Korber Hats, Inc.

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

which it has complied with this order.

Ix THE l\IATTER OF KORBER HATS, I , ET AL.

ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION 01 THE FEDERAL TRDE CO?DIISSIQ::T ACT Docket 8190. Complaint, Nov. 1.9GO-Decision Mar. 1962 Order requiring Fall River, ::Iass. , hat manufacturers to cease representing falsely that their straw hats-actually made of a braid manufactured in .J apan of Philppine hemp-were made in and imported from Italy by imprinting on attached tags and labels and on the sweatbands such statements as "Genuine MILAN" Genuine l\IILAX Imported Braid", etc. COMPLAINT Pursuant to the provisions of the Federa.l Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Corrnission having reason to believe that lCorber Hats, Inc. a corporation, and Sidney l\:orbe1', individuany and as an offcer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act Lnd it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its compla.int stating its, charges in that respect as follows:

PARAGRAPH 1. Respondent Korber Hats, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Massachusetts, with its principal offce and place of business located at 420 Quequechon Street, in thc city of Fall River State of Massachusetts.

Respondent Sidney Korber is an individual and is an offcer of the corporate respondent. 1-Ie formulates, directs and controls the acts pract ces and policies of the corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of thc corporate respondent.

PAR. 2. Respondents are now, and for some time last past have be, engaged in the manufa,cturing, advertising, offering for sale, sale and distribution of hats to distributors and jobbers. , , , , , KORBER HATS , INC. , ET AL. 643 642 Complaint PAll. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of Massachusetts to purchasers thereof located in various other States of the United States and in the District of Columbia, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as "commerce is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their business, ancl for the purpose of inducing the sale of their said hats, respondents have imprinted certain representations on the tags, labels and sweatbauds of men s straw hats respecting the origin, method of construction and material from which the said hats are made. Typical and illustrative or such representations arc the following from separate hats: 1. On the label Genuine MILAN imported handblocked" ; on the sweatband Genuine 31ilan 2. On the sweatband Genuine Imported Milan 3. On the label Genuine MILAN imported braid" ; on the sweatband Genuine MILAN"

PAR. 5. Through the use of the aforesaid statements respondents have represented, directly and indirectly: That said hats are manufactured in Italy and are of the same material, construction, design and worlunanship as men s straw hats manufactured in Italy and designated by the term ":\iilan PAR. 6. Said statements and representations are false, misleading and deceptive. In truth and in fact:

Said hats are not manufactured in Italy. Said hats are manufactured by respondents in the United States. Said hats are not of the same material, construction, design and workmanship as men s straw hats manufactured in Italy and designated by the term "Milan Men s straw hats designated as "Milan" are made in Italy of wheat straw braid which is of a narrow width with a distinctive style weave. R.respondents' hats are made of a braid manufactured in Japan of Philippine hemp. The said braid is not of the same style and characteristic as the braid used in the manufacture of the " filan hats.

PAR. 7. Through the foregoing acts and practices respondents have thereby placed in the hands of retailers and dealers the means and instrumentalities through and by which the buying public may be misled and deceived concerning the origin, material, construction, design and workmanship of said hats.

719-603--64--2 644 'FEDERAL TRADE COM:nSSION DECISIONS Initial Decision 60 !!" PAR. 8. In the conduct of their business, at all times mentioned here- , respondents have been in substantial competition, in commerce with corporations, firms and individuals in the sale of men s hats of the same general kind and nature of those sold by respondents. PAR. 9. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mistaken belief. As a consequence thereof, substantial trade in commerce has been, and is being, unfairly diverted to respondents from their competitors and substantial injury has thereby been and is being, done to competition in commerce. PAR. 10. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

M,' . Terral A Jordan for the Commission. lJh. lsador S. Levin of Levin and Levin of Fall River, Mass., for the respondents.

INITIAL DECISlOX BY l\'- Allf.. R. J DENSON, HEARING EXAl\IXEH In the complaint thc respondents are charged with mislabeling of hats manufactured aud sold by them in violation of the Federal Trade Commission Act. After ans,vcl' , three days of hearings were held in New York, N. , at which time the Commission put in its case and the respondents submitted their defense. Proposed findings were submitted in support of the complaint but not on behalf of the respondents. The proposed findings are sustained by the evidence and are approved.

Respondent Korber Hats, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of )CIassachusetts, with its principal offce and place of business located at 420 Quequechon Street, in the city of Fan River, State of l\fassachusetts.

Respondent Sidney Korber is an individual and is an offcer of the corporate respondent. lie fonnulates, directs and controls the acts practices and policies of the corporate respondent, including the acts , , , , KORBER HATS , INC. , ET AL. 645 Initial Decision and practices hereinafter set forth. His address is the same as that of the corporate respondent.

Respondents are now, and ror sometime last past have been, engaged in the manuracturing, offering ror sale, sale and distribution or hats to distributors and jobbers.

