Dirigold Metals Corporation

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IN THE MATTER OF DIRIGOLD METALS CORPORATION COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLA'tion OF SEC. l'i OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2815. Comp~aint, May 21, 1936-Decision, Aug. S, 1981 Where a corporation engaged in the manufacture and sale of an alloy containing no gold, but composed chiefly of aluminum and copper, and of highly polished flat and hollow tableware and other articles fabricated therefrom, and so finished that they had color, appearance and luster of 14-kara t or 18-karat gold, depending upon discernment of particular observer, In direct and substantial competiton with those engaged in manufacture, sale, and distribution in commerce among the various States nnd in the District of Columbia of similar tableware and other articles ot same general kind and for the same purposes, composed as case might be, of sterling silverware, silver-plated ware, and other materials- Included word "Dirlgold" in ltl! corpomte name, and thus named, designated, and described said alloy and ware made therefrom, and stamped said word on each article made from said alloy, and sold by it as aforesaid, and featured and displayed same in trade-mark used by It and placed 11pon Its printed matter and wherever in such matter its aforesaid corporate name occurred, and thereby falsely represf'nted that said tableware and other articles contained gold, and through use in advertising matter distributed to customers, in connection with word "Dirlgold," of many statements, phrases, and descriptive terms, such as "Dirigold • • • possesses the color and lustrous beauty of gold!" "No home llf'Cd be denied the rare luxury and bf>auty of gold on the table and In the home," "Golden Anniversaries • • • the Ideal gift tor such momentous occasions," "SOLID not plated," served to create belle! that said ware contained gold;

\Vlth result that some members of the public were In fact misled through such inbez·ently mlslending designation used as aforesaid, which, together with misleading Implications thereof, served to attract prospectve customers to ware thus designated and to cause them to look with favor thereon by reason thereof, and with tendency and capacity to confuse, mislead and deceive members of the public into the erroneous belief that its said ware contained at least some gold, and to Induce them to buy same because of the erroneous belief thus engendered, and to divert trade to it from competitors engaged In sale In interstate commerce of fiat, hollow and other ware adapted to and used for same general purpo:;es, and with e11\•ct of diverting business to It from comvetltors who do not nJisrepresPHt mntPrlals from whleh their ware Is made, but who truthfully and accurately state the facts In such rel'lpects, to their substantial Injury and pr('judkf', and with result of placing In the hands of retail deal<'rs an instrument of fraud and deception throu~h which ~;ud1 d(•alpr-s might mlsll.'ad and dl'ceh·e Jlllrchnslug public and promote ~ale of !Such ware, and c-cause purchases thereof by members of JlUbllc heeause of misleading lmpn·sslon thereby created: DIRIGOLD METALS CORP. 665 664 Complaint Held, That such act~; and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before Air. John 1V. Addison, trial examiner. Mr. Ilarry D. llfichael for the Commission. McLeod, Fixel & Fixel, of Detroit, Mich., for respondent. Complaint 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, having reason to believe that Dirigold l\Ietals Corporation, hereinafter referred to as respondent, has been and now is using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to the Commis- ~ion that a proceeding by it in respect thereof would be in the public Interest, hereby issues its complaint stating its charges in that respect as follows:

• PARAGRAPH 1. That said respondent, Dirigold Metals Corporation, 1~ a corporation organized, existing, and doing business under and by ''Virtue of the laws of the State of Delaware, with its office, factory, and principal place of business in the city of Darrington, in the State <lf Illinois.

PAn. 2. That said respondent is now and has been engaged for more than six months last past in the manufacture of an alloy designated ~ and of tableware and other articles fab-and. described as "DiriO'old"ticated therefrom, and in the sale of such tableware and other articles lllade from such alloy in commerce, as herein set out. Said respond- ~nt, in the course and conduct of its said business, causes the said tableware and other products manufactured from said alloy to be transported from its said place of business in Illinois to, into and through States of the United States other than Illinois to various and numerous customers in such other States. Respondent's usual course ·of dealing is to sell said products to department stores, jewelers, or other retail dealers through whom or which they are in turn sold to members of the consuming public.

