United States Navy Weekly, Inc.

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IN THE l\'1A TTER OF UNITED STATES NA VY "\VEEI\:LY, INC. ET AL. COMPLAINT, DECISION, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5841, Complaint, Jan. 18, 1951-Decision, May, 1952 Any qualification or explanation of the name "United States Navy Magazine to the effect that a publication so entitled has no official connection with the United States Navy would only contradict rather than qualify the conclusion necessarily attendant upon the use of such name, and wou1cl not eliminate the tendency and capacity of the use of such name to mislead and deceive; Where a pri"mtecorporation, organized for profit, and its two officers, engaged in the publication and in the competitive interstate sale and distribution of their "United States Navy Magazine" and in soliciting advertising therein and selling subscriptions thereto through methods designed to capitalize on the erroneous impression that it was officially connected with the Navy- (a) Represented falsely in their ach"ertising, letters and circulars that said publication was officially connected with or sponsored by the Navy, and that it was owned, edited and published by Nayy personnel; the facts being that, owned and published by said corporation, the magazine was largely carried on by its president, who was its principal stockholder and a retired Navy Chief \Van' ant Otricer, and not by persons on active duty in the Na,y; (b) Represented falsely, as aforesaid, that said publication contained a complete co,erage of Navy news from correspondents on ships at Naval stations, bases and yards, and from .Washington; and (c) Represented, as aforesaid, that said publication had a national office in Washington, D, C, and editorial offices in several other cities of the United States;

The facts being their only editorial office was that of. the said president in Philadelphia; the address given as their national office was only a mailing address; and the other addresses listed were mailing addresses of the offices of free-lance advertising agents authorized to sell advertising space in said magazine;

(d) Falsely represented and implied through use of the name, "United States Navy Magazine" as the title of their publication, that said magazine was an official publication of the United States Navy, notwithstanding affirmative statements therein and elsewhere to the contrary which, by reason of small type in inconspicuous locations and obscure language were of no substantial value in correcting the false impression thereby created; With tendency and capacity to mislead and deceive a substantial portion of the purchasing public into a mistaken belief that their publication was an official publication of the Navy, and that such other representations were true, and into the purchase of said publication or advertising space therein as a result, and thereby to divert to them from their competitors substantial trade in commerce:

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

Complaint 48 F. T. C. Berore M'J'. James A. Purcell hearing examiner. 1111'. Oharles S. Cow and 111.1'. J. F. Walsh ror the Commission. lJfT. Byron lV. Scott or vVashington, D. C., for respondents, COl\fPLA INT Pursuant to the provisions or the Federal Trade Commission Act and by virtue or the authority vested in it by saiel Act, the Federal Trade Commission, having reason to believe that United States Navy Weekly, Inc., a corporation, and George L. Carlin and Ray E. Fenstemaker, individually and as officers or said corporation, hereinarter referred to as respondents, have violated the provisions or said Act and it appearing to the Commission that a proceeding by it in respect thereor would be in the public interest, hereby issues its complaint stating its charges in that respect as rollows : PARAGRAPH 1. Respondent, United States Navy vVeeldy, Inc., is a corporation existing under the laws or the State or Virginia. Respondents, George L. Carlin and Ray E. Fenstemaker are President and Secretary-Treasurer, respectively, or respondent United States. Navy weekly, Tne" and, as such, rormulate, control and direct the policy or said corporate respondent. All or said respondents have an office mailing address at Room 820 National Press Building, 'V ashington, D. C.

Said respondents are now, and Tor more than ten years last past have been, engaged in the publication, sale and distribution or a publication known as United States Navy :Magazine and in the sale or advertising space therein and subscriptions thereto. Respondents cause and have caused said publication to be shipped rrom their place oT business in the District or Columbia or in the State or Pennsylvania to purchasers in States other than the State or Pennsylvania or the District or Columbia and at all times mentioned herein have maintained, and now maintain, a course or trade in said publication in commerce among and between the various States or the United States and in the District or Columbia.

PAR. 2. In the course and conduct or their business as aroresaid respondents have made many statements and representations concerning said business and the nature or the same in newspapers, letter. heads, circulars and other literature. Typical or, but not limited to such statements and representations are the rollowing: United States Navy Magazine, The Flagship of Navy Publications-At your Service Since 1927, Owned, Edited and Published by Naval Personnel " and All the News from Washington-Offici aI-Reliable. Please don t confuse our publication with the so-called service publications owned by civilians. UNITED STATES NAVY WEEKLY, INC. ET AL. 1349 1347 Complaint PAR. 3. The respondents in the manner aforesaid have represented that such publication is an official organ or publication of the United States Navy Department and the same is associated or connected with the United States Navy; that the same is the main publication of the Navy relative to all other publications of the Navy Department; that the said publication is owned, edited and published by naval personnel and that it contains all naval news from 'Yashington of an official and reliable nature.

