Imperial Knife Co., Inc

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IN THE MA 'ITER OF IMPERIAL KNIFE COMPANY, INC.

COllfPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC, 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4115. Complaint, Apr. 26, 1940-Decision, Feb. 5, 1941 Where a corporation engaged in manufacture of various articles of cutlery, including knife of certain general design and appearance, and in offer and interstate sale thereof- Designated and marked as "Scout" knife its aforesaid prouuct, notwithstanding !act knife in question was not one of those long made or distributed under supervision of the Boy Scouts of America, nor approved, indorsed, or spon· sored by that organization, and uniformly referred to as "Scout Knife" and marked in some form or manner with words "Scout" or "Boy Scout." with or without other marks and insignia identifying it as a part of the standard equipment of the Boy Scouts of America, and as such, uniformly referred to by use of such words as "Boy Scout," "Scout,'' and "Scouting," long under· stood as thus identifying and referring to such equipment anu activities of organization in question;

With capacity and tendency to mislead and deceive purchasing public into belief that its said knife had been approved, indorsed, or sponsored by said organiza· tion and was a part of the standard equipment thereof, for the purchase of which, as products sponsored or approved by such organization, there is a marked preference on the part of substantial portion of purchasing public over products which are not so sponsored or approved, and with effect of causing substantial part of public to purchase its said knife because of such belief:

Held, That such acts and practices under the circumstances set forth were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce.

Mr. Joseph 0. Fehr for the Commission.

Mr. Fmncis J. Fazzano, of Providence, R.I., for respondent. Complaint Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that Imperial Knife Co., Inc., a corporation, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the 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. Respondent, Imperial Knife Co., Inc., is a corpora· t.ion, organized and existing under and by virtue of the laws of the IMPERIAL KNIFE CO., INC. 661 660 Complaint State of Rhode Island, with its principal office and place of business located at 14 Blount Street, in the city of Providence, in the State of Rhode Island.

PAR. 2. Respondent is now, and for more than 1 year last past has been, engaged in manufacturing, offering for sale, aml selling various articles of cutlery, among other things a pocket knife designated and marked as a "Scout" knife. Respondent causes its said products, when sold, to be transported from its place of business in the State of Rhode Island to the purchasers thereof located in States of the United States other than the State of Rhode Island, and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said products in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In 1910 an organization known as The Boy Scouts of America was incorporated under the laws governing the District of Columbia, and later was reincorporated by special act of Congress. Its purpose was, in general, to organize the boys of the United States and teach them discipline, patriotism, courage, habits of observation, self-control, and ability to care for themselves in all exigencies of life. In furtherance of this purpose and both to attract the boys of the Nation to the movement and to insure safe, adequate, and adaptable equipment tlle organization adopted, and has since maintained, the policy of devising and planning a great many articles of equipment and supervising their manufacture and distribution through licensing a.nd otlwrwise authorizing those with whom it would enter into arrangements for such manufacture and distribution. From the beginning the equipment so approved and sponsored has been de::ngnated and marked, and the activities of the boy members of the organization have been uniformly referrrd to, by use of the words "Boy Scouts," "Scout," and "Scouting," so that these words have long ago acquired a secondary meaning as referring to the equipment and activities of The Boy Scouts of America. Among the articles of equipment so devised and whose production and distribution is so supervised is a pocket knife of a design and of material and workmanship suitable for the outdoor activities of the boy members of the organization. This knife has been unifonnly referred to as a "Scout Knife,'' has been marked in some form or manner with the words "Scout'' or "Boy Scout," with or without other marks and insignia identifying it as a part of th" standard equipment of Tile Boy Scouts of America.

Findings 32F.T.C.

PAR. 4. The knife manufactured and sold by respondent, as alleged and described in paragraph 2 hereof, has been and is of such general design and appearance as, when marked or labeled by the use of the words "Scout" or "lloy Scout" or any other marks or insignia characteristic of, cr identifying it with, The Boy Scouts of America, would have, has had, and has the capacity and tendency to induce the purchasing public to believe that respondent's said knife has been and is approved, endorsed, or sponsored by The Boy Scouts of America and is a part of the standard equipment of that organization; and to cause, and has caused, a substantial part of the public to purchase respondent's said knife because of such belief. PAR. 5. In truth and in fact, respondent's said knife has not been and is not manufactured or distributed under the supervision of The lloy Scouts of America, has not been and is not approvedj endorsed, or sponsored by that organization, nor is it a part of its standard equipment.

