Standard Wall Coveiung Co., Inc

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IN THE MA'f'fl<:R OF STANDARD WALL COVERING COMPANY, INC.

COMPLAINT, l<'INDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1014 Docket 2"1"13. Complaint, .Apr. 1"1, 1936-Decision, Nov. 6, 1931 Where a corporation dealing, among other things, in interior fiber wall cover• ing, compounded from wood chips and fibers and other substances, under process resulting in a hard durable sheeting or covering upon which were scored or stamped squares resembling, when painted or lacquered by it with different color from remainder of the sheet, mortar lines on a corn· pletely installed cernmic surface, and in selling and distributing, in other States and in the District of Columbia, such products, in competition among others, with many engaged in sale and transportation, as aforesaid, of tile made from clay and baked in kilns and properly thus described and designated, with others who sell and distribute interior wall coverings and various other products, including copper tile, glass tile, wood tile, rubber tile, cork tne, and the like, properly thus designated and described, and with those who sell and distribute wall coverings made from quarried marble and who, as "marble," xn·operly describe their products- (a) Made use of names "Stancotile," "Mono-tile," and "'Vall Tile" as designa· Uons of its said products in extensively advertising same, notwithstanding fact ith said products, thus designated, were not that baked clay or ceramic product connoted, to building trode and general public, by word "tile" standing alone and without qualifying prefix as hereinbefore set forth; with tendency and capacity to mislead and deceive substantial portion of purchasing public, to its damage and injury, into the belief that aforesaid products, thus described, were made from baked clay, and with tendency to and effect of di\·erting trade from competitors who sell and distribute, thus made, tile products; and (b) Made use of name "Mono-Marble" as d!:'signatlon of product made and sold by it as nforesald; with capacity 1111d tendency to nnd effect of mls· leading and deeeiving substantial portion of purchasing public into belief that product thus described was marble; to the damage and injury of said public, and with tendency to and effect of diverting trade from competitors who quarry and finish such substance: Jleld, That such acts and pt·actices were to the prrjudice of the public nnd compt>titors and constituted unfair methods of competition. Defore Air. Oharlfs F. Diggs, Mr. John J. Keenan and Mr. John L. Hornor, trial examiners.

Mr. Alden S. Bradley and Mr. Mortem Nesmith for the Commission.

Dyke d: Schaines, of New York City, for respondent. llines, Reariclc, Dorr & Ilammond, of New York City, for Tile Manufacturers' Assn, Inc., amicus curiae.

STANDARD WALL COVERING CO., INO. 1329 1328 Complaint Complaint Pursuant to the provi::;ions 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 Standard Wall Covering Company, Inc., hereinafter referred to as "re- ~pondent," has been, and is now, using unfair methods of competition In commerce as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public intere.<;t, hereby issues its complaint, stating its charges in that respect as follows :

PARAGRAPH 1. Respondent, Standard 'Vall Covering Company, Inc., is a Delaware corporation, which has. its principal office and place of business at 1819 North 9th Street, in the City of Philadelphia, State of Pennsylvania. Respondent is now, and has been fo.r some time, engaged in the business of manufacturing, distn?uting, and selling, in commerce, as herein set out, a line of int~rior fiber wall coverings designated variously as "Tile," "Stancoble," "Mono-Tile," "'\Vall T' e," and "Mono-Marble. PAR. 2.Tam-tespon ent, being engaged in business as aforesaid, ;auses said fiber wall coverings, when sold, to be transported from Its place of business in the State of Pennsylvania to purchasers thereof located in various points of the States of the United States <•ther than the State from which said shipments are made. Respondent now maintains a constant current of trade in commerce in said fiber wall coverings, manufactured, distributed, and sold by it between and amoiw the various States of the United States and in the District of Colm~bia .