PAn. 3. That, during the time above mentioned, other individuals, firms, and corporations in various states of the United States are and llave been engaged in the manufacture, sale, and distribution in ~commerce of tableware and other articles of the same general kind and for the same purposes of use as those made and sold by respondent, as aforesaid, some of which said ware is of sterling silver, some of silver plated ware and some of other materials, and such other Complaint 25F. T. C.

individuals, firms, and corporations have caused and do now causetheir said tableware and other such articles, as aforesaid, when sold by them, to be transported from the respective States of the United States where they are located to, into and through States other than the State of origin of the shipment thereof to the purchasers thereof at their respective places of location. Said respondent has been, during the aforesaid time, in competition in interstate commerce in the sale of its said tableware and other articles made from said alloy with such other individuals, firms, and corporations. PAR. 4. That the respondent, in l'Oillwction with the sale of its said tableware and other articles made from said alloy, as aforesaid, represents by the means and metholls as herein set out that they contain gold. In truth and in fact, there is no gold in such tableware and other articles manufactured from said alloy. Said alloy and the products ma(le therefrom by respondent are composed chiefly of aluminum and copper. The products made from said alloy by respondent are highly polishe(l and so finished that they are of the color, appearance and lustre of 14-karat gold. Respondent causes said alloy and the articles made therefrom to be named, designated and described as "Dirigold." Said name "Dirigold" is stamped by respondent on each article made from said alloy and sold by it, as aforesaid. It is the most prominent part of the trade-mark used by respondent in its advertising literature, letterheads, and other printed matter. It is used as a part of respondent's corporate name. It has also been adopted by respondent as a descriptive term and is so used by it in its printed matter. It is also used by its repre~entatives and its retail dealers as the term to describe such products in conversation and otherwise.

Said name "Dirigold," so applied to articles containing no gold, is inherently misleading in that it implies and serves as a representation that such products contain at least some gold. The use of said term as a name for such articles and in the connections, as aforesaid, further has the tendency and capacity to lead members of the public to believe that the products so designatf'd contain gold and it has had and does have such effect.

PAR. 5. That respondent in its circular advf'rtising mattf'r uses many statements, phrases and descriptive terms that serve to increase the sttid misleading effect of the word "Dirigold." .Among such statements, phrases and descriptive terms are the following: Dlrlgold-The faj;hfonoLle and t>xqul;,!te wore that possesses the color and lustrous beauty or gold! Like the pri.'Cions metals-Dirlgold Is solid cleor through. DIRIGOLD 1\IETALS CORP. 667 Findings No home need be denied the rare luxury and beauty of gold on the table and In the home.

Dirigold is truly-the ultimate gift of a Golden .Age. Golden .Anniversaries. How appropriate that Dirlgold be always considered tts the ideal gift for such momentous occasions. SOLID not plated.

• "' • its rich, warm, lustrous golden color • • •. PAn. G. That the representations and practices 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 respondents said ware contains gold, when such is not the fact, and to induce them to buy the same because of such erroneous belief engendered as above set forth. Sa ill representations and practices further result in placing in the hands of retail dealers, who handle and sell the same, an instrument of fraud and deception by Jneans of which they may mislead the purchasing public and promote the sale of such ware and cause the purchase thereof by members of the public who are thereby cause1l to entertain such mistaken belief. Said practices of respondent also have the tendency and capacity to ~livert trade to respondent from competitors engaged in the sale in Interstate commerce of tableware of various kinds and articles of tl1c same general kind as those made and sold by respondent. There Ule among the competitors of rrspondent those who do not in any \rise mist·epresent the material or materials of which their products ale made or the composition of the same, but who truthfully and . ~ccurately state the facts in such rrgard without the use of misleadlllg- terminology or other misleading representations. As a result of l'b;llOlldellt's said practices, as herein set forth, substantial injury has been and is now bling done by respondent to competition in comllleJ·ce between an<l among the various States of the United States. PAu. 7. The above acts and things done by respondent are all to the illjmy and prejudice of the public and the competitors of responde.nt in interstate commerce within the intent and meaning of Secbon 5 of an Act of C01wress, entitled "An Act to create a FederalT e rude Commission, to define its powers and duties, and for other llUrposes," approwd September 2G, 1914.

