The Eucathol Company, Inc.

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IN THE M.n·n:n OF EUCATHOL COMPANY, INU.1 I'COMPLAINT, l\IODII!'IED FINDINGS AND ORDER IN REGARD TO Tile ALLEGIW VIOLATION OF' SEC, II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 8069. Oomplaint, Mar, 4, 1931-Decislon, Nov. 8, 1981 \Vherc u corporation !'ngagcd In manufacture and sale of "Eucathol," compound or medicine for use in treatment of coughs, colds, burns, sunburn, insect bites, hay fever, asthma, influenza, and other affiictions, and as aftershaving cream, through rubbing or massaging same on flesh or through inhalation of vapors thereof, in substantial competition with those engaged in sale or offer to general public of compounds, medicines, salves, and ointments used for purposes for which its said preparation was offeredlleprp:;;ooted, in advertising its said product in newspapers and periodicals of general circulation, and through radio bt·oadcasts, and in pamphlets, and through printed testimonials, photographs, and pictures and legends on cartons containing said compound, and in circulars enclosed in cartons thereof, and through other advertising matter, that use of such "Eucatbol" would prevent or cure, or was beneficial in treatment of, insect bites, sunburn, plies, hemorrhoids, asthma, hay fever, catarrh, colds, skin irritations, scalds and burns, skin disorders, influenza, pneumonia, and other ailments, facts being said statements and representations as to the efficacy thereof In the tt·eahnent of piles, hemorrhoids, asthma, bay fever, catart·h, lnfluenzn (flu) or pneumonia were each and all false and misleading; With tendency and capacity to induce members of publlc and prospective purchasers to form mistaken and erroneous belief that said statements and representations were true, and with re~mlt that such purchasing public, acting on snell erroneous belief, was induced to buy, and bought, its said products, and trade was thereby unfairly diverted to it from its said competitors; to the Injury of competition ln commerce nmong the States, and to the injury of the public:

Held, 'that such acts and practices in sale, offer and advertisement of aforesaid product as a preventive or cure, ot· as beneficial in treatment or piles, hemonhoid:,!, nsthmu, hay fever, catarrh, influenza (flu) or pneumonia, were to the prejudice of the public and competitors and constituted unfair methods of competition in commerce.

Mr. E. J. Ilorniurook for the Commission.

Standard, Carey & Standard, of Shawnee, Okla., for resp01Hlent. Complaint Pursuant to the provisions of an Act of Congress, approved Sep· tember 2G, 1914, entitled "An Act to create a Federal Trade Com· mission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that The Euca· 1 See orjglnal findings and ord('r as or June 20, 19:17, In this matter, nt page 313, sUPI"II· EUOATHOL COMPANY, INC. 1291 1200 Cmuplaint thol Company, Inc., a corporation, has been and now is using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint and states its charges in that respect as follows: PARAGRAPH 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 for use in the treatment of coughs, colds, scalds, burns, sunburn, insect bites, hay fever, asthma, 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 onto the flesh, or by inhaling its vapors. Respondent has designated said compound us "Eucathol." Respondent sells said product to wholesale druggists who sell said product to retail druggists, and also direct to retail druggists. The reta,il druggists sell said product directly to the consumers thereof.

In the course and conduct of said business respondent ships, or euuscs to be shipped or tmnsported, said product when so sold from 1he 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 product so sol<l hy said respondent in commerce between and among the Yaricllls .Stntrs of the Unite<l Stall's and in the District of Columbia.

