M. Kufferman

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

IN THE MATI'ER OF M. KUFFERMAN, SAMUEL LAN, S. LAVINE, AND J, FEIGHERY, COPARTNERS, DOING BUSINESS UNDER THE TRADE NAME LEIPZIG IMPORTING COMPANY COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 21~1. Complaint, Dec. 2!2, 1933-Decisi<m, Oct. 23, 1934 Where a firm engaged in sale of a proprietary article designated " Philodermin Salbe ", for treatment of dandru:tr and other conditions of hair and scalp, represented in advertisements in newspapers and periodicals that said product was "developed by a great German scientist", destroyed dandru:tr quickly, restored health to the scalp, prevented baldness, saved the hair that was left, and would open the pores, grow new hair in many cases, and halt signs of baldness, and bad been sold and used in Germany, and made thousands of friends, and been tried and proved effective; Facts being said product consisting of 1 percent sulphur mixed with petroleum, together with some perfume, did not constitute an efficient therapeutic agent for cure or prevention of dandru:tr or loss of hair, and could not cause new hair to grow, or restore health to the scalp; With effect of deceiving and misleading members of the public who bad purchased and used same in reliance upon such representations, and with capacity and tendency so to do, and effect of diverting trade to it from competitors who deal in articles or preparations for treatment of hair and scalp, and temporary removal of dandruff, and some of whom do not represent that through use of their products said condition may be prevented or cured, loss of hair and baldness be prevented, or new hair caused to grow:

Held, That such practices, under the circumstances set forth, were to the prejudice and injury of competitors and the public, and constituted unfair methods of competition.

Mr. Edward E. Reardon for the Commission. SYNOPSis OF Co:r.rPLAINT Reciting its action in the public interest, pursuant to the provisions of Section 5 of the Federal Trade Commission Act, the Commission charged respondent partners, engaged in the sale of a proprietary article called " Philodermin Salbe " for treatment of various conditions of the hair and scalp and with principal place of business in East Orange, N. J., with advertising falsely or misleadingly as to qualities or properties of product, in that they falsely represent that the use of said preparation will prevent baldness, dandruff, or loss of hair, restores health to the scalp and gives the LEIPZIG IMPORTING CO. 281 280 L'in<.lin;;s " choked hair roots " a chance to grow; and that it saves what hair· the user of it may have, and that " you will see the difference .. Within one week you will notice the change in your hair. In threeweeks your mirror will tell a thrilling story. Your hair will be soft • • • lustrous * • * smooth. No more worries about dandruff or baldness. And then you can be proud of the ' Glory of 1Nature' * * * your own beautified hair I" The publication and use by respondents of such statements, in connection with the advertisement or otherwise " in the sale of 'Philodermin Salbe' have the tendency and capacity to mislead and deceive and they have misled and deceived members of the public into believing that the said statements were and are true; and jn reliance upon that belief into purchasing and using Philodermin Salbe in preference to preparations or proprietary articles sold by respondents' competitors; and have the further tendency and capacity to divert trade and they have caused trade to be diverted from competitors of respondents," engaged in the sale of various proprietary or other articles to members of the public for the same purposes for which respondents' said preparation is sold; all to the prejudice of the public and competitors and in vio.lation of the provisions of Section 5.

Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress approved September 26, 1914 (38 Stat. 717), the Federal Trade Commission issued and served a complaint upon the above-named respondents charging them with the use of unfair methods of competition in commerce in violation of the provisions of said act. The respondents having filed their answer herein, hearings were had and evidence was thereupon introduced on behalf of the Commission and the respondents before an examiner of the Federal Trade Commission duly appointed.

Thereupon this proceeding came on for a final hearing on the brief filed hy counsel on behalf of the Commission, no one appearing for the respondents, and the Commission having duly considered the record and being fully advised in the premises finds that this proceeding is in the interest of the public and makes this its findings as to the facts and the conclusion drawn therefrom: 1 Other statements and represent!ltions alleged In the conrplaint as having been made by respondents In advertisements In newspapers and periodicals, are set forth In the findings, Infra, at page 283.

