Parfums D'Isabey, Inc., Les

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF I•' LES PARFUMS D'ISABEY, INC. ,I COMPLAINT, FINDINGS, .AND ORDER IN REGARD TO THE .ALLEGED VIOLATION OF SEC. II OF .AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 l, Docket 81.q.9. Complaint, June 11, 1931-Deci$ion, Feb. 19, 1988 Where a corporation engaged in sale and distribution of toilet water and per· fumes, compounded in the United States through blending with alcohol vehicle, perfume concentrate, imported as such, or made, by company from Which It purchased, from the essential oil or :flower essence, aromatic chemicals, and animal products imported by such companyltepresented, through use of such words as "Isabey Parfums disobey, Parfums disobey 'lsabey-Paris'," on labels attached to containers and cartons of its said products, that same were made or compounded in France, notwith· standing fact Its said perfumes, purchased by it as above set forth, were, as aforesaid, actually compounded in the United States and were not products made or compounded In France or in any other foreign count,ry, or imported;

With effect of misleading and deceiving a substantial part of purchasing public into erroneous and mistaken belief that said representations were true, and that perfumes in question were imported into United States from Paris, France, and with result that public, acting under mistaken and erroneous beliefs induced by such false, deceptive, and misleading statements and representations, purchased substantial volume of its said products as and for the preferred imported, and particularly preferred French, perfumes, and trade was unfairly diverted to it from competitors engaged In manufacture and distribution, or in sale and distribution, of perfumes who truthfully describe their products and represent country or source or origin thereof; to the substantial injury of competition in commerce: lield, That such acts and practices were to the prejudice of the public and com· Petitors and constituted unfair methods of competition. Before Mr. William 0. Reeves, trial examiner. Mr. S. Brogdyne Teu, /1 for the Commission . .Mr. John H. Glaccwm of Munn, Anderson & Liddy, of New York City, for respondent.

COlli PLAINT Pursuant to the provisions of an Act of Congress, approved S~ptember 26, 1914, entitled "An Act to create a Federal Trade Com- ~Ission, to define its powers and duties, and for other purposes," the federal Trade Commission, having reason to believe that Les Par· r' ,,' ?tns disobey, Inc., a corporation, organized and doing business by i VIrtue of and under the laws of the State of New York, hereinafter ;, i::referred to as respondent, has been, and is now, using unfair methods 800 FEDERAL TRADE COl\Il\IISSION DECISIONS Complaint 261!'. T. C. of competition in commerce, as "commerce" is defined in the said Act of Congress, and it appearing to said Commission that a proceed· ing by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PAR. 1. Respondent Les Parfums disobey, Inc., is a New York corporation, having its principal office and place of business located at 312 East Thirty-second Street, city of New York, State of New York. The respondent has been for more than 1 year last past (>ngaged in the sale and distribution of perfumes to retail dealers purchasing for resale. In the course and conduct 1 of its business respondent offers said products for sale and sells the same in commerce between the State of New York and the :Several States of the United States and in the District of Columbia. 'Vhen the said products are sold, respondent transports or causes the same to be transported from its place of business in the State of New York to purchasers thereof located in the States of the 1 United States other than the iState of New York and in the District of Columbia. There has been for more than one year last past, and still is, a constant current of trade and commerce in said products so sold by respondent between and among the various States of the United States and in the District of Columbia. P .AR. 2. Respondent is now, and for more than 1 year last past has been, engaged in substantial competition with other individuals, firms, partnerships, and corporations engaged in the manufacture, sale, and distribution of, or in the sale and distribution of, like and similar products in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. Respondent in soliciting the sale of and in selling its }Jroducts, and for the purpose of creating a demand on the part of the consuming public for said commodities, has advertised its c01n· modities through the media of price lists and other printed matter published, issued, and circulated through the United States mails to its customers and prospective customers located in the various States of the United States and in the District of Columbia. In the aforesaid ways and by the aforesaid means the respondent makes and has made to the general public false and misleading state· ments with reference to the commodities offered for sale by it. P .AR. 4. The said price lists and other printed matter published and distributed by respondent ns aforesaid contain misleading descriptions and representations concerning its products. For example, certain of the perfumes have printed on the carton thereof or on the labels thereof the following words and phrases:

Isabey parfums disobey, parfums disobey Isabey-Paris II II LES PARFU.MS D'ISABEY, INC. 801 799 Complaint I While on the bottle or container of the perfume appear these words- "le muguet isabey." I!I The aforementioned representations and descriptions in the French 1,! language appearing on the aforesaid articles and their containers I [Iserve to lead the purchasers and prospective purchasers into the erroneous and mistaken belief that the conunodities so described and referred to are manufactured in France.

