Eucathol Company, Inc.

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IN Tile .MATTER OF EUCATHOL COMPANY, INC.1 COMPL.\INT, FINDINGS, .AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN .ACT OF CONGRESS .APPROVED SEPT. 26, 1914 Docket 3069. Complaint, Mar. 4, 1987-Deoision, June 29, 1937 \Vhere It corporation engaged in manufacture and sale of "Eucathol" compounrl or medicine tor use in treatment ot coughs, colds, scalds and other afflictions, and also for use as after-shaving cream, through rubbing or mas- Sllging same on skin or through inhalation ot vapors thereof, in substantial competition with those engaged in sale or offer to general public of com- . pounds, medicines, salves, and ointments used for purposes for which its said preparation was ofieredl•'nlsely represented, in advertising its said product in newspapers and period· lcals ot general circulation, and through radio broadcasts, and in pamphlets and printed testimonials, and other printed matter, as set forth, through use of plwtogrnphs, pictures, and legends, on cartons containing same, and fn circulars enclosed therewith, and in other advertising media, that use of such "Eucathol" would prevent and cure, or wns beneficial in treatment of ''insect bites, sunburn, piles and hemorrhoids, asthma an(} hay-fever, catarrh, colds, skin Irritations, scalds and burns, skin disorders, 1lu and pneumonia"; \V lth tendency and capacity to induce members of the public and prospective purchasers to form mistaken and erroneous beliefs that said statements and representations were true, and with result that such purchasing public, acting in such erroneous belief, was induced to buy and bought its said Product, and thereby unfairly diverted trade to 1t from its competitors; to the Injury of competition In commerce, and to that of the public: lield, That such acts and practices were to the prejudice ot the public and competitors and constituted unfair metholls of competition. Mr. E. J. llornibrook for the Commission.

Standard, Oat·ey & Standard, of Shawnee, Okla., for respondent. Co:&rPL.AINT Pursuant to the provisions of an Act of Congress, approved September 26, 1914 entitled "An Act to create a Federal Trade Coml'l1ission, to defi~e its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that The Eucathol Company, Inc., a corporation, has been and now is using Unfair methods of competition in commerce, as "comroer.ce" is de- ~ned in said act, and it appearing to said Commission that a proceed- ~ng by it in respect thereof would be in the public interest, hereby ISSues its complaint and states its charges in that respect as follows: 1 !lee Dlodltled llndlngs and ordt"r, aij ot Nov. 3, 1037, In this case. Infra, at page 1200.---- 314 FEDERAL TRADE COIIIl\IISSION DECISIONS Complaint 25 t'. T. C. PARAGRAPH 1. Respondent, The Eucathol Company, Inc., is a corporation, organized and existing under and by virtue of the laws of the State of Oldahoma, with its office and principal place of business located in the city of Shawnee, in said State. Respondent is now, and has been for several years last past, engaged at said location in the manufacture and sale of a compound for use in the treatment of coughs, colds, scalds, burns, sunburn, insect bites, hay fever, asthma, and other human affiictions. Said compound is also sold for use as au after shaving cream. Said compound is put up in containers and is to be applied by rubbing or massaging it onto the flesh, or by inhaling its vapors. Respondent has designated said compound as "Encathol." Respondent sells said product to wholesale drug~ists who sell said product to retail druggists, and also direct to retail druggists. The retail druggists sell said product directly to the consumers thereof.

In the course and conduct of said bu~iness respondent ships, or causes to be shipped or transported, said product when so sold from the city of Shawnee in the State of Oklahoma to said wholesale and retail druggists, many of whom are located in points in various States other than the State of Oklahoma. There is now, and has been during all of the times herein mentioned, a constant current of trade in said pr·oduct so sold by said respondent in commerce betwPe.n and nmong the various States of the United States and in the District of Columbia.

PAn. 2. In the course and conduct of said business, respondent is now, and hns been during aJl of the times herein mentioned, engaged in snhsl anHal competition with various corporations, firms, and indi- ,.,idnals S<'lling, or offering for sale, to the gpneral public compounds, medicin<'s, salves, and ointments and other remedies used for the purposes d<'scribed in paragraph 1 heroof.