Findings 19F, T.C.

FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondents, M. Kufferman, Samuel Lan, and S. Lavine are residents of New Jersey, and the respondent, J. Feighery, is a resident of New York, and the said respondents are copartners doing business under the trade name Leipzig Importing Co. Said respondents have been engaged in business under the above trade name at all times since on or about September 1932, and they have a place of business at 730 Frelinghuysen Avenue, Newark, N.J.

PAR. 2. The respondents during all of the times since on or about September 1932 have been engaged in the sale of a proprietary article called Philodermin Salbe, which they have sold to members of the public located in various States of the United States other than New Jersey for use by the purchasers in treating dandruff and other pathological conditions of the hair and scalp of the user, and the respondents have caused the Philodermin Salbe, when sold by them, to be transported from New Jersey, or from the State of origin of the shipment thereof, to, into, and through States other than New Jersey, or the State of origin of the shipment, to the purchasers.

PAR. 3. During all the times above mentioned other individuals, firms, and corporations located in various States of the United States, hereinafter called sellers, are and have been engaged in the business of the sale of various proprietary or other articles to purchasers, dealers therein who bought the proprietary or other articles for resale to the public, and members of the public who bought the same for their own use or consumption, and the said sellers have, respectively, caused their said proprietary or other articles, when so sold by them, to be transported from the State of the seller to, into, and through States other than the State of the seller, or the State of origin of the shipment, to the purchasers. PAR. 4. The respondents above-named during all the times above mentioned have been and still are in competition in interstate commerce in the sale of Philodermin Salbe with the said sellers, respectively, referred to in paragraph 3 hereof. PAR. 5. Philodermin Sal be, the product above referred to, in the sale of which respondents have been engaged, is a yellow ointment contained when sold by respondents in a small porcelain jar and consisting essentially of sulphur 1 percent mixed with petrolatum and perfumed with vanillin or a similar material. PAR. 6. The respondents in connection with the sale of Philodermin Salbe caused advertisements to be published in newspapers, l LEIPZIG IMPORTING CO. 283 280 Findings magazines, and periodicals which were circulated among the public of the various States of the United States and which contained statements, among others, as follows:

HAIR FALLING OUT? Does your comb show evidence of oncreeping baldness, dandruff, loss of vitality of the hair? Then Philodcrrnin Salbe will perform wonders for you. Developed by a great German scientist, it destroys dandruff quickly, restores health to the scalp and gives your choked hair roots a chance to grow. We guarantee to save what hair you have and prevent baldness or return your money, No matter how many treatments you have used in the past, send for Philodermin Salbe today. It will amaze you. Send no money. Pay postman $1.50 anywhere In the U. S.

LEIPZIG IMPORTING COMPANY Main & Grove Sts., East Orange, N. J. Dept. A-7. In the first week apply this treatment three times. After six: days yon Will find that every trace of dandruff has vanished. Any oncoming signs of baldness will be halted. This is true because the Philodermin Treatment cleanses, lubricates and stimulates the circulation oi' nourishing blood to the hair roots.

Keep up this treatment once or twice weekly and you 1will supply the strength needed by choked hair roots. Philodermin Salbe will open the pores and in many cases will actually grow new hair. However, it is not advertised and sold as a hair grower.

German Discovery. For years this product has been sold and used in Germany. It has made thousands of friends. Our files are full of their letters describing their own cases and their success with the use of Philodermln Salbe. So you see, this is not an experiment. This hair preserver has been tried and proved effective.

PAR. 7. The respondents' product, Philodermin Salbe, is not an efficient therapeutic agent for the cure or the prevention of dandruff or to prevent loss of hair or baldness of a person who uses it and it cannot cause new hair to grow on the head of the user. PAR. 8. The stv.tements which the respondents caused to be made in the advertisements, mentioned and referred to in paragraph 6 hereof, to the effect that the use of their proprietary article, Philodermin Salbe, will prevent dandruff, loss of hair, and baldness, and that its use will grow new hair, were and are untrue in that the use of Philodermin Salbe will not prevent or cure the condition of dandruff or prevent loss of hair and baldness of the user; will not restore health to the scalp; and by its use will not cause new hair to grow on the user's head. Philodermin Salbe is not an efficient therapeutic agent for such purposes.

