Sifo Products Company

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

COMPLAINT, FINDINGS AND OitDER IN THE l\IATTER OF THE ALLEGED VIo- LATION OF SECTION II OF AN ACT OF CONGRESS Al'PltOVED SEPTEMBER 26, 1914.

Docket 474-Februury 29, 1924.

SYLLABUS.

Where a corporation engaged in the manufacture and sale of a composition felt base rooting material containing no rubber and made in varying weights and thicknesses; in accordance with the practice of some manufacturers in so designating their smooth quality roofing to distinguish the same from other qualities not so finished, designated, advertised, labeled and sold the same as " rubber" roofing, and, in accordance with the practice of manufacturers and deulet·s, as one-ply, two-ply, and three-ply, as the case might be; with the capacity and tendency to· mislead part of the trade and the general purchasing public In reference to the composition and manufacture ot such roofing and into believing that in purchasing the rooting of said corporation it was In fact buying a product composed wholly or ptJrtly of t·rubber and consisting of two or three plies, layers, or thicknesses, respectively:

lield, That such pructices, under the circumstances set forth, constituted un fair methods of competition.

Mr. John R. Dowlan for the Commission.

COMPLAINT.

The Federal Trade Commission having reason to believe, from a Preliminary investigation made by it, that the Sifo Products Company, hereinafter referred to as respondent, has been and now is using unfair methods of competition in interstate commerce in violation of the provisions of Section 5 of the 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," and it appearing that a proceeding by it in respect thereof ~ould be to the interest of the public, issues this complaint, stating lts charges in that respect, on information and belief as follows: PARAGRAPH 1. That the respondent, Sifo Products Company, is and at all times hereinafter mentioned was a corporation organized, existing, and doing business under and by virtue of the laws of the ~tate of Minnesota, having its principal office and place of business In the city of St. Paul, in said State, now and for more than two Years last pnst engaged in the manufacture and sale of a composition •328 FEDERAL TRADE COMMISSION DECISIONS. Findings. 7F.T.C.

felt-base roofing material and in the shipment thereof from its place of manufacture to purchasers thereof in other States of the United States, and the District of Columbia, in direct competition with numerous other persons, copartnerships, and corporations similarly engaged.

PAR. 2. That for a period of more than two years last past the respondent, in the conduct of its business of manufacturing, selling, and shipping composition felt-base roofing• material in interstate commerce as aforesaid, ha~ used the word "rubber" in its labels, advertising and other printed matter to characterize and describe its said product; that said characterization or description is false and misleading in that said product contains no rubber in its composition, and has the effect of creating an impression and belief among the trade and general public that respondent's said product is composed wholly or partly of rubber and the further effect of inducing purchasers to give to said product an undue preference over similar products of competitors that are not so characterized and described. PAR. 3. That for a period of more than two years last past the respondent, in the conduct of its business of manufacturing, selling, and shipping composition felt-base roofing material in interstate commerce as aforesaid, has used the terms "one-ply," "two-ply," and "three-ply" to designate and describe the different degrees of thickness of its said product; that said designation or description is false and misleading in that said product in its different degrees of thickness consists of but one layer or ply, and has the effect of creating an impression and belief among- the trade and general public that respondent's said product consists of so many separate layers of felt, and the further effect of inducing purchasers to give the same product an undue preference over similar products of competitors that are not so designated and described. REPORT, FINDINGS AS TO THE FACTS, AND ORDER. Pursuant to an Act of Congress approved September 2G, 1914, the Federal Trade Commission issued and served its complaint upon the respondent, SiFo Products Company, charging it with the use of unfair methods of competition in commerce, in violation of the provisions of said act. The respondent having entered its appearance and filed its answer herein, a stipulation as to the facts was entered into by counsel for the Commission and respondent, to be taken in lieu of evidence, and thereupon this proceeding came on for final hearing, and the Commission, having duly considered the record and being now fully advised in the premises, makes this its findings as to the facts and conclusion:

SIFO PRODUCTS CO. 829 327 Findings. FINDINGS AS TO THE FACTS.

