Knickerbocker Watch Co

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IN THE MATTER OF KNICKERBOCKER WATCH COMPANY COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1960. Complaint, June 17, 1DJ1-Deoision, Sept. 28, 1931 Where a corporation engaged in the purchase of watchcases and watch move· ments in the United States and in Europe, and in the sale thereof to jewelry wholesalers and jobbers in various States for resale to retailers and ultimate purchasers, sold watchcases labeled "Goldcraft ", notwlth· standing the fact that said products were neither made of gold nor gold plated; with the tendency and capacity to deceive ultimate purchasers as to the composition of said watchcases and to divert trade to it from com· petitors dealing in such articles truthfully branded or labeled, and other· wise injure such competitors, and with the result of placing in the hands of retail dealers therein the means of committing a fraud upon aforesaid purchasers:

Held, That such practices, under the circumstances set forth, were to the injury and prejudice of the public and constituted unfair methods of competition. Mr. E. J. Hornibrook for the Commission.

SYNOPSIS OF Co11IPLAINT Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent, a New York corporation engaged for more than one year last past in buying in the United States and in Europe watchcases and watch movements, and in selling the same to jewelry wholesalers and jobbers located in various States throughout the several States, and with principal office and place of business in New York City, with misbranding or mislabeling, in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce.

Respondent, as charged, engaged as above set forth has for more than one year last past caused to be stamped, branded, and labeled watchcases, neither made of gold, nor gold plated, with the term and designation " Warwick "\Vatch Co.-Goldcraft"; and said watchcases are and have been for more than one year last past resold to the public by said retailers, stamped, branded, or labeled with said term and designation.

288 FEDERAL- TRADE COMMISSION DECISIONS Findings 15F.T.C.

The term or designation " Goldcraft " so stamped, branded, or labeled on said watchcases, as alleged, " has the tendency and capacity to deceive ultimate purchasers of said watchcases or of watches contained in said cases, into the erroneous belief that said watchcases are made of gold, or are plated with gold, and to divert trade to said respondent from its competitors who sell and distribute in interstate commerce watchcases which are truthfully stamped, branded, or labeled, and otherwise injure such competitors, and the said use by respondent of the term or designation " Goldcraft "; causes to be placed in the hands of said retailers the means of committing a fraud upon ultimate purchasers of watches or watchcases so branded, stamped, or labeled "; and said " alleged acts and practices," as charged, " are all to the prejudice of the public and of the respondent's competitors and constitute unfair methods of competition."

Upon the foregoing complaint, the Commission made the following: REPORT, FINDINGs As TO THE Facts, AND ORDER Acting in the public interest pursuant to the provisions of an act of Congress approved September 26, 1914, the Federal Trade Commission on June 17, 1931, issued complaint against the above-named respondent and caused the same to be served on June 18, 1931, in which complaint respondent was charged with the use of unfair methods of competition in interstate commerce in violation of the provisions of section 5 of said act.

By notice contained in said complaint against this respondent, respondent was notified and required within thirty days from the date of service of same, unless the time therefor were extended by order of the Commission, to file with the Commission an answer to said complaint, and in said notice respondent was further notified of the provisions of the Commission's rules of practice with respect to answers and failure to answer, said provision being set forth in said notice and providing in part as follows : Failure of the respondent to app~ar or to file answer within the tlrue as above provided tor shall be deemed to be an admission of all the allegations of the complaint and to authorize the Commission to find them to be true and to waive hearing on the charges set forth in the complaint. Respondent has not at any time caused its appearance to be entered in this proceeding, nor has it, during the thirty-day period of time specified in the complaint herein, or at any time, made or filed answer to said com plaint.

KNICKERBOCKER WATCH CO. 289 287 Findings Thereupon this proceeding came on for final hearing, and the Federal Trade Commission, acting pursuant to said act o£ Congress and its aforesaid rules of practice, having duly considered the record and being fully advised in the premises, makes this its report in writ. ing, stating its findings as to the facts and conclusion drawn there· from:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Knickerbocker Watch Co., is a corpora· tion organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal place o:f business in the City of New York in said State. It is now, and :for more than one year last past has been engaged in buying in the United States and Europe watchcases and watch movements and in selling the same to jewelry wholesalers and jobbers located in various States through· out the several States of the United States; causing said products, when so sold, to be shipped or transported in interstate commerce, from its said principal place of business in the State of New York to the said purchasers thereof located in States other than the State of New York. Such wholesalers and jobbers sell said watch move· tnents and watchcases to retailers who, in turn, sell the same to the ultimate purchasers thereof. In the course and conduct of its said , business, respondent is in competition with other corporations, part. nerships, and individuals engaged in the sale and distribution of watch movements and watchcases in interstate commerce between and among the varjous States of the United States and the District of Columbia.

PAR. 2. Said respondent in the course and conduct of its said business, as described in paragraph 1 hereof, has for more than one year last past caused to be stamped, branded, and labeled and now causes to be stamped, branded, and labeled the said watchcases with the term and designation "Warwick Watch Co.-Goldcraft "; and said watchcases are and have been for more than one year last past resold to the public by said retailers, stamped, branded, or labeled with said term and designation. Such watchcases are not made of gold, and are not gold plated.

PAR. a. The term or designation " Goldcraft" so stamped, branded, or labeled on said watchcases has the tendency and capacity to deceive ultimate purchasers of said watchcases or of watches con· tained in said cases, into the erroneous belief that said watchcases are made of gold, or are plated with gold, and to divert trade to said respondent from its competitors who sell and distripute in Order 15F.T. 0.

interstate commerce watchcases which are truthfully stamped, branded, or labeled, and otherwise injure such competitors, and the said use by respondent of the term or designation, "Goldcraft," causes to be placed in the hands of said retailers the means of committing a fraud upon ultimate purchasers of watches or watchcases so branded, stamped, or labeled.

CONCLUSION The acts and things done by respondent under the conditions and circumstances described in the foregoing are to the injury and prejudice of the public and are unfair methods of competition in interstate 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."

ORDER TO CEASE AND DESIST Pursuant to 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," the Federal Trade Commission on the 17th day of June, A. D. 1931, issued its complaint against Knickerbocker \Vatch Co., a corporation, respondent herein, and caused the same to be served upon said respondent , on the 18th day of June, 1931, in which complaint it is charged that respondent has been and is using unfair methods of competition in interstate commerce in violation of the provisions of section 5 of said act.

The respondent not having filed an answer to the complaint and failure to file an answer within the time provided by the rules of practice and procedure by the Commission being deemed an admission of the allegations of the complaint and to authorize the Commission to find them to be true and to waive hearing on the charges set forth in the complaint, all of which the respondent had due notice and knowledge of, and the Commission having made its findings as to the facts and its conclusion that the respondent has 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 ia now ordered, That respondent, Knickerbocker Watch Co., a corporation, its agents, representatives, and employees do cease and desist from doing directly or indirectly any and all of the acts designated and set forth in paragraph 1 hereof in connection with the KNICKERBOCKER WATCH CO. 291 287 Order sale or offering for sate of watchcases in interstate commerce, or within the District of Columbia, as follows: PARAGRAPH 1. Using the word gold or the word goldcraft as a trade name or trade brand for watchcases or on labels, tags, containers, business stationery, or in advertising or otherwise to designate or describe watchcases which are not made in whole or in part of gold. PAR. 2. It is further ordered that respondent, within GO days from and after the date of service upon it of this order shall file with the Commission a report, or reports, in writing setting forth in detail the manner and form in which it is complying with the order to cease and desist hereinabove set forth.

1241500"-33-VOL lll-20 Findings 15F.T.O.