. PAn. 3. In the course aml conduct of said business, respondent 18 now, and has been, in substantial competition with other individ- Uals and with firms and corvorations engaged in the business of lllanufacturing, distributing and selling wall coverings, particularly ~eramic or burned clay tile, and marble, for use as wall coverings, In commerce, among and between the various States of the United ~states and in the District of Columbia. In the course and opera- ~Ion of said business and for the purpose of inducing the purchase of lts said line of wall c:overings, respondent has issued and circulated throughout the various States, and to customers and prospective cu~tomers, advertising folders, and literature. Some of respondent's Satd advertising and literature, so transmitted and circulated by re- Spondent, is intended to convey the impression that respondent's Products are clay tile and marble, respectively, by omitting there- 1330 FEDERAL TRADE COl\11\IISSION l>ECISIONS Complaint 25 F. T. O. from any reference to indicate that its product, which resembles ·tile, is other than burned clay tile, or to indicate that its product which resembles marble is other than marble. The general public preference is for genuine tile and marble, over any substitutes or simulations. Historically "tile" is a ceramic or kiln or oven-baked product of comparatively small sizes to make them amilable both for places and designs. It is so understood in the building trade and by the general public. Respondent's prodnets are neither tile nor marble.

On its letters, bill brads and price lists, respondent states: Originators of oue-pleee tile in 1!308 Originators of one-piece marble in 1932 On its bill heads appear also the following: Mono-Tlle-Tile in Sheets Not a Metal or Cement Mono-Marble On its circulars appears the following:

:::Jtanco One-Piece Tile Nou-llt>tullie A 1\Iouern Wall Tile at a nensonnble (Jost On its retail price lists and some of its circulnrs appears the following:

MONO-TILE: SIZI<~S AND COLOHS - Number field----------1-----------------~r ortar J.fne> 110. _ --- _ --- _ _ _ _ _ ___ __ __ \Vhite ___________________ _ Warm Gray.120. __ ___ _ _ _ _ _ ___ __ _ _ _ __ \Vhite ___________________ _ Chinese Red_ 130. _ --- _ _ --- __ ---. _ \Vhite ___________________ _ Black. 210--------------------- Ivory ___________________ _ Warm Gray. 320310 _____________________ ------------------ OceanNile GreenGreen"---___ ------------______ _ Light Ivory. Olive Green. 410--------------------- Blue ____________________ _ Light Ivory. 510--------------------- Black _________________ _ Light Ivory. 610. ______ ---- _____ ----- Apricot. ________________ _ Light Ivory. - In some of its advertisements appear the following: .:\1ono-Tile l\1ono-l\Iurble • • • for hath, klteht>n Any Interior • '" " WP nrt' manufacturers and contractors of these one-piece wall coverings wblcb ~;lmulate ordinary tlle and 'lire photographic reproduetlons of quarry marbla On some of its circulars appear illustrations in color of Mono· )farble which closely resembles photographs of genuine mottled marble, and are designated as follows:

"Vt'rde," ''Dt'N•he Hose," ''Light Skyros," "Illack and Gold." PAR. 4. There are among respondent's competitors many who mnnufadurr, distribute and sell, for use as interior wall coverings, siUea, burned clay tile, and also marble.

STANDARD WALL COVERING CO., INO. 1331 1.328 Complaint Burned clay tile is ordinarily made and sold in slabs or pieces of comparatively small size, and set in place with cement. Marble, in somewhat larger slabs, is also set in place with mortar or cement. To further simulate tile and marble, respondent has made its the products with a glazed surface with scores and lines of various colors in such manner and at such intervals as to make its said wood fiber products more closely resemble tile slabs with various colored cement between them. Its fiber Mono-Marble slabs are made with a polished marble-like surface, with color schemes which make them resemble genuine marble as closely as an ordinary photographic reproduction.