In truth and in fact, said United States N avy ~1:agazine is in manner connected with the United States Navy Department and is neither owned, edited nor published by naval personnel in that the same is privately owned and operated, and personnel employed in connection therewith is not that of the Uniteel States Navy or the United States Navy Department and is composed of civilians; said publication does not contain all the news from vVashington of an official and reliable nature, bnt only contains a portion of news that has been released by the United States Navy Department to, and available through, all news agencies alike.

PAR. 4. Respondents in the manner aforesaid have also represented that they have publication, editorial and other offices located at various places and have within the times aforesaid included the following: publication offices at-South and Hanover Streets, Pottstown, Pa. 675 N. Broad Street, Philadelphia, Pa.; 642 N. Broad Street, Philadelphia, Pa, ; E. :Maclison Ave. at Holley Street, Clifton Heights, Pa.; ditorial offices at-12 South 12th Street, Philadelphia, Pa. ; and Schaff Building, 15th and Race Streets, Philadelphia, Pa,; 742 Market Street, Room 230, San Francisco, California; 228 'IV est 4th Street Room 305, Los Angeles, California; 1(:ress Building, Room 507, Long Beach, California; and other offices at-1419 North American Buildjng, Philadelphia, Pa. ; Finance Building, Philadelphia, Pa. ; Harry J. Collins, Suite 543, 7th and Liberty Avenues, Pittsburgh, Pa. ; 11017 Cedar, Cleveland 6, Ohio; 424 S. Broadway, Los Angeles, California; 812 Pine Avenue, Room 205, Long Beach, California; 46 Burns Street N. E., vVashington, D. C., and Suite 820, National Press Building, 1Vashington 4, D. C.

Respondents have, in the manner aforesaid, also made statements and representations as follows:

We offer you complete coverage of the ships and stations of the Navy Correspondents on Navy ships, at Naval Stations, Bases and Yards. PAR. 5. Respondents have thereby represented that their business is of such ma.gnitude that it has publication, editorial and other offices Complaint 48 F. T, C, at the places listed, and has coverage of all the ships and stations and has accredited correspondents on all the ships, and at all stations, bases and yards, of the United States Navy.

In truth and in fact, respondents do not have publication offices at the places listed therefor but only have facilities available to saiel respondents for the purpose of publishing any given issue of said publication, United States Navy Magazine, under contract for same. In truth and in fact, respondents do not have offices at some of the addresses listed, and only have mailing addresses thereat. Respond. ents do not have coverage of any nature of most of the ships and sin. tions nor accredited correspondents ?n any of the ships nor at any of the stations, bases or yards, of the United States Navy. PAR. 6. In the course and conduct of said business respondents have also ma.de the following representations and statements on circulars letterheads and in letters addressed to prospective advertisers as follows:

SEND YOUR GREETI:NGS TO THE OFFICERS AND l\len AND PAY HONOR TO THE WORLD'S GREATEST NAVY AND 'TEE FINEST PERSONNEL OF ANY NAVY Send a Message of encouragement and congratulations to the personnel of OUR Navy that has never been licked in battle. PAY THEl\l A TRIBUTE, L EST YOU FOR G E '.r ! NAVY CASUALTY TOTALS (Official Navy Figures as of November 9, 1945) 56,557 Killed 80,264 "\V 624 . Still Missing ounded 8 Picture Cemetery with Crosses Official U. S. Navy Photo.

HONORED, THEY LIE AT REST ON FAR-FLUNG ISLANDS, OR IN THE OCEAN' S ARMS WE SHALL NEVER FORGET' THEY DIED FOR US UNITED STATES NAVY MAGAZINE Owned and Operated by Active, Reserve and Retired Navy Personnel Exclusively! Dedicates its May edition to the memory of our shipmates, the brave and heroic officers and men of the United States Navy killed while engaging the enemy in battle, On this MEMORIAL DAY of 1947, we urge and request you to cooperate with the United States Navy Magazine and send your condolences and sympathy the brave officers and men of the Navy who have battled side by side in the ships and on the stations of the Navy with men who died while engaged in the battle with the enemy.