REPORT, FINDINGS AS TO THE FACTs, AND Onder Pursuant to the provisions of nn Act of Congress approved Septe~~er 2G, 1914:, entitled "An Act to create a Federal Trade Com- ~lSSlon, to define its powers and duties, nnd for other purposes," . e Federal Trade Commission on May 21, 1936, issued and served lf:s complaint in this proceeding upon respondent Dirigold Metals 668 FEDERAL TRADE COl\IMISSION DECISIONS Findings 25 F. T. C. Corporation, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint, and the filing of respondent's answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by Harry D. Michael, attorney for the Commission, before J olm "\V. Addison, an examiner of the- Commission theretofore duly designated by it, and in opposition to the allegations of the complaint by Rowland "\V. Fixel, representing McLeod, Fixel and Fixel, attorneys for the respondent: and said testimony and other evidence were duly recorded and filed in theoffice of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint, the answer thereto, testimony and other evidence, briefs in support of the complaint and in opposition thereto, and the oral arguments of counsel aforesaid; and the Commission having 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 its conclusion drawn therefrom: FINDINGS AS TO Tim FACTS PARAGRAPH 1. The respondent, Dirigold Metals Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office, factory, and principal place of business in the city of Darrington, in the State of Illinois. Said corporation was organized in January 1934· PAR. 2. The respondent is now and has been engaged since on or about July 3, 1035, in the manufacture of an alloy designated aud described as "Dirigold'' and of tableware, consisting of flatware and hollow ware, and other articles fabricated therefrom, and in the sale of such ware in commerce between and among the various State9 of the United States. The respondent, in the course and conduct. of said business as aforesaid, causes and has caused the said tableware an<l other articles manufactured from sai<l alloy to be transported from its said place of business in Illinois to, into, and through States of the United States oth('r than Illinois, to various and nu· merous customers in such other States to whom such ware is or has been sold. Respon<l('nt's usual course of <lealing is and has been t.'' !"ell its said products to distributors or wholesalers and to retail d('alers through whom they are in turn sold to members of the consuming public.

PAR. 3. During the time above mentioned other individuals, firln:, and corporations in various States of the United States are and hare DIRIGOLD METALS CORP. 669 664 Findings been engaged in the manufacture, sale, and distribution in commerce between and among the various States of the United States nnd in the District of Columbia of tableware, consisting of flatware and hollow ware, and other articles of the same general kind as made and sold by respondent, as afor.esaid, and for the same purposes of use, some of which is sterling silverware, some of which is silverplated ware and some of which is ware of other materials. Such other individuals, firms, and corporations have caused and do now cause their said tableware and other articles as aforesaid, when sold by them, to be transported from the respective States of the United States where they are located to, into, and through States other than the State of origin of the shipment thereof to the purchasers of the same at their respective places of location. Among such competitors are R. Wallace and Sons Manufacturing· Company, w·allingford, Conn.; International Silver Company, Meriden, Conn.; Oneida, Ltd., New York, N. Y., and Oneida, N. Y.; and National Silver Company, New York, N. Y. Respondent was, during the aforesaid time, in competition in interstate commerce in the sale of its said tableware ana other articles made from said alloy with such other individuals, firms, and corporations. Such competition has been direct and substantial.

PAR. 4. The respondent, in connection with the sale of its said tableware and other articles made from said alloy, as aforesaid, has represented by the means and methods as herein set out that such tableware and other articles contain gold, when in truth and in fact such is not the fact. Said alloy and the products made therefrom by respondent are composed chiefly of aluminum and copper. Other metals enter into the composition of said alloy but the process is claimed to be a secret one and the respondent did not reveal their identities on that account. However, there is no gold in said alloy or the products made therefrom. It was so admitted. The Ware made from said alloy by respondent is highly polished and so finished that it is of the color, appearance and luster of gold, such appearance being that of fourteen-karat gold or eighteen-karat gold depending upon the discernment of the particular observer. Re- ~pondent has caused said alloy and the articles made therefrom to be named, designated and described as "Dirigold." Said name ''Dirigold" is stamped by respondent on each article made from flaid alloy and sold by it as aforesaid. It is the most prominent Part of the trade-mark used by respondent and placed upon its Printed matter. Said term is used as a part of respondent's corporate name ancl appears wherever the corporate name occurs on respondent's printed matter. Said word is also used by respondent Findings 25F.T.C.

as a descriptive term to describe its said ware. It is also used by respondent's representatives in the sale of said ware as well as by distributors and wholesalers thereof and also by the retail dealer:) who sell it to the public as the term to describe it in conversation and otherwise.

PAR. 5. Respondent, in its advertising matter distributed to its .customers, used many statements, phrases and descriptive terms which, when used to describe said ware in connection with the word "Dirigold," served to create the belief that said ware contained gold. Among such statements, phrases and descriptive terms are the fol· lowing:

Dirigold-The !nshionahle and exqnislte ware that pos!,:esses the color nnd lustrous hNluty of gold.

Like the Prt'cious metnls-Dirlgold is solid clmr through. No home llPeu be dPnit>d the rare luxnry and hPauty of gold on the table and In the home.

