 6) Pedodyne will soothe and heal the instant it is used; (7) Pedodyne will give permanent re· sults; (8) Pedodyne will banish, cure and heal bunions; (9) PetlodyJJe is superior to other bunion treatments; (10) l")edodyne is a scientific product, and that it is a recent discovery or an improvement of a scientific discovery; ( 11) Pedodyne penetrates beneath the outer skin; and (12) Other competing products are of no value in tl1o treatment of bunions.

AI!, 3. In truth nnd in fact it is generally understood and believcrl r by the public that any enlargement of or on the metatarsophalangeal joiut, whether bursitis or hallux valgus, is a bunion. The product designated "Pedodyne" will, in numerous cases, trmporarily relieve the pain and torture caused from bunions and will do so with n•a· sonable promptness, and where there is no bone deformity Pedodyne will aid in reducing the swelling and inflammation. The product Pedodyne will not banish, cure, or heal bunions, but its efficacy is limited to temporary relief of pains and discomforts caused by PEDODYNE CO., INC., ET AL. 1071 1063 Conclusion bunions. The Pedodyne formula has been used for many years in treating bunions and it cannot be correctly termed a recent dis- ()overy; neither is it an improvement of a scientific discovery. Pedodyne is not penetrative in a sense meaning it will penetrate to the affected parts of the foot in cases of bunions. There are other products on the market which are sold and recommended for use in treating bunions and some of said products are helpful in relieving pains caused by bunions and some are helpful in the correction of bunions. PAn. 4. Further the respondents represent to the purchasing public by issuing and mailing to prospective purchasers circular letters and literature that the respr;mdents are making a "special offer" to the particular person so contacted and that the price quoted in the literature is a special price.

In truth and in fact, the special offers pointed out in respondents' follow-up letters and literature are not limited to the one to whom the letter is addressed but such offers are made indiscriminately to any prospective purchaser and the price quoted is the regular selling price of said product.

PAn. 5. There are among respondents' competitors many who sell and distribute preparations and appliances as bunion treatments Who do not misrepresent the qu·ality or character of their respective Product or its efficacy in treating bunions. PAn. 6. The various statements and misrepresentations made by respondents in describing the product "Pedodyne" and the effectiveness of said product when used had, and now have, a capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that all of said representations are true and into the purchase of a substantial volume of respondents' product on account of such beliefs induced by the respondents' representations as above set out. As a result thereof, trade has been diverted to respondents from corporations, firms, individuals, and partner_rships likewise engaged in the business of selling and distributing their products prepared, designed, intended, and sold for substantially the same purpose and use for which the respondents' Product is advertised and sold, and who truthfully advertise their Products and the efficacy of their products when used. As a consequence thereof, injury has been and is now being done by respondents to competitors in commerce among and between the various States of the United States and the District of Columbia. CONCLUSION The aforesaid acts and pru.ctices of the respondents are to the Prejudice of the public and of respondents' competitors and constitute 1072 FEDERAL TRADE COl\IMISSION DECISIONS Order 24F.T.C.

unfair methods of competition in commerce within the intent and meaning of Section 5 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 heard by the Federal Trade Commission upon the complaint of the Commission and the answer filed herein on March 26, 1937, by respondents admitting all the material allegations of the complaint to be true and waiving the taking of further evidence and all other intervening procedure, and the Commission having made its findings as to the facts and its conclusion that said respondents have 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 ordered, That the respondent, Pedodyne Company, Inc., a corporation, its officers, representatives, agents, and employees, and George J. Katz, Rose M. Katz, and Robert L. Keats, also known as Robert L. Katz, in connection with the offering for sale, sale, and distribution of Pedodyne in interstate commerce or in the District of Columbia, do forthwith cease and desist from representing: 1. That Pedodyne will banish, cure or heal bunions or give perfect foot comfort;

2. That Pedodyne will end bunion torture or rid the user of the misery caused by bunions;

3. That Pedodyne acts with other than reasonable promptness; 4. That Pedodyne will give permanent results; 5. That Pedodyne is scientific in a sense meaning that Pedodyne is a recent discovery or a recent improvement of a scientific discovery;

6. That Pedodyne will penetrate beneath the outer skin; 7. That competing products are of no value in the treatment of bunions;

8. That a stated price is the regular price, where periodic reductions are offered in follow-up form letters; or that the price stated is a special offer to the particular person contacted, where the offer is made indiscriminately to any prospective purchaser. It i~ further ordered, That the respondent shall, within 60 days after service upon it 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 this order. · MAJESTIC LABORATORIES 1073 Complaint