PAR. 9. The publication and the use by respondents in connection with the sale thereof, of the statements regarding Philodermin Salbe 284 FEDERAL TRADE OOMMISSION DECISIONS Order 19F.T.O.

contained in the advertisements, mentioned and referred to in paragraph 6 hereof, have the capacity and the tendency to deceive and mislead, and they have deceived and misled members of the public, purchasers who bought Philodermin Salbe for use or consumption, into believing that the said statements were and are true; and in reliance upon that belief, into purchasing and using Philodermin Salbe.

PAR. 10. Among the competitors of the respondents, referred to in paragraph 3 hereof, are some who sell and cause to be sold preparations or proprietary articles for the treatment of the hair and scalp and who, respectively, do not represent that by the use of their products dandruff may be prevented or cured; or that the loss of hair and baldness may be prevented; or that by the use of their product new hair will be caused to grow on the user's head. PAn. 11. In consequence of the practices of the respondents above set forth, trade in articles or preparations for the treatment of the hair and scalp, including the temporary removal of the excessive proliferation of the opithelial cells, otherwise known as dandruff, from the scalp, was diverted to the respondents to the prejudice and injury of competitors and the public.

CONCLUSION The practices of the respondents, 1\f. Kufferman, Samuel Lan, S. Lavine, and J. Feighery, copartners, doing business under the trade name Leipzig Importing Co., under the conditions and circumstances described in the foregoing findings were to the prejudice and injury of competitors of the respondents and were to the prejudice and injury of the public and were unfair methods of competition in commerce and constitute a violation of the provisions of an Act of Congress approved September 26, 1914, entitled uan Act to create a Federal 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, the answer of the respondents to the complaint, testimony and evidence introduced, and upon the bri-ef of counsel for the Commission; and the Commission having made its findings as to the facts and its conclusion that the respondents, M. Ku:fferman, Samuel Lan, S. Lavine, and J. Feighery, copartners, doing business under the trade name Leipzig Importing Co., have violated the provisions of al). Act of Congress approved LEIPZIG IMPORTING CO. 285 Order September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes"- It is now ordered, That the respondents, M. Kufferman, Samuel Lan, S. Lavine, and J. Feighery, doing business under the name Leipzig Importing Co. or trading under their own names or any other trade name, in connection with the sale or offering for sale of Philodermin Salbe or of any proprietary article or preparation for the treatment of dandruff and other pathological conditions of the hair and scalp in interstate commerce between and among the several States of the United States and in the District of Columbia, do- Cease and desist, From representing directly, or indirectly, through their agents and salesmen, in advertisements in newspapers, magazines, periodicals, or otherwise- (!) That the Philodermin Salbe, now sold by the respondents, or any other proprietary article or preparation, sold by them or any of them, will by its use cure the condition of the scalp .Known as dandruff, cause hair to grow or regrow or prevent the loss of hair and baldness, or that it will restore health to the scalp or head of the user. (2) That Philodermin Salbe, as now composed, or any other proprietary article or preparation, sold by the respondents or any of them, is an efficient therapeutic agent in the medical treatment of any disease or pathological condition of the hair and scalp of the user unless and until the said Philodermin Salbe or other proprietary article or preparation is so composed that it constitutes and is an efficient therapeutic agent in the medical treatment of a particular disease or diseases or patho.logical condition of the hair and scalp of the user.

It is further ordered, That the respondents, M. Kufferman, Samuel Lan, S. Lavine, and J. Feighery, shall within 30 days after the service of this order, file with the Federal Trade Commission a report in writing, setting forth in detail the manner and form in which they have complied with this order to cease and desist. FEDEUAL TRADE COMMISSION DECISIONS286 Complaint 19F. T. C.