PAR. 5. For many years a substantial part of the consuming public has had, and still has, and pas so expressed, a marked preference for Perfumes which are manufactured or compounded in foreign countries, esl)ecially in France, and then imported into the United States. I ~· PAn. 6. In truth and in fact, the aforesaid articles are not manu- ~factured in France or any other foreign country, but are domestic l Products made or compounded in the United States. PA.n. 7. There are among the competitors of the respondent manufacturers and distributors of like and similar products who truthfully 11.dvertise and represent the nature, merit, and origin of their respective products. There are also among the competitors of respondent 111anufacturers and distributors of like and similar products who J ,,'·refrain from advertising or representing through their price lists and 1 other printed matter that the merchandise offered for sale by them 1/, has a value, merit, or origin that it does not have. 1)• I . PAR. 8. The effect of the foregoing false and misleading representa- .li' !tons and acts of the respondent in selling and offering for sale such !' ltenJs of merchandise as hereinbefore referred to is to mislead a substantial part of the purchasing and consuming public in the several States of the United States and in the District of Columbia by inducing them to mistakenly believe that the various articles of perfumes ~ereinabove set out and described in paragraph 4 are manufactured ln France and imported from that country into the United States. PAR. 9. The aforesaid false and misleading statements and representations on the part of respondent have induced and still induce a ~llbstantial number of consumer purchasers of said commodities to uy the products offered for sale, sold, and distributed by the respondent on account of the aforesaid erroneous and mistaken belief . .As a result thereof trade has ..been diverted from those competitors of ~spondent engaged in similar bu.sin~s~es referred to in para~raph 7. b 8 a consequence thereof substantial mJury has been and IS bemg done Y respondent to competition in commerce between and among the Variou'3·States of the United States and in the District of O>lumbht. PAR. 10. The aforementioned methods, acts, and practices of respondent are all to the prejudice of the public and of respondent's colnpetitors as hereinabove alleged. Such methods, acts, and prac- TRADE Commission" DECISIONS 802 FEDERAL Findings 26F.T. Cs tices constitute unfair methods of competition in commerce within the intent and 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, FINDINGS AS TO THE FACTS, AND ORDER 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 June 11, 1937, issued, and on June 12, 1937, served its complaint in this proceeding upon respondent Les Parfums disobey, Inc., a 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 S. Brogdyne Teu, II, attorney for the Commission, and in opposition to the allegations of the complaint by John H. Glaccum, attorney for the respondent, before William C. Reeves, an examiner of the Commission, theretofore duly designated by it; and said testimony and evidence was duly recorded and filed in the office of the Com· mission. 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 com· plaint and in opposition thereto (oral argument not having been requested), and the Commission having duly considered the same and being now fully advised in the premises finds that this pro· ceeding is in the interest of the public, and makes this its findings as to the facts and its conclusion drawn therefrom: FINDINGS A·3 TO THE FACTS PARAGRAPH 1. The respondent, Les Parfums disobey, Inc., is 11 corporation organized and doing business under the laws of the State of New York. Its principal office and place of business are at 245 Fifth Avenue, New York, N. Y. Its shipping point is at 318 East Thirty-second Street, New York,~ Y. It is engaged in the sale and distribution of perfume and toilet water. PAR. 2. Respondent's products are distributed from its aforesaid place of business to retailers located throughout the United States. 'Vhen orders are received for respondent's products it causes such products to be shipped from its place of business in New York, N. Y., to the purchasers thereof located at various points in the various LES PARFUMS D'ISABEY, INC, 803 799 Findings States of the United States other than the State of New York. Since the date of its incorporation, 3 or 4 years ago, the resp~nde~t, Les Parfums disobey, Inc., has maintained a course of trade m said products in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. At all times since respondent entered into said business it has been' in substantial competition with other corporations, and With partnerships and individuals engaged in the sale and distribution, or in the manufacture, sale, and distribution of perfumes in commerce among and between the several States of the United States and in the District of Columbia.