PAR. 5. Such products so produced, advertised, sold, and shipped by respondent, have the capacity and tend to put the means and P0~V"er into the hands of unscrupulous builders, architects, and speculative builders and dealers to confuse, impose upon aml deceive those Who buy houses and those for whom houses are built, into the belief ~hat when they are buying respondent's wood fiber tile products and l~stallations, they are buying and r<>ceiving silica or burned clay tile products and installations, to the injury of said buying and owning public, and also to the injury of those who mannfactme and s~]]'· in interstate commerce, genuine silica and clay surface tile for Similar purposes in competition with respotHh·nt. Likewise, in tlte p!'odudion, a<lvertising, aJHl distribution of its :product, 1\[ono-Marble, a product glazed and colored to imitate and resemble genuine marble, respondent puts the means and power into the hands of unscrupulous builders, architects, speculative builders and dealers, to confuse, impose upon and deceive those who buy 1tonses and those for whom hom;es are built, into the belief that when they. are buying respondent's Mono-Marble, they are buying and receiving genuine marble or receiving genuine marble installation, to ~he.ir injury, and also to the injury of those who produce and sell, ln Interstate commerce O'enuine marble for similar purposes, in competition with responde;1l The effect of such actions, representations, and dealings of respondent is also to divert to respondent some trade of those who desired and intended to purchase or own genuine tile and marble Products and installations, from competitors who make such genuine Products; and the effect is also to dh·ert to respondent certain trade from those competitors who make nnd sell similar products but Who represent their products truthfully, all to the injury of said competitors.

Findings 25 F. T. C. PAR. 6. The above and foregoing acts, practices, and representa· tions of the respondent have been, and are, all to the prejudice of the public and respondent's competitors as aforesaid, and have beenr and are, unfair methods of competition within the meaning and in· tent of Section 5 of an Act of Congress, approved September 26r 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." REPORT, FIN DIN OS AS TO TIIE FACTs, AND OnoER Pursuant to the provisions of an Act of Congress approved September 26, 1914, entiled "An Act to create a Federal Trade Corn· mission, to define its powers and duties, and for other purposes," the Federal Trade Commission on April17, 1936, issued, and on April20r 1936, serwd its complaint in this proceeding upon respondent, Stand· ard ·wall Covering Company, Inc., 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 sup· port of the allegations of said complaint were introduced by Alden S. Bradley and 1\Iorton Nesmith, attorneys for the Commission, be· fore C. F. Dig-gs, an examiner of the Commission theretofore duly designated by it, and the witnesses for the Commission were cross· examined by Dyke and Sehaines, attorneys for the respondent; and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the respondent, through its attorneys, filed a motion to withdraw the original answer filed on June 1, 1936, and in lieu thereof to substitute its answer annexed to said motion, in which answer respondent admitted all the JlHL" terial allegations of the complaint to be true, and stated that it waived hearin~s on the charges set forth in the said complaint and consented that, without further evitlence or other intervening pro· cedure, the Commission might issue and serve upon it finding-s as to the facts and conclusions and an order to cease and desist from the violations of law charged in the complaint. Thereafter the Commis· sion granted the respondent's motion to withdraw its original an· swer, and received and fileJ respondent's substitute answer. There· after the proceeding regularly came on for final hearing before the Commission on said complaint, substitute answer and the record; and the Commission having duly consitlered the same and being fully ad· vised 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 con· elusion a.rawn therefrom:

STANDARD WALL COVERING CO., INC. 1333 1328 Findings FINDINGS AS TO Tile FAGrS PARAGRAPH 1. The respondent, Standard "\Vall Covering Comp~ny, Inc., is a corporation organized and existing under and by VIrtue of the laws of the State of Delaware, with its principal place of business and office located at 1819 North Ninth Street in the city ?f Philade~phia, State of Pennsylvania. Respondent has been, dur- Ing its entire corporate existence, engaged, among other things, in the. business of seeing and distributing interior fibre wall coverings designated variously as "tile," "Stancotile," "Mono-tile," "'Vall Tile," and "Mono-Marble."- ---- .Respondent, in the course and conduct of its business, has sold, distributed and transported or caused to be transported, its aforesaid products from its place of business in the State of Pennsylvania to purchasers thereof located in various points of the States of the U~ited States other than the State of Pennsylvania, and has maintained a constant current of trade and commerce between and among the various States of the "United Bt~tE>s 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 sale and transportation of tile in commerce between and among the different States of the United States, which tile is manufactured from clay und baked in kilns, whose products are properly described and desiO'nated as tile. There are others who sell and distribute interior w:ll coverings and various other productst such as copper tile, glass tile, wood tile, rubber tile, cork tile, and ~he like, whose products are properly designated and described by s~ch names. There are also competitors of respondent who sell and distribute wall coverings manufactured from quarried marble, who Pro erly describe their products as marble. _PAn.-'2-:--The term "tile," when used alone and not in conjunctionWith other words, is generally understood in the building trade and l ?Y the general public to be a hard clay product which has been baked In .kiins and in its final form shaped into comparatively small-sized units. Tile, as so understood, is compounded from clays and a mixture of c~ays, feldspar, flint, talc, ball clays, prophyllite, aluminum hydroxid, silica, and some chemicals for coloring purposes. The n;aterials are mixrd in various proportions to produce various qualitle~ in the tile. They are mixed in large mixing vats containing agitators, until the mixture of the ceramic materials with the admix- ~ure of water approaches the consistency of a thick soup. Then it 18 put in a filter press, the water being reduced to a certain percent- 1334 FEDERAL TRADE COl\11\IISSION DECISIONS Findings 25 F. '1'. C. age of the total content o£ the materials, and the materials coming from the filter press are dried until they have a moisture content ranging from ten to fifteen pe.recent. 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 percent moisture content and fired in a kiln at a temperature exceeding red heat, which may run from twelve hundred degrees Fahrenheit upward. The purpose of this firing is to harden the ceramic material until it is an impervious, dense, durable mass. 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, the extreme permissible size of the units being about six by t wei re inches, the reason being that the manufacturers of ceramic products are confronted with the fact that clays and mixtures of clays with 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 installrd upon a proper base and set in cement by workmen known as "tile setters." The rer1n "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 \vord "tile," standing alone and without descdpth·e word:0, dates back some four thousand years to the Egyptians, who, according to man's knowledge, were the first to discover the art of molding and baking clay into hard units as above described. There nre sellers anrl distributors however of other woducts designed to be IIS<'tl as interior wall coverings, whose s:m pro uc s are properly designated a11d described ns nittet tile, glass tile, copper tile acoustic · · com osi ion tile, metal tile cement tile, lmoleum tile, wood tile, asphaltum tile, stone 1 e, an t 1e like. 1C:;e products are generally understood in the building trade and by a substantial portion of the general public as being coverings made frolll the substances so indicated by word or words preceding the wonl ~ile."1 The responde11t's products, known ns "Staucotile," "mono-tile," nnd "Wall Tile" are compounded from wood chips and wood fibres and other substances, and siccath·e materials, which are unique, and are STANDARD WALL COVERING CO., INC. 1335 1328 Findings baked in an oven at a high temperature, pressed and tempered, so that the final product is a hard, durable sheeting or covering. These she~ts can be cut in practically any size desired, but the general size ordmarily sold by respondent is three by four feet. The surfaces of these sheetings or coverings known as "Stancotile," "Mono-tile" and "\Vall Tile," are scored or stamped by the manufacturer from Whom respondent purchases, so that lines forming squares are impressed upon the sheets or coverings, and when painted or lacquered by respondent a different color from the remainder of the sheeting appear similar to mortar lines on a completely installed ceramic surface. 'The respondent, after finishing these products, brands and labels them "Stancotile," "Mono-'Tile," or "tV all Tile." "Marble," as generally understood in the building trade and by !he purchasing public, is a natural, one-piece, solid formation which lS quarried out of the earth and cut and finished from the solid mass formation, and is capable of taking a polish. ~ PAn:-::f. Many expei~cluding prominent architecfs, tile manufacturers, tile contractors, tile jobbers, professors of ceramics, structural engineers, architectural and structural standardists, and contractors, tes6fied, and the Commission finds it to be a fact, that the Word "tile'' when standing alone means or connotes a baked clay or ceramic product; further, that the term "tile" standing alone does hot have to be accompanied by the word "ceramic" to denote a ceramic tile. By the use of the word "tile" alone a ceramic tile is meant. 'There are different types of tiles, or ceramic tiling, such as roofing tiles, hollow tiles, drain tiles, awl decorative wall tiles. The term "tile," if used in coujunction with some other word or words, descriptive of the material or substance of which the product is composed, means or connotes nol a baked clay or ceramic product but a product manufactured from the other material or substance employed. Examples of this 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 tho ~general tmblic for a number of years. Several experts and others, ~ncluding prominent architects, manufacturers, building contractors, Jobbers, and members of the general purchasing public, testified that ~he word "tile" when standing alone meant nothing to them, and they lad tQ be informed of the substance of which the tile was made. The Government of the United States, 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, acoustical tile, and others. · Ordet· 25F. T. C.