PAn. 2. In the course mHl c;mduet of said business, respondent is How, and has been during all of the times herein mentioned, engage1l in substantial comprtition with Yarious corporations, firms, and individual:,; selling, or offering for sal<', to the getwral public compounds, nwllicines, r-.aln•s, and ointments and other remedies used for the purposes described in pttrngmph 1 hereof. PAn. 3. In the cotm;e and conduct of the business as aforesaid, respondent, in soliciti11~ the sale of uml selling said products, has ndvertisL•Il the san1e in newspapers, magazines, periodicals of general <:ircnlation, by nwans of radio broadcasts, and in pamphlets, printed tl'stilllonials, aml othl'l' printed mutter. It has also made usc of I>hotogntphs, other pictures and l<'gends on cartons containing said compound and in circulars inclosed in said cartons, and in other nclnrtising media. In and through each and all of the advertising Findings 25F.T.C.

media above enumerated, respondent has made, and is making, ex~ pressly or by implication, the following representations: That the use of Eucathol will prevent and cure, or is beneficial in the treatment of: insect bites, sunburn, piles and hemorrhoids, asthma and hay fever, catarrh, colds, skin irritations, scalds and burns, skin disorders, flu .and pneumonia, and other ailments. PAR. 4. The representations described and set forth in paragraph 3 above are false and misleading, in that the use of Eucathol will not prevent and cure, and is not beneficial in t}:te treatment of, insect bites, sunburn, piles and hemorrhoids, asthma and hay fever, catarrh, colds, skin irritations, skin disorders, scalds and burns, flu and pneu· monia, or other ailments or afflictions of the human body for which it is recommended by the respondent.

PAR. 5. Said statements and representations set forth in paragraph 3 so made by respondent have, and have had, the tendency and capac· ity 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 product, thereby unfairly diverting trade to respond· ent from its said competitors, to the injury of competition in com· merce among and between the various States of the United States, and to the injury of the public.

PAn. 6. The above alleged acts and practices are each and all to the prejudice of the public, and of respondent's competitors, and con· stitute unfair methods of competition in interstate commerce within the meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, MoninED FINDINGS AS TO THE FACTS, A~D OnnEn Pursuant to the provisions of an Act of Congress approved Sep· tember 26, 1914, entitled "An Act to create a Federal Trade Com~ mission, to define its powers and duties, and for other purposes,'' the Federal Trade Commission, on the 4th day of March Hl37, is~ sued and served its complaint in this proceeding upon respondent, Eucathol Company, Inc., a corporation, charging it with the use of unfair methods of competition in commerce in violation of the pro~ visions of said act. After the issuance of the complaint and the filing of respondent's answer, the Commission, by order entered therein, granted respondent's motion for permission to withdraw said answer and substitute therefor an answer admitting all of the ma· terial allegations of the complaint to be true, and waiving the taking EUCATHOL COMPANY. INC. 1293 1290 Findings of further evidence and all other intervening procedure, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and the substitute answer, hiefs and oral arguments of counsel having been waived, and the Commission, having duly considered the same, made and entered its findings of facts and conclusion on the 29th day of June, A. D., 1937, and the Commission now being desirous of modifying its said findings, as is provided for under the provisions of said Act of Congress, makes this its modified findings as to the facts and conclusion drawn therefrom:

FINDINGS AS TO Tile FACTS PARAGRAPH 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 use in the treatment of coughs, colds, scalds, burns, sunburn, insect bites, hay fever, asthma, influenza and other human affiictions. 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 vup0rs. Respondent has designated the said compound as "Eucathol." Respondent sells said product direct to retail druggists and to wholesale druggists, who also sell the same to retail druggists. The said retail druggists sell said product directly to the consumer ~hereof. In the course and conduct of said business respondent ships, or causes to be shipped or transported, said product, when so sold, from 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 th~ State of Oklahoma. There is now, and has been, during all of 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 District of Columbia.

PAR. 2. In the course and conduct of said business, respondent is now, and has been, during all of the times herein mentioneu, E'Hptged in substantial competition with various corporations, copartnerships, firms, and individuals, selling, or offering for sale to the general public, compounds, medicines, salves and ointments used for the purposes described in paragraph 1 hereof.

