Masonite Corp

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IN THE MATTER OF THE MASONITE CORPORATION COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLA1'ION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2611. Complaint, Nov. 6, 1!135-Decision, Nov. 6, 1931 Where a corporation engaged in manufacture of wall board and wall coverings compounded from wood chips and fibers and other substances under u process resulting In a hard durable sheeting or covering upon which were scored or stamped squares resem!Jling, when painted or lacquered by others with different color from remainder of the sheet, mortar lines upon C\llll· pletely Installed ceramic surface, and in the sale and distribution, in other States and in the District of Columbia, of such products, in competition, among others, with many eng-aged in manufacttu·e, sale and transportation, as aforesaid, of tile made from clay and baked in kilns and properly described and designated us llUCh, and with others who make, sell, and distribute vo."all board and wall coverings and various other products, including copper tile, glass tile, wood tile, ru!Jber tile, cork tile, and the }iJ;:e, properly thus designated and described- Made use of d~?signation "Temprtilc" as <lesiguatlou of its said rwodnct~ in extensively advertising the sam<', notwithstanding fact its aforesaid board and coverings were not that bokl'd clay or epramlc product connotetl by word "tile" standing alone and without qualifying prefix as hPrPin!J:forc set forth; with tendency and capacity to mislead and deceive sn!Jstantial portion of purchasing publlc, to its damage and injury, into the belief that aforesaid products, thus deslgnatPd, wrte made from LnkPd clay, onrl with tend<'ney to and efr<'et of di,·erting tra<lc from tile or haked clay products of competitor-manufacturers who 'make and sell, as aforesaid, tile products :

IIcld, That such acts and practices were to the prejudice of the public and compl'titors and constituted unfair methods of competition. Defore llfr. Charles F. Diggs, llr, John J. Keenan and llfr. John L. ll ornor, trial examiners.

11!r. Alden S. Bradley and Mr. 111orton N esrnith for the Commission. Dyke & Schaines, of New York City, for respondent. Ilines, Rearirk, Dorr & Ilamm~md, of New York City, for Tile Manufacturers' Assn., Inc., amicus curiae. Co111PLAINT Pursuant to the provisions of an Act of Congress approved September 2G, 1914, entitled "An Act to create a Federal Trade Commis- Eion, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that The Masonite Corporation, hereinafter referred to as respondent, has been and is w~ing unfair methods of competition in commerce as "commerce'' THE MASONITE CORPORATION 1321 1320 Complaint is defined in said act of Congress, and it appearing to said Commission 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. Said respondent The Masonite Corporation is a corporation organized and existing under and by virtue of the laws of the State of Delaware with its principal office and place of business located in Chicago in the State of Illinois. Respondent has been, during its entire corporate existence, engaged. in the manufacture, sale, and distribution in interstate commerce of insulating board and Wall board manufactured out of wood refuse. Respondent, in the course and conduct of its business as aforesaid, has manufactured, sold, distributed, and transported, or caused to be transported., from its factory in Laurel, Miss., and from other warehouses used by the respondent in the State of Mississippi and in the State of Illinois for the purpose of storing its said products, insulating board and wall board, and has caused such products to be ~ransportecl from the place where the same is manufactured or stored lU the States aforesaid into States other than the State of origin of such shipments, and has maintained a constant current of trade and commerce between and among the various States of the United States. PAR. 2. Respondent is the sole owner and patent holder of the Process of the manufacture of the various commodities above described as being manufactured and vended by it, and in the course and conduct of its business has manufactured and sold under the trade name of "Temprtile" a commodity manufactured solely of Wood or wood refuse, and has displayed and featured the name so adopted and attached to such commodity in advertisements and ad- Vertising matter issued and circulated by it, and has caused, either ~separately or in immediate conjunction with such trade name the following statements to appear:

Aristocrat in Beautiful Low Cost Tile.

There are two methods of Installing Temprtile. Oue Is to cement the tile over plaster • • • This new, modern a'u wood Temprtile ls made of all new rresdwood • • •. It is furnished In % inch and 1\ inch thicknesses; 4 feet by 12 feet panels, \With indentations compressed in the surface. When properly finished lt produces the effect of 4 luch by 4 inch tile nnd in several wnys it ls superior to regular tlle.