' P.an. 4. The respondent has ·advertised and now advertises its products by means of labels attached to the containers and cartons In which respondent's products are packed and sold and by use of Qther means. On the labels appear certain words and phrases pur- Ported to be descriptive of the product and its source or country of Qtigin. The following is representative of the statements an~ representations made on the labels attached to the containers and cartons Qf respondent's products:

Isabey Parfums disobey, Parfums disobey ''Isabey-Parls." AU of the above set out statements and representations appearing Qn the containers and cartons in which respondent's products are Packaged and sold are in the French language . . PAn. 5. The respondent purchases the perfumes which it sells and ,. <hstributes under the false and misleading' labels above described from the George Silver Import Company (;ow Roure-Dupont, Inc.).'I'he George Silver Import Company imports essential oil or flower ' ~ssence, aromatic chemicals, and animal products which are blended irl ! In various proportions depending upon the formula of the specific ,,~· ?dor desired. Sometimes these ingredients are imported separately I! ~n bulk. Sometimes these ingredients are blended before being ltnported. When they are blended, they are referred to in the trade as perfume concentrate. The George Silver Import Company im- Ports either the perfume concentrate already blended in the proper :Proportion for the odors desired or it imports separately the neces- ~ary ingredients of the completed perfume concentrate. After the ~ngredients have been blended so as to form the perfume concentrate, lt is still necessary to compound or blend this concentrate with an alcohol vehicle .

. All of the perfumes purchased by the respondent from the George Silv-er Import Company are actually compounded in the United States. As stated above, in some instances ingredients are imported Conclusion 2G F. T.C. separately, then blended, so as to form perfume concentrate, and subsequently compounded with the alcohol vehicle. In other in~ stances, the perfume concentrate made up of the same ingredients which are sometimes imported separately is imported and subse~ quently compounded with the alcohol vehicle. Perfume concentrate as made up of the various ingredients before the addition of the alcohol vehicle is not ready for use as a perfume by members of the general purchasing public and cannot satisfactorily be used for such purpose. A perfume concentrate is not a perfume within the generally understood meaning of that term as used by the- purchasing public. A perfume, as that term is understood by the public generally and by the trade, is a compound of a perfume concentrate and an alcohol vehicle. A perfume is not made or compoundell until the alcohol or other agent of application has been united with the concentrate.

The Commission finds that there exists in the minds of the pur~ chasing public a preference :for imported perfumes and a particular preference for perfumes made in and imported from France. PAR. 6. The use by respondent of the statements arid representations, as set out hereinabove, in which its products are packaged and sold has had and now has the capacity and tendency to and does mislead and deceive a substantial part of the purchasing public into the erroneous and mistaken belief that said representations are true and that the said perfume is imported into the United States from Paris, France.

Acting under the mistaken and erroneous beliefs inducecl by the fa]sl', deceptive and misleading statements and representations hen•in re· ferred to, the public has purchased a substantial volume of responll· ent's products, with the result that trade has been unfairly diverted to the respondent from its competitors engaged in the manufacture and distribution, or in the sale and distribution of perfumes, who truthfully describe said perfume and truthfully represent the country or source of origin of their products. As a consequence thereof, substantial injury has been and is being done by respondents to com· petition in commerce between and among the various States of the United States and in the District of Columbia. CONCLUSION The aforesaid acts and practices of the respondent, Les Parfmns disobey, Inc., are to the prejudice o:f the public and respondent's competitors, and constitute unfair methods of competition in conl-· merce within the intent and meaning of Section 5 of the Act of Coal- LES PARFUMS D'ISABEY1 INC. 805 199 Order gress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for ()ther purposes."

ORDER TO OEASE AND DESIST :n~is proceeding having been heard by the. Federal Trade Comlllisswn upon the complaint of the Commission, the answer of respondent, testimony and other evidence taken before "William C. Reeves, an examiner of the Commission, theretofore duly designated ~y it, in support of the allegations of said complaint and in opposition thereto, and briefs filed herein and oral argument having been requested, and the Commission having made its findings as to the :f~cts and its conclusion that said respondent has violated 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."

It is ordered, That respondent, Les Parfums disobey, Inc., a cor- Poration, its officers, representatives, agents, and employees, 'in con- ~le~tion with the offering for sale, sale, and distribution of perfumes 111 Interstate commerce, or in the District of Columbia, do forthwith ~ease and desist from directly or through implication: Representing, through the use of such words as "Les Parfums disobey ," or through the use of any foreign words or phrases, or through any other means or device, or in any manner, that perfumes compounded, bottled, and packaged in the United States are made ?r compounded in France or in any other foreign country, or are lin ported.

It is fwrther ordered, That the respondent shall, within 60 days ~after service upon it of this order, file with the Commission a report ~11 Writing setting forth in detail the manner and form in which it as complied with this order.

Complaint 26F.T.C.