:/( .;: UNITED STATES NAVY WEEKLY, INC. ET AL. 1351 1347 Complaint NAVY DAY TRIBUTE TO the Heroic Officers and Men of the United States Navy Pay A tribute to the Nayy Day-October 27 Braye Officers and sponsored by the Men of the Navy Navy League of the United States Boost The Morale, Send greetings to the Navy and Honor the Brave officers and Men.

PATRIOTIC NAVY DAY EDITION Pay a Well Desened Tribute to the Brave and Courageous Officers and Men of the United States Nav;y this Navy Day, SHO'V YOUR PATRIOTISlU IN THIS GREAT NAVY DAY EDITION! WE ASK YOU-was it too much to ask your firm to send a message of condolence to men out there who daily give their li"Ves so you civilians may live in comfort, While I was on active (1uty, I would not have believed the indifference that YOU CIVILIANS exhibit to,varc1 the men of the service, 'Vhat a heartless gang you must be, III Might I suggest that when you sell again-sell yourself a heart. PAR. 7. In the manner aforesaid respondents have thereby represented that the placement of an advertisement in said publication United States Navy flfagazine, would thereby inure to the benefit of the advertiser as a tribute and act of patriotism in honor of naval personnel killed in action as well as all naval personnel who have served in the United States Navy, and that the placement of such an advertisement in said publication is definitely an act of patriotism and would be construed as an expression of appreciation by the advertiser of a debt of gratitude to the past and present personnel of the United States Navy; that any person or addressee receiving one of respondent' s solicitations to advertise in said publication, who refuses to place an advertisement in such publication, thereby indicates a lack of patriotism on the part of said recipient and indicates an indifference towards the men in the service.

PAR. 8. In truth and in fact, said publication is privately owned and operated and does not inure to the benefit or credit of the United States Navy Department nor the men in the service of the United States Navy. No part of the proceeds from the advertisements placed in said publication is paid over to any naval organization, society or division of the United States Navy Department, and said business is conducted solely for the benefit and profit of the. stockholders owning the stock in said corporate respondent herein. ,;.

Decision 48F.

PAR. 9. The use by respondents of the nanle, United States Navy l\iagazine, as aforesaid, has hRd and now has the capacity to, and does mislead and deceive members of the purchasing public into the mistaken and erroneous belief that said publication is an official organ or publication of the United States Navy Department and because of such mistaken belief, causes them to purchase advertising space in said magazine, PAR. 10. At all times mentioned herein, respondents, in the course and conduct of their business, have been in actual and substantial competition with other corporations and individuals and .with firms and partnerships likewise engaged in the publication of magazines; in the sale of subscriptions thereto, of advertising therein and in the distribution thereof in commerce between and among the various States of the United States and in the District of Columbia, PAR. 11. The use by respondents of the aforesaid acts and practices in connection with the sale and the, offering for sale of their said publication in commerce as described herein, has had, and now has, a tendency and capacity to, and does, mislead and deceive a substantial portion of the purchasing public into the belief that the abovedescribed representations are true. As a consequence of such en' oneous and mistaken beliefs, as herein set forth, the purchasing public has been induced to purchase and has purchased substantial quantities of advertising in said publication and subscriptions to said publication with the result that trade has been unfairly diverted from competitors of respondents.

PAR. 12. The aforesaid acts and practices of the respondents, as herein alleged, are all to the prejudice and injury of the public and to respondents' competitors and constitute unfair and deceptive acts and practices in commerce and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. DECISION OF THE CO~IMISSION AND ORDER TO FILE REPORT OF COMPLIANOE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission, on January 18, 1951, issued and subsequently served its complaint in this proceeding upon respondents United States Navy Weekly, Inc., a corporation, and George L. Carlin and Ray E. Fenstemaker, individually and as officers of said respondent corporation, charging them with the use of unfair and deceptive acts and practices in commerce and unfair methods of competition in commerce in violation of the provisions of said Act. After the issuance of said complaint and the :filing of respondents' answer thereto, hearings were held at which testimony and other evidence in UNITED STATES NAVY WEEKLY, INC. ET AL. 1353 1347 Findings support of and in 'Opposition to the allegations of said complaint were introduced before a hearing examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final consideration by said hearing examiner on the complaint, the answer thereto, testimony and other vidence, and proposed findings as to the facts and conclusions presented by counsel, and said hearing examiner, on 1\1:ay 31, 1951, filed his initial decision.