PAR. 3. In the course and conduct of the business as aforesaid, re!=iponclent, in soliciting the sale of and selling said product, has arl\'Prtis<'cl the snmc in newspapers, mngazinPs, periodicals of general circulation, by m<'ans of radio broadcasts, and in pamphlets, printed tPstimoninl!=i, nncl other printed matter. It has also made use of photograph!=~, oth<'r pictures and lel!encls on cartons containing said r·compound and in circulars inclo!=ied in said cartons, and in other n(hPrtio;in~ mPclia. In and through Prtch nnd all of the advl'l'tising JllPrlia al)(WC P.nnmeratecl, respond<'nt has made, ann is making, ('"pressly or by implication, theo following represeontations: That tlle use of Encathol will prevent nnd cure, or is bE>neficial in the treatment of: insect hitf's, sunburn, piles and hemorrhoids, asthma and hay fpver, catarrh, colds, skin irritations, scalds and burns, skin disorders, flu and pneumonia, and other ailments. EUCATHOL CO., INC. 315 Findings P~-\R. 4-. The representations described and set forth in parao-raph 3 above arc false alld misleading, in that the use of Eucathol will not p~·erent and cure, and is not beneficial in the treatment of, insect bites, sunburn, piles and hemorrhoids, asthma and hay feyer catarrh colJ~, :skin irritations, skin uisorders, scalds and burns, flu a~d pneu~ ~n<:llw, or other ailments or afilictions of the human body for which lt 1s l'ecuJlll11enued by the respondent.

P.m. 5. Said statements and representations set forth in paragraph ~.so made by respondent have, and have had, the tendency and capac- Ity to induce members of the public and prospective purchasers to :fomt the mistaken and erroneous belief that said statements and 1 '~'!)l'e .... entatiolls are true, and, acting in such erroneous belief, the sal<l purchasillg public has been induced to purchase, and has pureha:o;ed, n•spondent's product, thereby unfairly diverting trade to l't'!ipolldcnt from its said competitors, to the injury of competition in <'OlltllWrce amono- and between the various States of the United States, an<l to th: injury of the public.

P~\R. G. The above alle~ed acts and practices are each and all to the }H'Pjudico of the public, and of respondent's competitors, and constitute unfair methods .of competition in interstate commerce Within tlte meaning of Section 5 of an Act of Congress entitled "An Act to rrrate a FPderal Trade Commission, to define its powers and duties, aml for other purposes," approved September 26, 1914. HE PORT, Fil\"DINGS AS TO THE F Acrs, AND Onder Pursuant to the provisions of an Act of Congress approved Septenlfwr ~G, 1914, entitled "An Act to create a Federal Trade Comlttissiou, to define its powers and duties, an<l for other purposes," the Ft.>deml Trade Commission on the 4th day of March 1937, is- Slled and seized its complaint in this proceeding upon respondent, Eucathol Company, Inc., a corporation, charging it with the use of tl~l~air ln('thods of competition in commerce in violation of the pro- VIsions of ~aid act. After the issuance of the complaint and the filing of respoulleut's answer, the Commission, by order entered herein, gt'ante<lrespondent's motion for permission to withdraw said answer a.11d substitute therefor an answer admitting all the material allegatJolls of the complaint to Lc true, and waiving the taking of further evidence awl all other intervening procedure, which substitute answer 'Vas <luly file<l in the oflice of the Commission. Thereafter, this proceeding J'('g-ularly came on for final hearing before the Commission ~n tho said complaint and the subi>titute answer, briefs a.n~ oral ar~u­ llents of counsel having been waived, and the Comnusswn having 316 FEDERAL TRADE COl\IMISSION DECISIONS Findings 25F.T.O.

duly considered the same, and being now fully advised in the premises finds that this proceeding is in the interest of the public and makes this its findings as to the facts and conclusion drawn therefrom.

FINDINGS AS TO Tile FACTS PARACR.\PII 1. Respondent, the Eucathol Company, Inc., is a corporation, organized and existing under and by virtue of the laws of the State of Oklahoma, with its office and principal place of business located in the city of Shawnee, in said State. Respondent is now, and has been for several years last past, engaged at said location in the manufacture and sale of a compound, or medicine, for usc in the treatment of coughs, colds, scalds, burns, sunburn, insect bites, hay fever, asthma, influenza and other human afllictions. Said compound is also sold for use as an after-shaving cream. Said compound is put up in containers and is to be applied by rubbing or massaging it on the flesh, or by inhaling its vapors. Respondent has designated the said compound as ·"Eucathol." Respondent sells said product to wholesale druggists who sell said product to retail druggists, and also direct to retail druggists. The retail druggists sell said product directly to the consumers thereof. In the course and conduct of said business respondent ships, or causes to be shipped or transported, said product when so sold, front the city of Shawnee in the said State of Oklahoma to said wholesale and retail druggists, many of whom are located at points in various States other than the State of Oklahoma. There is now, and has Leen, during all the times herein mentioned, a constant current of trade in said product so sold by said respondent in commerce between and among the various States of the United States and in the Dis· trict of Columbia.

