Windsor Cigar Co

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

IN THE MATIER OF WINDSOR CIGAR COMPANY, BENJAMIN PARIS, DOING BUSINESS UNDER THE TRADE NAME AND STYLE, PARIS CIGAR COMPANY, RAPHAEL N. PARIS COMPLAINT (SYNOPSIS), FINDINGS, AN:D ORDER IN REGARD TO Tile ALI.EGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1301. Cot!J-plaint, Apr. 8, 1925-Declsicm, May 2~, 19'1!7 Where tobacco ,rown upon the Island of Cuba and known as Havana tobacco had long had a wide and favorable reputation among the trade and cigarconsuming public and been generflliy considered as being the highest grade of tobacco from which cl,ars could be made, and the word "Havana" lrud come to signify to said trade and public that the cigars to which It was applied were made entirely of tobacco there grown; and therPnfter a corporation engaged in the manufacture and sale of cigars containing no Havana tobacco and two Individuals associated with it therein, named cigars made by It as above set forth, and sold at retail at five cents each "Havana Cadet," and so advettised and labeled the same, togeth£>r with the picture of n cadet and the Inscription In smaller type " Imported Sumatra Wrapper-Domestic Filler" (under which name and label the aforesaid individuals had theretotore sold cigars without such Inscription) ; wlth the capacity and tendency to mislead and deceive the trade and cigarconsumlllg public Into bellevlng the aforesaid cigars to be composed of Havana tobacco, and with the etrect of diverting trade from competitors engaged In the manufacture and sale of cigars so composed und ordinarlly sold to the consuming public, as to some, at the aforesaid price, and from competitors engae-ed in the manufacture and sale of cigars neither WJ composed nor so represented by them:

Held, That such practice~. under the circumstances set furtb, constituted unfulr methods of competltlm·J.

Mr. Edward E. Reardon for the Commission. Mr. John E. Cross and M1". Louis Hollander, of Baltimore, Md., and Mr. Martin Lehmeyer and Mr.llenry 0. Niles, of York, Pa., for respondents.

SYNOPSIS OF COMPLAINT Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent corporation, engaged at York, Pa., in the manufacture of cigars compo$ed wholly of tobacco grown elsewhere than on the Island of Cuba, and in the sale thereof through respond('nt Paris as distributor, with naming product misleadingly and misbranding or misll.beling in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate WINDSOR CIGAR CO. ET AL. 121 120 Findings commerce, in that respondents, for about one year preceding the complaint, adopted as a name and designation for said cigars the phrase "Havana Cadet," and featured the same upon the containers thereof, with the capacity and tendency to mislead, deceive, and con· fu!:c many wholesale and retail dealers and many of the consuming public into believing said cigars to be composed entirely of tobacco grown on the Island of Cuba, long favorably known to the cigar· tobacco trade, the cigar trade, and the cigar purcha:t>ing public o£ the United States as Havana tobft.cco, and considered by many thereof superior in quality for the manufacture of cigars to tobacco grown elsewhere, and to cause many of said trade and public to purchase said cigars in such belief, and with the effect of diverting business from and otherwise injuring and prejudicing competitors, many of whom sell cigars composed in part or in whole of tobacco grown elsewhere than in Cuba, without using the word Havana in connection therewith, or in other manner representing the same as composed entirely of tobacco grown in Cuba, and others of whom sell cigars composed entirely of such tobacco and properly label, brand, advertise, and otherwise represent the same under the name "Havana" and various ,phrases and appellations including such word; all to the prejudice of the public and responde11t's competitors. Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTS, AND ORDER .. Pursu11nt to the provisions of an act of Congress approved Sep· tember 26, 1914 (38 Stat. 717), the Federal Trade Commission issued and served a complaint upon the above·named respondent!! charging them with the usc of unfair methods of competition in commerce in violation of the provisions of said act.

The respondents having made and filed their answers to the com· plaint; formal hearings were had before an examiner of the Com· mis!!!ion at which all of the above·named respondents appeared by counsel and testimony was taken and evidence introduced on the part of the Commission in support of the charges stated in the complaint and by the respondents in opposition thereto. Thereupon this proceeding came on for decision before the Fed· era! Trade Commission and upon the testimony and evidence intro· tluced on the part of the Commission and the respondents and upon argument of counsel for the Commission and for the respondents, the Commission, having duly considered the record and being fully advised in the premises, makes these its findings as to the facts and its conclusions drawn therefrom:

Findings llf.T.C.

FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, 'Vindsor Cigar Co., is a corporation, organized April 29, 1924, under the laws of the State of Pennsylvania, with its principal office and place of business at Windsor, in York County, in said State.

PAR. 2. The respondent, Benjamin Paris, is an individual doing business under the trade name and style, Paris Cigar Co., having its principal place of business at Windsor, in York County, State of Pennsylvania.