PAn. 3. The use of the trade name "Temprtile," nnd the use of the advertisements and ad,·ertising matter as quoted above, have the capacity antl tendency to, and <lo, in fact, mislead and deceive a Euh-tantial portion of the purchasing public into the belief that. 1322 J<'EDERAL TRADE COMMISSION DECISIONS Complaint 25 F. T. C. the product so described is "tik" as that word is understood in the building trade and by the general public.

The word "tile'' as understood in the building trade and by the general public designates a product consisting of clay or earth; :ouch product being manufactured by a process of baking in a kiln or oven.

PAR. 4. In the course and conduct of the business of the respondent· as above related, it manufactures for sale to and resale by nonlllanufacturing individuals, firms, copartnerships and corporations engaged in competition with respondent in the merchandising of similar products, a commodity identical, or virtually identical, in its composition and processing with the commodity last above described, and distributes such commodity in interstate commerce among such competitors, prohibiting, however, the use by them of the trade name "Temprtile," but permitting, encouraging, and directing the selection of various other names which it approves and which names are trade names under which the identical or virtually identical, product is marketed by such competitors to the public. Some of the names so selected and approveu by the respondent are us follows:

Celotex hard Tile Canlc Dense Tile Hamasote Tempered 'llle Gold llond Hard llonrd Tile Armstrong Temwood Tile IlE'nver Dense Tile Tufrwood Tile .uul other similar names, all of which coutain as part thereof, the word "tile."

In addition to the practice last above set forth, the said respondent prepared and furnished and uoes now prepare and furnish to ~uch competitors, advertisements and advertising matter which they useu and now use in soliciting the sale of anu selling said products in interstate commerce, and which advertisements and advertising matter containeu anu do contain expressions and representations :::imilar to those set forth in paragraph 1 of this complaint. In truth and in fact, none of the prouucts so sold to competitors, as above related, are clay products, nor are they baked in a kiln, and they are not and have not been "tile" as that word is understood in the building trade and by the general public. PAR. 5. There are, among the competitors of respondent, a substantial number of persons, partnerships, and corporations engaged in the manufacture of insulating boards and wall boards out of wood or pulp refuse, who do not falsely represent the product so manufactured by them to be "tile."

THE MASONITE CORPORATION 1323 1320 Findings There are, among the competitors of respondent, a substantial number of persons, partnerships, and corporations engaged in the manufacture o£ "tile," which said "tile" is made by a process and of basic materials in consonance with the conception of "tile" as understood in the building trade and by the general public. The acts and practices of the rpspondent as above set forth have had and have the Capacity and tendency to divert trade unfairly to respondent from the aforesaid competitors.

PAR. 6. The acts and practices done by the respondent are all to the injury and prejudice of the public and of competitors of the respondent in interstate commerce, and constitute unfair methods o£ competition in interstate commerce within the intent and meaning o£ Section 5 o£ an Act of Congress approved September 26, 1914, entitled, "An Act to create a Federnl Trade Commission, to define its powers and duties, and for other purposes." UEPORT, FINDINOS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to drfine its powers and duties, and for other purposes," the Federal Trade Commission on November 6, 1!>35, issued, and on November 8, 1035, served its complaint in this proceeding upon respondrut, The Masonite Corporation, a corporation, charging it. with tho Use of unfair methods o£ competition in commerce in violation o£ the Provisions of said act. After the issuance of said complaint, and the ~ling of respondent's answer thereto, testimony and other evidence In support of the allegations of said complaint were introduced by Alden S. Bradley and Morton Nesmith, attorneys for the Commission, before John J. Keenan, an examiner of the Commission theretofore duly desi~nated by it, tmd in opposition to the alleg~tions of the complaint by Dyke and Schaines, attorneys for the respondent; and Sftid testimony and other evidence were duly recorde«l and filed in the office of the Commission. Tlwreafter, the proceeding regularly en.mc on for final hearing before the Commission on the said complaint, the answer thereto and tf.'stimony and other evidence; and the Co10mission having duly consider•d the same, and being now tully advised in the premises, finds that this proceeding is in the ~nterest of the public and makes this, its findings ns to the facts and Its conclusion drawn therefrom:

PARAGRAPH 1. The respondent, The Masonite Corporation, is a corporation organized and existing tm(lH ancl by virtue of the laws of Findings 25F.T. C.

the State of Delaware, with its office and principal place of business located at Chicago in the State of Illinois. Respondent has been, during its corporate existence, engaged, among other things, in the business of manufacturing, selling, and distributing wall board and wall coverings, which products are manufactured from wood fibre, and which respondent designates as "Temprtile." Respondent owns and operates a factory wherein its products are manufactured in the city of Laurel, State of Mississippi.