P ARAGRAPII 1. Respondent is a corporation, organized under the laws of the State of Minnesota, having its principal office and place of business in the City of St. Paul, Minnesota, and now and for more than two years last past engaged in the manufacture and sale of a composition felt-base roofing material, which it sells and ships in commerce to purchasers in other States of the United States and the District of Columbia, in direct competition with other persons, partnerships and corporations similarly engaged. PAn. 2. The above-mentioned composition felt-base roofing rnatel ial, which is hereinafter referred to as asphalt roofing as com-· monly and customarily made by the several manufacturers thereof, including respondent, is composed of a base of felt made of rag waste and other materials, impregnated and coated with asphalt. llcspondent, in connection with the marketing of its said product and to advertise and distribute the same uses samples of the various kinds and brands of its said asphalt roofing, such samples being enclosed in a printed or cardboard cover, and respondent also uses • printed circulars and other printed matter which it distributes to jobbers, retail dealers and others who might be interested in the purchase or use of said roofing, and in addition thereto respondent places upon its said product labels descriptive thereof with the results hereinbelow set out. For many years prior to the filing of the complaint herein, it has been the custom and practice of several but not all of the manufacturers of asphalt roofing to designate and describe a certain grade or quality of said asphalt roofing, to wit, a smooth quality as "Rubber Roofing," to distinguish that smooth quality of roofing from the other qualities of roofing not so finished but surfaced with slate or other mineral substances, notwithstanding the fact that there was and is no rubber used in the composition ?f the above described roofing; in like manner the respondent upon lts said labels and in various circulars and other advertising matter prior to the filing of the complaint displayed or caused to be displayed the name or term "rubber" in connection with its said asphalt roofing, as hereinbefore set out . . The use by .respondent of the word "rubber," as above described, 1 ~ a false and misleading characterization, designation and description of its asphalt roofing and has the tendency and capacity to create a false impression and belief among part of the roofing trade and the general public that respondent's said asphalt roofing and other roofing of the same type is composed wholly or partly of tubber, and to deceive and mislead the general purchasing public ll.nd part of the trade into the belief that in purchasing respondent's 330 FEDERAL TRADE COMMISSION DECISIONS, Order. 7F.T.C.

said asphalt roofing it is in fact purchasing a roofing composed wholly or partly of rubber.

PAR. 3. The above described asphalt roofing as commonly made by the several manufacturers thereof, including respondent, consists of one single piece of felt impregnated and coated, as aforesaid, and not of two or more plies, layers or thicknesses, superimposed one upon the other and made into one piece, the terms "one, two, and three ply" being applied simply to the different thicknesses and weights of such roofing; respondent's said asphalt roofing has always consisted of one single piece of felt, impregnated and coated as hereinbefore set out, made in differing weights and thicknesses to which respondent applies the terms "one, two, and three ply "; likewise for a number of years last past and prior to the filing of the complaint herein it has been the practice of manufacturers of and dealers in asphalt roofing to designate and describe the differ~nt weights or thicknesses of such roofing by the use of the terms "oneply," "two-ply," and "three-ply," notwithstanding the fact that such roofing consists of one ply, layer or thickness only, and respondent followed that practice has hereinbefore set out. The use by the respondent of the words, "two-ply" and "three- • ply," as above described, is a false and misleading designation and description of its asphalt roofing nnd has the tt>ndency and capacity to create a false impression and belief among part of the roofing trade and the general public that respondent's said roofing and other roofing of the same type consists of two or more plies, layers, or thicknesses, nnd to deceive and mislead the general purchasing public and part of the trade into the belief that in purchasing respondent's said roofing it is in fact purchasing a roofing that consists of two or more plies, layers, or thicknesses. CONCLUSION, The practices of the respondent, under the conditions and circumstances described in the foregoing findings as to the facts, are unfair methods of competition in inter.state commerce, and constitute a violation of the 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." l'tiODIFIED ORDER TO CEASE AND DESIST,1 This proceeding having been heard by the Federal Trade Com· , mission upon the complaint of the Commission, the answer of 1 :Wade u of 1une 16, lllU.

THE WEAVER ROOF CO. 331 327 ~!emoranda. respondent, the stipulation as to the facts entered into by counsel for the Commission and the respondent, and the Commission having made its findings as to the facts, with its conclusion that the respondent has violated the provisions of the 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 i8 now ordered, That respondent, SiFo Products Company, its agents, servants, employees and representatives do cease and desist- From employing or using in connectio11 with the sale of roofing material not composed of rubber the word "Rubber," alone or in combination with any other word or words to describe its product; (a) in circulars, booklets or other advertising matter; or (b) as, or in connection with, or as part of, a trade name or bt·and for such roofing; or (c) on labels, covers or wrappers for, or on rolls of, such roofing; and From employing or using in connection with the sale of roofing material not composed of two or more plies, layers or thicknesses the words "two-ply" or "three-ply," alone or in combination with any other word or words to describe its product; (a) in circulars, booklets or other advertising matter; or (b) as, or in connection with, or as part of, a tro.de name or brand for such roofing; or (c) on labels, covers or wrappers for, or on rolls of, such roofing. It is further ordered, That the respondent, within thirty (30) days from notice hereof, file with the Commission a report in writing stating in detail the manner in which this order has been complied with.

The Commission also made similar findings and orders, as of February 29, 1924, in the following cases: ' OERTEL Roofing :MANUFACTURING Co., of East St. Louis, Ill. Docket 475. Appearances: Mr. John R. Dowlan for the Commission; Mr.ltfm·tin F. OelL?nke and Mr. William E. Wheeler, of East St. Louis, Ill., for respondent.

McliENRY-MILLIIOUSE MANUFACTURING Co., of South Bend, Ind. Docket 479. Appearances: Mr. John R. Dowlan for the Commission. SYLVESTER L. 'VEAVER, TRADING AS Tne 'VEAVER Roof Co., of Los Angeles, Cal. Docket 4!>0. Appearances: Mr. Jolm R. Dowlan for the Commission.

332 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 7F.T.O.

FEDERAL TRADE COMMISSION v.

STOWELL MANUFACTURING COMPANY.