PAR. 3. The respondent, Raphael N. Paris, is an individual having his principal place of business in the city of Baltimore, Md. PAR. 4. The respondent, Windsor Cigar Co., is and has be.en since the date of its incorporation engaged in the manufacture and sale of cigars at Red Lion, in the county of York, Pa., and on 1\fay 20, 1924, the Windsor Cigar Co. entered into an agreement with respondents, Benjamin Paris and Raphael N. Paris, whereby the Windsor Cigar Co. agreed to manufacture cigars under the direction and according to the instructions of respondent, Benjamin Paris, and to sell them in accordance with the directions of respondent, Raphael N. Paris. This agreement provided that the Windsor Cigar Co. should manufacture cigars to be sold under the name "Havana Cadet" and that respondents Benjamin Paris and Raphael N. Paris were to be paid a commission, respectively, by the Windsor Cigar Co. for cigars made and sold under the name or brand of" Havana Cadet." PAtt. 5. Immediately after the organization of the respondent, Windsor Cigar Co., it b£'gan to manufacture cigars under the above wntract. The cigars were packed in tin containers and have been and are sold to wholesale and retail dealers by respondents and the said cigars have been and are offered for sale and sold by said retail dealers to the consuming public. The respondents caused the said cigars when sold by them to be transported from within the State of Pennsylvania, to the purchasers, the said wholesale and retail dealers, located in various States of the United States other than the State of Pennsylvania. The cigars made and sold by the respondents under the brand name "Havana Cadet" have been and are offered for sale and sold to the purchasing public for use and consumption at the retail price of 5 cents. In the course and conduct o.f their said business respondents are and have been in competition with other individuals, partnerships and corporations engaged in the manufacture and sale of cigars in interstate commerce between aud among the various States of the United States.

WINDSOR CIGAR CO. ET AL. 12B !20 Findings PAR. 6. On the containers of the cigars made and ~old by the respondents, as aforesaid, the respondents caused to appear the picture or illw;;tration of a young man in a uniform such as is commonly worn by ,students of a military academy. Above this picture or illustration on the containers of the cigars and in advertisements, respondents caused the word "Havana" to be set forth and immediately underneath the picture the word "Cadet." On the containers of the cigars in smaller type the printed inscription "Imported Sumatra ·wrapper-Domestic Filler" was caused to appear. In advertisements of the said cigars the re.spondents sometimes caused the brand or name "Havana Cadet" to appear without the said picture.

PAR. 7. For a number of years prior to the organization of the respondents' Windsor Cigar Co., cigars were sold by the respondents Benjamin Paris and Raphael N. Paris under the said brand, name, or label "Havana Cadet," in containers on which appeared the aforesaid picture of a young man in the uniform of a cadet together with the name "Havana Cadet" as above described, and during this time neither the inscription "Imported Sumatra Wrapper-Domestic Filler " nor any other inscription, or words, were used in connection with the sale of the said brand of cigars which indicated the name or nature in any way of the toba:cco composing them, excepting the word "Havana" in the brand name "Havana Cadet." PAn. 8. At all times herein mentioned and for a great many years prior thereto, the word "Havana" signified and still signifies to the tobacco trade and the consumers of cigars that the cigars of which it is descriptive are made as to all component parts, filler, binder and wrapper, of tobacco grown upon the Island of Cuba. Tobacco grown upon the Island of Cuba, generally known as Havana tobacco, has long had a wide and favorable reputation among the trade and cigarconsuming public and has been and is now generally considered the highest grade of tobacco from which cigars can be manufactured. PAn. 9. The cigars made and sold by the respondents under the brand name "Havana Cadet" have not at any time contained, and do not now contain, any Havana tobacco.

PAR. 10. There are among the competitors of respondents referred to in paragraph 5 hereof many who manufacture and sell cigars made entirely of Havana tobacco, some of which cigars are ordinarily sold to the consuming public at 5 cents each. There are many others among said competitors who do not represent that cigars manufactured and sold by them are Havana cigars or are made of Hnvana tobacco except when the cigars so represented are made entirely from tobacco grown upon the Island of Cuba. The use of the name "Ha- Order llf.T.C.

vana" by respondents as set forth and found in these findings tends to nnd does divert trade from both classes of ~aid competitors. P .AR. 11. The nsme or word "Havana" used by the respondents in the brand name "Havana Cadet" on the containers of their cigars, which are not made wholly of Havana tobacco, and in their advertisements, is misleading and has the capacity and tendency to mislead and deceive those engaged in the trade and also consumers of cigars into the belief that respondents' cigars thus described were and nre made of Havana tobacco.

CONCLUSION The practices of the respondents under the conditions and circumstances described in the foregoing findings are to the injury and prejudice of the public and respondents' competitors and are unfair methods of competition in commerce and constitute a violation of the act of Congress approved September 26, 1914, entitled "An act to create a F'ederal Trade Commission, to define its powers and duties, and for other purposes".

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and upon the answers of fhe re,spondents, filed herein, and the Commission having made its findings as to the facts and its conclusion that the respondents have violated the provisions of an 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 Wind,sor Cigar Co., its officers, agents, representatives, servants, and employees and the respondents Benjamin Paris and Raphael N. Paris, their agents, representatives, servants, and employees cease and desi,st in connection with the sale and distribution of cigars in interstate commerce :from- (1) Using the word" Havana" as a brand name for or descriptive of such cigars unless the same be composed entirely of tobacco grown in the Island of Cuba.

(2) Representing in any manner whatsoever that any of re,spondents' said cigars othsr than those manufactured entirely from tobacco grown in the Island of Cuba are Hava11a cigars. It is further ord~ed, That the respondents, Windsor Cigar Co., Benjamin Paris and Raphael N. Paris, shall, each of them, within 30 days after service upon them, respectively, of a copy of this order, file with the Commis,sion a report in writing setting forth in detail the manner and form in which each of them has complied with the order to cease and desist herein set forth. McGOWAN LABORATORIES, INC., ET AL. 125 Syllabus