Respondent, in the course and conduct of its business, has sold, distributed, and transported or caused to be transported, its aforesaid product from its factory in the State of Mississippi to purchasers thereof located in various points of the States of the United States ()ther than the State of Mississippi, and has maintained a constant current of trade and commerce between and among the various States of the United States and in the District of Columbia. There are among competitors of respondent many persons, firms, and corporations located and doing business in the United States, engaged in the manufacture, sale, and transportation of tile in com· merce between and among the various States of the United States, which tile is manufactured from clay and baked in kilns, whose products are properly described and designated as tile. There are others who manufacture, sell and distribute wall board and wall cov· erings, and various other products, such as copper tile, glass tile, wood tile, rubber tile, cork tile, and the like, whose products are properly designated and described by such names. PAn. 2. The term "tile," when used alone and not in conjunction with other words is generally understood in the building trade and by the general public to be a hard clay product which has been baked in kilns and in its final form shaped into comparatively small-sized units. Tile, as so understood, is compounded from clays and a mix· ture of clays, feldspar, flint, talc, ball clays, prophyllite, aluminum hydroxid, silica, and some chemicals for coloring purposes. These materials are mixed in various proportions to produce various quali· ties in the tile. They are mixed in large mixing vats containing agitators, until the mixture of the ceramic materials with the admix· ture of water approaches the cons-istency of a thick soup. Then it is put in a filter press, the water being reduced to a certain percentage of the total content of the materials, and the materials coming from the filter presses are dried until they have a moisture content ranging from ten to fifteen percent. The materials are then pulverized into a dust form, which is pressed into tiles of various shapes. The tiles are then dried down to approximately zero per cent moisture content and fired in a kiln at a temperature exceeding red heat, which may j ~ THE MASONITE CORPORATION 1325 1320 Findings run from 1,200° Fahrenheit upward. The purpose of this firing is t.o harden the ceramic materia] until it is an impervious, dense, durable ~ass. There are glazed and unglazed types of tiles. The unglazed tile has a rough, unfinished surface, while the glazed tile has a shiny glass or decorative surface, the glaze being matured after the first firing operation by the addition of certain mineral oxides; after which it is put through a process known as "gloss firing." Floor and wall tiles are produced in relatively small individual units, ~~e ~:x:treme permissible size of the units being about six by twelve Inches, the reason being that the manufacturers of ceramic produc~s are ·confronted with the fact that clays and mixtures of clays, wi.tl1 other materials, when formed into wares, undergo shrinkage during the drying and firing processes. Therefore, one of the problems of the tile manufacturer is to produce ware free from warping or cracking, and the larger the unit the greater the liability of warping and cracking resulting from shrinkage of the mixture. Floor and wall tile of baked clay is installed upon a proper base and set in cement by workmen· known as "tile setters." The term "tile" when used alone and without descriptive words, means ceramic tile, which is a more complete name for the product just described. The use of the word "tile," standing alone and without descriptive words, dates back some four thousand years to the Egyptians, who, according to man's knowledge, were the first to discover the art of olding and baking clay into hard units, as above described. There are manufacturers, however, of other products designed to e used as floor and wah c~verjngs, whose said J;>£..o,du~l]__!!_re prop~rly I desi~nated and described a ru£2er_Jile, gl~e, copper tile, facoust'iCaTt'ile cor t1 e, wood tile, composition tile, metal tile, cement tile, linoleum tile, asphaltum tile, stone tile, and the 1il~ These products are generally understood in the building trade and by a sti6stanfial portion of the ~eral 1mblic as being CQVerings made f rom the substances---so mcEs_ated .~l- ~ord or word~ pz·cccding the Word "tile." \.