PAR. 6. There is a marked preference on the part of a substantial portion of the purchasing public for products which are sponsored or approved by The Boy Scouts o£ America over products which are not so sponsored or approved.

P.-\R. 7. The aforesaid acts and practices of respondent as herein alleged are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS As TO THE Facts, AND Onder Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on April 26, 1940, issued and on April 29, 1940, served its complaint in this proceeding upon respondent, Imperial Knife Co., Inc., charp::ing it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer, the Commission, by order entered herein, granted respondent's motion for per.mission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening proceU.ure and further hearing as to said facts, 'which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding r<>gularly came on for final hearing before the Commission on the said complaint and substitute answer, and the Commission, having duly consider<>d the matter and being now fully ~ldvised in the prern· IMPERIAL KNIFE CO., INC. 663 660 Findings ises, 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 THE FACTS PARAGRAPH 1. Respondent, Imperial Knife Co., Inc., is a corporation, organized and existing under and by virtue of the laws of the State of Hhode Island, with its principal office •md place of business located at 14 Blount Street, in the city of Providence, in the State of Rhode Island.

PAR. 2. Respondent is now, and for more than 1 year last past has been, engaged in manufacturing, offering for sale, and selling various articles of cutlery, among other things, a pocket knife designated and :marked as a "Scout" knife. Respondent causes its said products, When sold, to be transported from its place of business in the Stato of Rhode Island to the purchasers thereof located in States of the United States other than the State of Rhode Island and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said products in com- :rnerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In 1910 an organization known as the Boy Scouts of A.america was incorporah•d under the laws governing the District of Columbia, and later was reincorporated by special act of Congress. Its purpose was, in general, to organize the boys of the United States und teach them discipline, patriotism, courage, habits of observation, ~elf-control, and ability to care for themselves in all exigencies of life.

In furtherance of this purpose and both to attract the boys of the N"ation to the movement and to insure safe, adequate', and rrdaptable equipment the organization adopted, and has since maintained, the Policy of devising and planning a great many articles of equipment and supervising their manufacture and distribution through licensmg and otherwise authorizing those with whom it y.;ould enter into arrangements for such manufacture and distribution. From the. bE>ginning the equipment so approved and sponsored has been designated and marked, and the activities of the boy members of the organization have been uniformly referred to, by use of the Words "Boy Scout," "Scout," and "Scouting," so that these words have long ago acquired a secondary meaning us referring to the equipment and activities of the Boy Scouts of America. Among the. articles of equipment so devised and whose production and distribution is so supervised is a pocket knife of a design and Order 32F.T.C.

of material and workmanship suitable for the outdoor activities of the boy members of the organization. This knife has been uniformly referred to as a "Scout Knife," has been marked in some form or manner with the words "Scout" or "Boy Scout," with or without other marks and insignia identifying it as a part of the standard equipment of the Boy Scouts of America.

PAn. 4. The knife manufactured and sold by respondent, as de- !;cribed in paragraph 2 hereof, has been and is of such general design and appearance as, when marked or labeled by the use of the worda "Scout" or "Boy Scout" or any other marks or insignia characteristic of, or identifying it with, the Boy Scouts of America, would have, has had, and has the capacity and tendency to induce the purchasing public to believe that respondent's said knife has been and is approved, endorsed, or sponsored by the Boy Scouts of America and is a part of the standard equipment of that organization; and to cause, and has caused, a substantial part of the public to purchase respondent's said knife because of such belief.

PAn. 5. In truth and in fact, respondent's said knife has not been and is not manufactured or distributed under the supervision o:f the Boy Scouts of America, has not been and! is not approved, endorsed, or sponsored by that organization, nor is it a part of its standard equipment.

PAR. 6. There is a marked preference on the part of a substantial portion of the purchasing public for products which are sponsored or approved by the Boy Scouts of.America over products which are not so sponsored or approved.

CONCLUSION The aforesaid acts and practices of respondent as herein found are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of respondent, in which answer respondent admits all the material allegations of fact set forth in said complaint, and states that it waives aU intervening procedure and further hearing as to the said facts, and the Commission having made its findings as to the facts and its IMPERIAL KNIFE CO., INC. 665 660 Order conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That respondent, Imperial Knife Co., Inc., a corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of its knives in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

Using the word "Scout" or any other word or words of similar import or meaning, to designate, describe, or refer to respondent's knives, or otherwise representing that said knives are sponsored, endorsed, or approved by the organization known as the Boy Scouts of AmeJ"ica, or that said knives form a part of the equipment of the members of" said organization.

It is further ordered, That the respondent 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.

Complaint 32F.T.C.