"Within the time permitted by the Commission s Rules of Practice counsel for respondents filed with the Commission an appeal from said initial decision, and thereafter this proceeding regularly came on for final consideration by the Commission upon the record herein including briefs in support of and in opposition to said appeal and oral argument of counsel; and the Commission, having issued its order granting said appeal in part and denying it in part and being now 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 conclusion drawn therefrom and order, the sameto be in lieu of the initial decision of the hearing examiner.

FINDINGS AS TO THE FACTS PARAGR.~PH 1. Respondent, United States Navy ",Veekly, Inp., is a corporation existing under the laws of the State of Virginia. Respondents, George L. Carlin and Ray E. Fenstemaker, are President and . Secretary-Treasurer, respectively, of respondent United States Navy 1Veeldy, Inc., and, as such, formnlate, control and direct the policy of said corporate respondent. All of said respondents have an office mailing address at Room 820, National Press Building, 1Vashington D. C. The permanent address of respondent Carlin is 4749 North Thirteenth Street, Philadelphia, Pennsylvania. Respondent Carlin maintains an editorial office for respondent United States Navy Weekly, Inc., at 12 South 12th Street, Philadelphia, Pennsylvania. Said respondents are now, and for many years last past have been engaged in the publication, sale and distribution of a magazine named United States N avy ~fagazine " and in the sale of advertising space therein, in commerce. Respondents cause said publication to be shipped from the State of Pennsylvania to purchasers thereof in States other than the State of Pennsylvania, and at all times mentioned herein have maintained, and now maintain, a course of trade in said publication in commerce among and between the various States of the United States and in the District of Columbia. At all times mentioned herein, respondents have been in actual and substantial Findings 48 F. T, C. competition with others engaged in the publication and circulation or magazines, and in the sale or subscriptions thereto and or advertising therein, in commerce between the various States or the United States and in the District or Columbia.

PAll. 2. In the course and conduct or their business, as aroresaid respondents have made the rollowing representations in their magazine and in letters and circulars sent to prospective advertisers in their magazine:

The FLAGSHIP of NAVY Publications- At Your Service Since 1927 O\VNED, EDITED AND PUBLISHED BY NAVY PERSONNEL Please don t confuse our publication with the ordinary so-called service publications owned by civilians, PAR. 3. By the use or the above set out statements respondents have represented that their magazine is an official publication or the United States Navy and that it is owned, edited and published by persons on active duty with the United States Navy. PAll. 4. In ract respondent United States Navy ,YeeleIy, Inc., which owns and publishes the magazine United States N avy ~Iagazine, is a private corporation organized ror profit. This corporation is not connected in any manner with, nor is its magazine an official publication of, or sponsored or endorsed by, the United States Navy or the United States Navy Department or any branch or division thereor. Nor is this magazine owned, edited or published by persons on active duty with the United States Navy. The actual editing and publishing work has largely been carried on by respondent George L. Carlin, a retired United States Navy Chier "Tarrant Officer, who is the principal stockholder in respondent corporation. His activities in connection with this magazine have been carried on by him while in an inactive retired Navy status.

PAR. 5. In the course and conduct or their business, as aroresaid respondents have also made the rollowing representations in their magazine and in letters and circulars sent to prospective advertisers in their magazine:

Correspondents on Navy ships, at Naval stations, bases and yards.

"Te offer you complete coverage of the ships and statjons of the Navy.

All the news from Washington Official- Reliable, Respondents have also stated in their said publication that they maintain a national office in "\Vashington, D. C., and editorial offices UNITED STATES NAVY WEEKLY, INC. ET AL. 1355 1347 Findings in several other cities of the United States. The cities in which these editorial offices have been represented as being located have varied from time to time. Typical of such representations was respondents listing of addresses in Philadelphia, Pennsylvania, San Francisco Los Angeles and Long Beach, California, in one issue of their magazine under the heading "Editorial Offices.

PAR. 6. By the use of the above set out statements the respondents have represented that they maintain a large business organization with a national office in ,iT ashington, D. C" and with several editorial offiees located in various other cities of the United States, and that their publication contains a thorough coverage of the Navy news from \Yashington, D, C., and from the Navy s ships, stations, bases and yards.