PAn. 2. In the course and conduct of said business, respondent is now and has been, during all of the times herein mentioned, engaged in substantial competition with various corporations, copartnerships, firms, and individuals, selling, or offering for sale, to the general public, compounds, medicines, salves, and ointments and other medi· cines used for the purposes descriLeu in paragraph 1 hereof. PAn. 3. In the course and conduct of the business as aforesaid, responuent, in soliciting the sale and selling said product, has adver· tiscd the same in newspapers, magazines, periodicals of general circulation by means of radio broadcasts, and in pamphlets, printed testimonials and other printed matter, and in, by and through the use of photogrn phs, other pictures and 1<>gends on cartons containing the said compound, and in circulars enclosed in said cartons, and in EUCATHOL CO., INC. 317 313 Order ~.tl.ler advertising media. In and through each and all of the adverlsing media above enumerated, respondent has made and is making' expressly or by implication, the following representations: Th;; the use of Eucathol will prevent and cure, or is beneficial in the treatment of insect bites, sunburn, piles, hemorrhoids, asthma, and hay ~ever, catarrh, colds, skin irritations, scalds and burns, skin disorders, lnfluE>nza, pneumonia and other ailments.

. PAn. 4. The statements and representations set forth in the preced- 111Ft paragraph are false and misleading in that the use of Eucathol "'.1ll not prevent awl ~ure, nor is its use beneficial in the treatment of "insect bites, sunburn, piles and hemorrhoids, asthma and hay ~ever, catarrh, colds, skin irritations, scalds and burns, skin disorders, u and pneumonia."

l)An: 5. Said statements and representations set forth in paragraph 3 herem, so made by respondent, have, and have had a tendency and capacity to induce members of the public and prospective purchasers to form the mistaken and erroneous belief that said statements and representations are true and, acting in such erroneous belief, the said PUrchasing public has been induced to purchase, and has purchased, respondent's said product, thereby unfairly diverting trade to respondent from its said competitors to the injury of competition in rornrnerce among and between the various States of the United States and to the injury of the public.

CONCLUSION 111e aforesaid acts and practices of the respondent, Eucathol Com- Pany, Inc., a corporation are the prejudice of the public and of re- ~Pondent's competitors a~d constitute 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 l!'ederal Trade Commission to define its powers and duties, and for Oth ' · er purposes." ORDER TO CEASE AND DESIST ~· 'I'his proceeding having been heard by the Federal Trade Commisfl.Ion Upon the complaint of the Commission and the substitute answer led herein on the first day of May 1937, by respondent, admitting all the n1aterial allegations of the complaint to be true and waiving the tal· · · d d Cing of further evidence and all other mtervenmg proce ure, an the Commission havin" made its findings as to tlm facts and its conclu · e. • · f A t f Sion that said respondent has violated the provisions o an c o Collgress approved September 26, 1914, entitled "An Act to create a Oruer 23F. T. C.

Federal Trade Commission, to define its powers and duties, and for other purposes."

It is ordered, That the respondent, Eucathol Company, Inc., a corporation, its officers, representatives, agents, and employees, in connection with the offering for sale, sale and distribution of its product now known as "Eucathol" in interstate commerce or in ·the District of Columbia, do forthwith cease and desist from representing, expressly or by implication, in newspapers, magazines, periodicals, in radio broadcasts, in pamphlets, and in, by and through other advertising media, that the use of its said product "Eucathol," or any other product composed of substantially the same ingrNlients as the product now kno\vn as "Eucathol," will prevent or cure, or is beneficial in the treatlllent of insect bites, sunburn, piles and hemorrhoids, asthma and hay fewer, catanh, colds, skin irritations, scalds, and burns, skin disorders, influenza and pneumonia.

It i8 further ordered, That respondent shall, within GO days after ~crvice upon it of this order file with the Commission a rl'port in writing setting forth in detail the manner an(l form in which it has complied with this order.

GEORGE C. 1\IILLF.R & CO,, lnc. 319 Syllabus