1294 FEDERAL TRADE 001\IMISSION DECISIONS Cone! uslon 25F.T.C.

PAR. 3. In the course and conduct of the business, ns aforesaid, respondent, in soliciting the sale and selling said product has advertised the same in newspapers, magazines, periodicals of general circulation, by menus of radio broadcasts, and in pamphlets, and by, in and through the use of printed testimonials and other pripted matter, photographs, and other pictures and legends on cartons containing said compound, and in circulars enclosed in said cartons, and in and upon other advertising media. In and through each and all of the advertising media above enumerated respondent has made1 expressly or by implication, the :following representations: That the use o:f "Eucathol" will prevent or cure, or is beneficial in the treatment of, insect bites, sunburn, piles, hemorrhoids, asthma, hay :fever, catarrh, colds, skin irritations, scalds and burns, skin disorders, influenza, pneumonia, and other ailments. PAR. 4. The use of "Eucathol" will not prevent or cure, nor is its use beneficial in the treatment o:f piles, hemorrhoids, asthma, hay fever, catarrh, influenza (flu), or pneumonia, nor is its use beneficial in the treatment of other human ailnwnts, except in case~:> of heatl colds and the coughs associated t h<'re,vit h anl in afflictions wherein a counter-irritant is indicated.

PAR. 5. The said statements and J'P}Hes<'lltntions as to the efficacy of "Eucnthol" in the treatment of piles, hemorrhoids, asthma, huy :fever, catarrh, influenza (flu) or pneumonia are each awl all false and mislearling, and said statements so made by respondent with respect to such ]ast.named affiictions 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 on 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 commerce among and between the various States of the United States and to the injury of the public. CONCLUI'ION The acts and practices of the respondent, Eucathol Company, Inc., a corporation, in selling, offering for sale, and advertising as afore- Raid, the product "Eucathol" as a prev('ntive or cure, or as beneficial in the treatment of piles, hemorrhoids, asthma, hay fever, catarrh, influenza (flu) or pneumonia, are to the prf'jndice of the public and of respondent's compl'titors and constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of nn Act of Congr<'ss, approved September 2G, 1914, entitled "An Act to EUCATHOL COMPANY, INC. 1295 l2'JO Order create a Federal Trade Commission, to define its powers and duties, and for other purposes."

1tiODIFIEO OHOlm TO CEASE AND OESIS'l' 'this proceeding having been heard by the Federal Trade Conunission upon the comp.laint of the Commission and the substitute answer filed herein, on the 1st day of May 1937, by respondent, admittin~ all of the material alh•gations of the complaint to be true and waiving the taking of further evidence and all other intervening procedure, and the Commission., on the 29th day of June, A. D., 1937, having made its findings as to the facts and its conclusion that said respondent had violated the provisions of an Act of Congress, approved SPptemher 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," and having issued its order to cease and desist on the said 29th day of June, A. D., 1937, and the Commission having on the 3rd day of November, A. D., 1937, modified its said findings of facts nnd conclusion, and now being desirous of modifying its order so as to conform with its said modified findings of facts and conclusion, and being advised in the premises, It is ordered, That the said order to cease and desist be, and the same is hereby, mollifiell to read as follows: Uespondent Eucn.thol Company, Inc., a corporation, its oflicel'i,;, ~·(>presentatiws, agents, and employees, in connection with the offer- Ing for sale, sale aml distribution of a pharmaceutical preparation now designated as "Eucathol" or in the sale and distribution of any <Jther pharmaceutical preparation composed of substantially the same ingredients, whether sold under the name "Eucathol" or any other name, in interstate commerce or in the District of Columbia, forth- With cease and desist from :

Representing, directly or by implication, that said preparation Will prevent or cure, or is beneficial in the treatment of, piles, hemorthoitls, asthma, hay fever, catarrh, influenza (flu) or pneumonia, or any other ailments, conditions, and afflictions of the human body, Provi<1Nl, however, that respondent is not hereby prohibited from J·representing that said preparation may be hPiwficial in the treatment of head colds, and coughs associated therewith, or in the treatnwnt of other conditions wherein a counter-irritant is in<licated. It i11 further ordered, That respondent shall, within 60 days after f;ervire upon it of this modifiP<l order, file with the Commission a I·eport in writing setting forth in detail the manner and form in which it has complied with this mo<lifiPtl onl(>t'. 1;';8J21"'-'\!) -"4 Syllabus 25F.T.C.