Dirl:.:old I>~ t1·u!y-the ultimnte gift of n Goldt>n Age. Golden Aunln•rsaries. Ilow appropriate that Dirlgold he always <·on:<i<lt'red ns the ldt•al gift for such momentoml occasions. SOLID not plated.

• • • Its rich, warm, lustrous golden color • • •. PAR. G. Retail stores whirh handle m.;pmHlent's said ware do their own newspaper adn•rtising of the same. Some stores have used descripti,·e terms in so advertising "Dirigold" which, by use of the word "gold" or similar terms therein to describe said ware in con· nection with the word "Dirigold" have the tendency and capacity to create the belief that the ware so described contains gold. PAR. 7. The name "Dirigold" applied to ware containing no gold, especially when such ware has the app('arance of gold, is inherently misleading in that it implies and serves as a representation that such ware contains at least some gold. The use of said term as a name for flatware, hollow ware, and other ware as made and sold by respond· ent has the tendency and capacity to lead members of the public to believe that the ware so designated contains goltl. Some members of the public lun·e in fact lJeen so misled alll lun·e entertained the belief that "Dirigoltl" ware contains gold, which said L('lief was eng('ndered l,y the use of said word "Dirigold'' or Ly a combination of the impression creatNl by said word "Dirigold" and the uppearance of the ware to which it was applied. The tendency and capacity to mislead by use of the word "Dirigold" to describe said ware is increas('d by the fact that the ware so designated has the appearance of gold. Furthermore, the use of descriptive terms such ns those previously referred to emphasizing the word "gold" or like .expressions, serves to increase the misleading effect of said ternl DIRIGOLD METALS CORP, 671 6G4 Order "Dirigold" when used as aforesaid. Said term, together with the misleading implication contained therein, as aforesaid, serves to attract prospective customers to the ware so designated and to cause them to look upon it with favor because thereof. PAn. 8. The representations of respondent as aforesaid have had the tendency and capacity to confuse, mislead and deceive members of the public into the belief that respondent's said ware contains at least some gold, when such is not the fact, and to induce them to buy the same because of the erroneous belief engendered as above set forth, and to divert trade to respondent from competitors engaged in the sale in interstate commerce of flatware, hollow ware, and other Ware adapted to and used for the same general purposes for which respondent's ware is used. There were and are among the com- Petitors of respondent those who do not misrepresent the materials from which their ware is made but who truthfully and accurately state the facts in such respect. Respondent's said acts and practices have tended to and do in fact divert business to respondent from its said competitors to the substantial injury and prejudice of such competitors. 1\Ioreover, the use of the term "Dirigold" to describe a.nd designate respondent's said ware, and respondent's representations and practices in regard thereto, as herein set out, result in Placing in the hands of retail dealers an instrument of fraud and ~eception by means of which such dealers may mislead the purchas- Ing public and promote the sale of such ware and cause the purchase thereof by members of the public because of misleading impressions thereby created.

CONCLUSION The aforesaid acts and practices of the respondent, Dirigold Metals Corporations are to the prejudice of the public and of re- ~Pondent's competitors and 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 Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER '1'0 CEASE AND DESIST ~. 'I'his proceeding'~ having'~ been heard by the Federal Trade Commist 0~ upon the complaint of the Commission, the answer of respondent, estunony and other evidence taken before John ,V, Addison, an e:lrallliner of the Commission theretofore duly designated by it, in ~support of the allegations of said complaint and in opposition thereto, l'lefs filed herein, and oral arguments by Harry D. )fichael, counsel 1~812lm__SD----43 CO~IMISSION DECISIONS672 FEDERAL TRADE Order 25F.T.C.

for the Commission, and by Rowland ·w. Fixel, representing McLeod, Fixel and Fixel, counsel for the respondent, 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, to define its powers and duties, and for other purposes."

It is ordered, That the respondent, Dirigold Metals Corporation, its officers, re.presentatives, agents, and. employees, in connection with the offering for sale, sale and distribution of tableware, consisting of flatware and hollow ware, and other articles mad.e from an alloy of metals containing no gold, in interstate commerce or in the District of Columbia, do forthwith cease and desist from: Representing, through the use of the word "dirigold" or "gold" or any coined word. containing the word "gold," alone or in connection or conjunction with any other word or words, in its corporate name or as d.cscripti ve of or as a trade-mark for its prod.ucts, or in any other manner whatever, or through any other means or device, that such tableware, flatware, hollow ware and other articles contain gold. It is further ordered, That the respond.ent 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.

DIRIGOLD DISTRIBUTORS, INC. 673 Syllabus