Colonial Knife Co., Inc

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IN THE Matrer OF COLONIAL KNIFE COMPANY, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tlle ALLEGED VIOLATION OF SEC. 5 OF AN .ACT OF COliOGRESS APPROVED SEPT. 26, 1914 Docket 4116. Complaint, Apr. 26, 1940-Decision, Feb. 5, 19.tJ Where a corporation engaged in manufacture of various articles of cutlery, including knife of certain geneml design and appearance, and in offer and interstate sale thereof- Designated and marked as "Scout" knife its aforesaid product, notwithstanding fact knife in question was not one of those long made or distributed under supervision of the Boy Scouts of America, nor approved, Indorsed, or sponsored 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 understood as thus identifying and referring to such equipment and activities of organization ln 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 organization and was a part of the standard equipment that·eof, for the pm·chase 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 sft 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.

llfr. Fmnc-is 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 Colonial Knife Company, 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:

COLONIAL KNIFE CO., I~C. 667 666 Complaint PARAGRAPH 1. Respondent, Colonial Knife Co., Inc., is a corporation organized and existing under and by virtue of the laws of the State of Rhode Island, with its principal office and place of business located at 287 Oak 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 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.

PAn. 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, 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 licensing and otherwise 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 designated and marked, and the activities of the boy members of the organization have been uniformly referred to, by usc of the words "Boy Scout," "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 1lncl distribution is so supervised is a pocket knife of a design ann 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 Findings 32F.T.C.

other marks and insignia identifying it as a part of the standar·d equipment of the Boy Scouts o£ America.

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 "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 l:een and is approved, endorsed, or sponsored by the Boy Scouts oE 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 belie£. PAR. 5. In truth and in fact, respondent's said knife has not been and is not manufactured or distributed under the ~upervision of thie Doy Scouts of America, has not been and is not approved, endorsed Qr sponsored by that organization, nor is it a part of its standard <'quipment.

PAR, 6. There is a marked preference on the part of a substantial portion o£ 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.

PAR. 7. The aforesaid acts and practices of respondent as herein alleged are all to the prejudice and injury of the public and con- Btitute 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 ORDER fursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on April26, 1940, issued and on April 29, 1940, served its complaint in this proceeding upon respondent, Colonial Knife Co., Inc., charging 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 permission 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 procedure and further hearing as to said facts, which substitute nnswer was duly filed in the office of the Commb~ion. Thereafter, this proceeding regularly came on for final !waring before the Commission COLONIAL KNIFE CO., INC. 669 666 Findings on the said comphtint and substitute answer; and the Commission, having duly considered the matter and being now fully advised in the premises, finds tha~ 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, Colonial Knife Co., Inc., is a corporation organized and existing under and by virtue of the laws of the State of Rhode Island, with its principal office and place of business located at 287 Oak 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 :t "Scout" knife. Respondent causes its said products, when sold, to be transported from its place of business in the State of Hhode 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 ob::;ervation, 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, 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 licensing and otherwise authorizing those with whom it would enter into arrangements for such manufacture and distribution. Fr;om the beginning the equipment so approved and sponsored has been designated and marked, and tlw activities of the boy members of the organization have been unifmmly 1·eferred to, by use of the words "Boy Scout," "Scout," and "Scouting," so that these 32!!6!l5m-4J-\'OL. 32-43 670 FEDERAL TRADE r;QMMISSION DECISIONS Order 32F.T.C.

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 ami 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. PAR. 4. The knife manufactured and sold by respondent~ as 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 "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 lloy Scouts of America and is a part of the standard equipment of that organization; and to cause, and has caus('d, a substantial part of the public to purchase respondent's said knife because of such belief. PAR. 5. In truth an<l in fact, respondent's said knife has not been and is not manufactured or distributed under the supervision of 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 o\·er products which~t 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 aile- COLONIAL KNIFE CO., INC. 671 666 Order gations of fact set forth in said complaint, and states that it waives all intervening procedure and further hearing as to the said facts, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That respondent, Colonial 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 o£ 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 America, 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.