PAn. 4. Respondent, in the course and conduct of its business as aforesaid, in extensive advertising of its products, uses the names ~'tile," "Stancotile," "Mono-tile," and ""\Vall Tile.'' The aforesaid <lesignations, when used alone by respondent as descriptive of or as a designation for its products, have the tendency and capacity to mislead and dece>ive a substantial portion of the purchasing public into the belief that the products so described are manufactured from baked clay, all of which is to the damage and injury of said purchasing public, and tends to and does divert trade from competitors of respondent, who sell and distribute tile products manufactured from baked clay.

The use by the respondent of the words "Mono-Marble" has a tendency and capacity to and does in fact mislead and deceive a substantial portion of the purchasing public into the belief that the product so described is marble, to the damage and injury of the purchasing public, and tends to and does divert trade from com· petitors of respondent who quarry and finish marble. PAn. 5. The designation and description by respondent of its prod· ucts as "tile," "Stancotile," "Mono-tile," and "'Vall Tile," as hereto· fore described, is d<>ceptive and misle>ading, and has the capacity and tendency to deceive purchasers of said products into the belief that said products are manufactured from baked clay. The designation and description by respondent of its product as ''Mono-Marble," as heretofore described, is deceptive and misleading, and has the capacity and tendency to deceive purchasers of said product into the belief that said product is marble, as before described.

CONCLUSION The aforesaid acts and practices of the respondent Standard 'Vall Covering Company, Inc., nre to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competi· tion in commerce, within the intent and meaning of Section 5 of an Act of Congress approved Sept<>mher 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, nnd for other purposes."

OflDEU TO CEASE AND DESIST This proc<>eding having b<>en heard by the Federal Trade Com· mission upon the complaint of the Commission, the answer of re· spondent, testimony and other evidence taken before John J. Keena.n, 1111 examiner of the Commission theretofore duly designated by 1t, in support of the allegations of said complaint and in opposition STANDARD WALL COVERING CO., INC. 1337 1328 Order thereto, no briefs being filed and oral argument not having been requested and the Commission having made its findings as to the f~c.ts and its conclusion that said respondent has violated the pro- VISions of an Act of Congress approved September 26, 1914, entitled, '"An Act to create a Federal Trade Commission, to define its powers ~nd duties, and for other purposes."

It is ordered, That the respondent Standard Wall Covering Company, a corporation, its officers, representatives, agents, and employees, in connection with the offering for sale, sale and distribution of its interior wall coverincrs in interstate commerce or in the District <lf Columbia, do forthwith!::' cease and desist from representing: . 1. Directly or indirectly, by the use of the words "tile," "Stanco- !:!,!e'' and "Mono-tile," that its products are "tile," unless iii immedinte conjunction with the words "tile" "Stancotile" or "Mono-tile" wherever used, in the same conspicuous type, there appear a word or words designativlie material-o(su§stance Q.Lwhich the products a.re"lllacle, such as wood tile, glass tile, rubber tile, asbestos tile, copper ble, cork tile, or metal tile· and t 2. ~directly or indirect!;, by the use of the words "Mono-Marble" hat 1ts products are marble when such is not the fact. It is further ordered, That the respondent shall, within 90 days ~after service upon it of this order, file with the Commission a report ~n writing setting forth in detail, the manner and form in which it as complied with this order.

Syllabus 25F.T.C ..