In the course and conduct or their business, respondents now cause and for sometime last past have caused, their said products, when sold to be shipped from their place of business in the State of Aiassachusetts to purchasers thereor located in yarious ot.her states or the l,Tnited States and in the District of Columbia, and maintain, and at all times mentioned herein, have maintained, a substantial course or trade in said products in commerce, as "commerce" is defined in the Fec1era Trade .Commission Act.

In the course and conduct of their business, and for the purpose of inducing the sale or their said hats, respondents have imprinted certain representations on the tags, labels, and sweatbands or men s stra-.y hats respecting the origin, method of construction and material rrom which the said hats are made. Typical and ilustrative of such representations are the following from separate hats: (1) On the label Genuine AIILAX Imported Hand Blocked" ; on the sweatband "Genuine 1filan (2) On the sweatband Genuine ImpOlted :lIilan (3) On the label Genuine ;\II:L:' Imported Braid" ; on the sweatband Genuine ::IILAJ.\"

Through the use or the aroresaid statements, respondents have representeel, directly or indirectly:

That said hats are imported from Italy and that said hats are of the same material, constrnction, design and workmanship as men straw hats made in whole or in substantial part in Italy and designated by the term "Milan Said statements and representations were raise, misleading and deceptive. In truth and in fact:

Said hats are not manufactured in Italy. Said hats are manufachired by respondents in the United States. Said hats are not of the same material, construction, design and workmanship as men s straw hats manufactured in Italy and designated by the tenn "Milan Men s straw hats designated as filan are made in Italy of wheat straw braid which is of a narrow width with a distinctive style of wea vc. Respondents' hats are made or a braid manuractured in. J apan of Philippine hemp. The said braid is not of the same style and characteristics as the braid used in the manuracture of the ":Milan hats.

, ,, 646 FEDERAL TRADE COMMSSION DECISION& Order 60 F.

Through the aforesaid acts and practices respondents ha VB thereby placed in the hands of retailers and dealers the 111cans and instrmnentali ties through and by "which the buying public may be misled and deceived concerning the origin, material, construction, design and worlnuanship of said hats.

In the conduct of their business, at all times lucntjoncd herein, respondents have been in substant.ial competit.ion, in commerce, with corporations, firms and individuals in the sale of men s hats of the same general kind find nature as those sold by respondents. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations ,,"cre and are true and into the purchase of tiubstantial quantities of respondents' products by reason of said erroneous and mist.taken belief. As a consequence thereof, substantial trade in commerce has been and is being unfairly diverted to respondents from their competitors and substantial injury has thereby been and is being done to competition in commerce. The aforesaid acts and practices of respondents, as herein alleged were and are all to the prejudice a,nd injury of the public and of respondents' competitors and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition in conm1erce within the intent and meaning of the Federal Tra,de Commission Act.

ORDER It i8 ordered That respondents Korber Hats, Inc., a corporation and its offcers and Sidney Korber, individually and as an offcer of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in con nection with the offering lor sale, sale or distribution of hats or any other articles of merchandise in commerce, as "commerce" is defu1ecl in thc Federal Trade Commission Act, do forthwith cease and desist from:

(1) -Using the terms ":Milan Genuine ::iilan Importedl\1:lan Genuine Imported l\iilan" or any other substantially similar representation a,s descriptive of men s straw hats not manufactured in Ita.ly of wheat straw.

(2) Using the terms "AIilan Gcnuine J\1:lan" "Imported I\iilan Genuine Imported l\Iilan" or any other substantially similar representation as descriptive of men s straw hats not of the same construction, design and workmanshjp as that traditionally characteristic PRESIDENT MANl;FACTURING CO, ) INC. , ET AL. 647 6'2 Syllabus of men s straw hats manufactured in Italy and designated as "jUilan (3) Using any words or phrases which, directly or indirectly, represent that said products are manufactured in a given country or out of certain materials or in a particular manner or style unless such is ft fact.

( 4) Furnishing or otherwise pla.cng in the hands of retailers or dealers in said products the mea,ns and instrumentalities by and through which they may mislead or deceiye the public in the manner or as to the things hereinabove inhibited. ORDER DE:NYING PETITION FOR REVIEW, DECISION OF THE CO)I:IISSIOX AND ORDER TO FILE REPORT OF COl\IPLIAXCB The initial decision of the hearing examiner having been filed in this matter on January 23, 1962, and respondents, on February 9, 1962 having filed a petition for review of sa-id initial decision pursuant to 20 of the Commission s Rules of Practice; and The Commission having examined the petition and the entire record and being of the opinion that a determination of the questions presented for review is not necessary nor appropriate under the law to insure a just and proper disposition of the proceeding- and to protect the rights of respondents; and The Commission having also determined that said initial decision is appropriate b1 aji respects to dispose of this proceeding: It is o1ylered That said petition for review, filed February 9 , 196:2 , and it hereby is, denied.

It i8 further' ordered That the initial decision of thc hearing examiner be, and it hereby is, adopted as the decision of the Commission. It i8 further' ordered That respondents, Korber Hats, Inc., and Sidney Korber, shall, within sixty (60) days after servi"" upon them of this order, fiJe with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist contained in the initial decision.