PAR. 7. In fact respondents' business is very small. Their entire paid staff consists of respondent Carlin. Their only editorial office is that of respondent Carlin, whose office is nOlV, and during the period of time in which the representations as to the editorial oflice hereinabove referred to were made has been, located in Philadelphia Pennsylvania. The address given as respondents' national office is only a mailing address from which mail is forwarded to respondent Carlin, The addresses listed as editorial offices, other than in Philadelphia, are in fact either mailing addresses or the offices of free. lance advertising agents authorized to sell advertising space in respondents' magazine.

Respondents' magazine is presently published once every two months and has a total circulation of 2 500 copies per issue, Their Navy news sources, other than those contacts made by respondent Carlin personally, are limited to official news releases issued by the N ayy Department, greetings and messages solicited from high-ranking Naval officers and special articles contributed gratuitously or on a fixed columnar basis by Navy personnel from time to time. They do not have or publish a fun and complete coverage of the Navy news from ",Yashington, D. C., or from the Navy ships, stations, bases and yards.

PAR. 8. The name "United States Navy l\1agazine " used by respondents as the title for their magazine, implies that the publication is an official publication of the United States Navy. Respondents have affirmatively stated both in said publication and in their letters and circulars soliciting advertising that said publication was not owned by the United States N ayy. However, such denials when made in said publication were made in such small type and in such inconspicuous locations and when made in advertising circulars usually were made in such obscure language, that such denials were not of ..

1356 FEDERAL TRADE COMMISSION DECISIO~S Conclusion 48 F, T, C.

any substantial value in eliminating the tendency and capacity of the use of said name to create the impression that said publication is official publication of the United States Navy. Respondents' methods of soliciting advertisements and of selling subscriptions to said publication are designed to capitalize on the erroneous belief that their publication is officially connected with the United States Navy. Practically all or the advertisements solicited and published by respondents are in the form of greetings or tributes by the advertisers to the men of the United States Navy. These advertisements are solicited through appeals to the patriotisIn of the prospective advertiser and to his gratitude to the men of the United States Navy. Respondents also solicit subscriptions for their magazine to be sent to Naval and Veterans hospitals, by similar methods.

PAR. 9. The use by the respondents of the name "United ShLtes N avy lVlagazine~' as the title of their publication, and the use of the re-. false, misleading and deceptive statements and representations, fen' ed to in Paragraphs Two, Three, Five and Six of these finding~ has had and now has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondents' publication is an official publication of the United States Navy and that such statements and representations are true, and into the purchase of said publication or advertising B w space therein as a result of such erroneous and mistaken beliefs. reason of the erroneous and mistaken beliefs so engendered, the use of the name "United States Navy :Magazine" as the title of respondents' publication and the use of such statements and representations have also had and now have the tendency and capacity to divert to respondents, from their competitors, substantial trade in commerce between and among the various States of the United States and in the District of Columbia.

CONCLUSION 1. The acts and practices of the respondents as herein found are all to the prejudice and injury of the public and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

2. Any qualification or explanation of the name "United States Navy Magazine" to the effect that a publication so entitled has no official connection with the United States Navy would only contradict rather than qualify the conclusion necessarily attendent upon the use of such name. The presence of such contradictory statements would UNITED STATES NAVY WEEKLY, INC. ET AL. 1357 1347 Order not eliminate the tendency and capacity of the use of such name tD mislead and deceive.

ORDER It is ordered That the respondent, United States Navy "\Yeeldy, Inc. a corporation, and its officers, representatives, agents and employees and the individual respondents, George L. Carlin and Ray Fenste- Inaker, and their respective representatives, agents and employees, directly or through any corporate or other device, in connection with the solicitation for the sale of advertising space in, or the offering for sale, sale or distribution of respondents' magazine or any other publication in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Using the name "United States Navy Magazine" as the title of any publication not officially connected with or sponsored by the United States Navy, or using any other title which falsely represents directly or by implication, that the publication so entitled is officially connected with or sponsored by the United States Navy. 2. Representing, directly or by implication: (a) That said publication is officially connected with or sponsored by the United States Navy or the United State~ Navy Department or any of their branches or divisions.

(b) That said publication is owned, edited or published by naval personnel or by anyone acting in other than a civilian capacity. (c) That said publication contains a complete coverage of Navy news from the ships, stations, bases or yards of the United States Navy or from Washington, D. C.

(d) That said publication has a national office or an editorial office at any location contrary to the fact.

It is further ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the ConlIDissian a report in writing setting forth in detail the manner and form in which they have complied with this order.

Syllabus 48 F. T. C. O!'