"'The respondent's product, known as "Temprtile," is compounded from wood chips and wood fibres and other substances and siccative materials, which are unique, and nre baked jn an oven at a high temperature, pressed and tempered, so that the final product is a hard, durable sheeting or covering. These sheets can be cut in practically any size desired, but the general size ordinarily sold by respondent is three by four feet. The surface of this sheeting or covering known as "Temprtile" is scored or stamped so that lines forming squares are impressed upon the sheeting and when painted or lacquered by others with a different color from the remainder of 1326 FEDERAL TRADE COl\Il'>USSION DECISIONS Findings 25~'. T. C. the sheeting appear similar to mortar lines upon a completely in· stalled ceramic surface.

PAR. 3. Many experts, including prominent architects, tile manufacturers, tile contractors, tile jobbers, professors o£ ceramic, structural engineers, architectural and structural standardists and contractors, testified, and the Commission finds it to be a fact, that the word ~tile" when standing alone means or connotes a baked day or Ceramic noduct j further, tliat"'th1'\"'ternt -efi}e'5 stanilrn( lt Olle ,c..>-not hase_Q....b~companies.~ the word "ceramic" to denote.' ~au By the use o£ the wor t1 e" alone a c~e..J.S.meant. ere are dift'erenttypes of tiles, or ceramic tiling, such as rooung tiles, hollow tiles, drain tiles, and decorative wall tiles. The t~i~Lused in conjunction with some _?~r word or words, descriptive of the.materjal or substance of which the product is com· posed, means or connotes not a brtked clay or cerurn1c product, but n prw.luc.u:nanl!f~~l:t@ fromtT1e' otf~(.tn~tePJ1Lor,..!iubstance em~ ployed. Examples o£ tiils are rubber tile, asbestos tile, cork tile, wood tile, tin tile, glass tile, and cement tile. These various products have been so known to the building trade and to a portion of thr general public £or a number ot years. Several experts and other:;, including prominent architects, manufactnrrrs, building contractors, jobbers, and members of the general purchasing public, testified that the word "tile" when standing alone meant nothing to them, and they had to be informed of the substance of which the tile was made. The Govemment o£ the United Stutes, through the Procurement Department of the Treasury, in asking for bids on public buildings, includes in its specifications references to various products under the designations of cork tile, rubber tile, linoleum tile, ~stical ti.!!J and others. ' · PAn. 4. Respondent, in the com·se a11d cowluct of its busim~:;s 1tS aforesaid, in extensive advertising of its products, uses the mune "Temprtile." The aforesaid designation, when used alone by respondent as descriptive of or as a designation for its products, luts the tendency nnd capacity to mislead and dect•ive a substantial portion of the purchasing public into the belie£ that the products so described at·c mannfadured from baked clay, all of which is to the damage and injury of said purchasing public, ;wd tends to and does divert trade flom competitors of respondent, who numufacture nnd sell tilt• pro- (lucts manufactmed from baked clay.

PAu. 5. The designation and description by respoJHlPnt of its prod· ucts lls "Temprtile" as heretofore described, is decepti\'e and luislPIHling and has the capacity and tendency to deceh·e purchasers of THE MASONITE CORPORATION 1327 1320 Order said product into the belief that said products are manufactured from baked clay.

CO:SCLUSION The aforesaid acts un<l practices of the respondent, The Masonite Corporation, are to the prejudice of the public and of respondent'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 nnd duties, and for other purposes."

Older '1'0 CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent, testimony and other evidence taken before John J. Keenan, ~n examiner of the Commission theretofore duly designated by it, Ill support of the allegations of said complaint and in opposition therdo, no briefs being filed and oral argument not having been l·eque!:ltetl and the Commis"ion having made its finrlings 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 Felleral Trade Commission, to define its powers and duties, and for other purpo:;es."

It i& ordel·ed, That the respondent The Masonite Corporation, a corporation its officers, representatives, agents, and employees, in connection with the offering for sale, sale and distribution of its Wall board and wall coverin(r in interstate commerce or in the District of Columbia, do forthwith cease and desist from representing: 1. Directly or indirectly, by the use of the words, "Temprtile" or "t~le'' that its prollucts are "tile" unless in immediate conjunction Wit}). the words "Temprtile" or "tile" wherever used, in the same conspicuous type, ther·e appear a word or words designating the l~aterial or substance of which the products are made, such as wood t~le, glass tile, rubber til(', asbestos tile, copper tile, cork tile, or metal hie.

It is further ordered, That the respondent shall, within 90 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 ordet'.

Syllabus 25F. T. C.