Wholesale Radio Service Co., Inc.

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

IN THE MATTER OF "WHOLESALE RADIO SERVICE CO., INC.

COMPLAINT AND ORDE.R·'IN REGARD TO THE ALLEGED VIOLATION OF SEC. 15 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 21,58. Complaint, June 26, 1935-order, July 22, 1935 Consent order requiring respondent corporation, in connection with the sale in Interstate commerce of hacksaw blades, to cease and desist from using the word "Tungsteel", or words of similar import, to describe such blades until and unless the steel from which they are manufactured contains tungsten metal in such quantity and proportion as to be steel commonly known and described as tungsten steel.

Mr. Edw. W. Thomerson for the Commission.

Complaint Pursuant tQ the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Com~ missi9n, to define its powers and duties, and for other purposes", the Federal Trade Commission, having reason to believe that the 'Wholesale Radio Service Co., Inc., a corporation, hereinafter referred to as respondent, has been and is using unfair methods of competition _in commerce, as "commerce" is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent is a corporation organized and existing under and by virtue of the laws of the State of New York with its principal office and place of business in the city of New York, State of·New Ym;~, a11<1: ;with branch,'offi~s and places of busine~ in the city of Newark, State of New Jersey, and in the city of Atlanta, State of Georgia.

PAR. 2. Respondent is now and has been for the several years last past engaged in the mail-order wholesale business, offering for sale and selling, among other things, hacksaw blades to customers located at various points in the several States of the United States, and in causing said .hacksaw blades, when so sold, to be transported from its said place of business located .in the States, of New. York, New. Jersey, a,nd Ge~rgi~, as above allege.d, into and ·across the sev~ eral States' o'f the United States to the said purchasers thereof locate-d at various points in said several States of the United States 156 FEDERAL TRADE COl\IMISSION DECISIONS Complaint 21 F. T.C.

other than New York, New Jersey, and Georgia. Other corpora· tions and partnerships, associations and persons, who do not use the methods used by the respondent as hereinafter alleged, have been and are likewise engaged in offering for sale and selling hacksaw blades in said commerce among he several States of the United States. Respondent1 in the course and conduct. of its business as aforesaid, is in substantial competition with such other corporfltions and partnerships, associations and persons so engaged in offering for sale and selling said products in said commerce. PAR. 3. Hacksaw blades are used throughout the several States of the United States to cut steel and such users of such blades believe that hacksaw blades which contain tungsten metal in a proper content are more durable and more desirable for that purpose than are hack· saw blades which do not contain tungsten metal in a proper content. Such users prefer a hacksaw blade containing tungsten metal to a hacksaw blade which does not contain such metal. It is more ex· pensive to manufacture hacksaw blades containing tungsten metal in the proper content than it is to manufacture hacksaw blades not containing tungsten metal in proper content, and blades containing tungsten metal sell for a higher price than do blades which do not contain tungsten metal. The term "tungsten steel'' and ''tuncrsteel" are used in the trade and among users of hacksaw blades as ""mean· ing that blades so designated contain tungsten metal in proper con· tent. Hacksaw blades which contain tungsten metal in proper con· tent and hacksaw blades which do not contain said metal in proper content are similar in appearance a~d c.cannot be distinguished by the users thereof from a casual exammatlon of such blades. Hack· saw blades which do not contain tungsten metal are not as salable as and are inferior to blades which do contain tungsten metal. Hack· saw blades containing tungsten metal in rro:per content are consid· ered by users to be of first quality, flexible, fast cuttin,.. and lon..,. lived. ~ ' b'. 0 ' PAR. 4. Respondent, within the two years last past; inlthe co~rse and cmi.cluct of its business in said commerce as aforesaid, has adver· tised sold and distributed certain hacksaw blades under the name "Tunrtsteel"'' ' and has distributed to. usersI and purcha~ersJ of hacksaw blade~ in said commerce, a certain catalog which contains the follow· }ncr representations concerning said blades= · ' · b, I f ' ., WHOLESALE RADIO SERVICE CO., inc. 157 155 Order HACKSAW BLADES Made of Tungsteel. Strictly First Quality Very t!exible. Fast cutting and long lived, Fully guaranteed. Shpg. wt. 1 lb.

Per doz. Stock No. Size Your cost JCP 14965 ____________ _ 8" 39¢ J(P 14966 ____________ _ 10" 49¢ JCP 14961------~----~· 12" 59¢ and in truth and in fact, said hacksaw blades did not and do not contain any tungsten metal at all, were and are not. first qu.ality and Were and are not flexible, fast cutting and long lived. PAR. 5. The acts and practices of the respondent in designating, advertising, and representing its hacksaw blades as hereinabove set forth are misleading and deceptive and have the tendency and capacity to and do confuse, mislead and deceive a substantial part of the users and purchasers of such blades into the erroneous belief that such hacksaw blades contain tungsten metal in proper content. The acts and practices of the respondent have the tendency and capacity to induce users and purchasers of hacksaw blades who desire blades containing tungsten metal to buy and use respondent's said hacksaw plades instead of blades which do contain tungsten lhetal in proper content, thereby substantially diverting trade to respondent from competitors of respondent who manufacture and sell hacksaw blades containing tungsten, and from competitors who lllanufacture and sell hacksaw blades which do not contain tungsten and who do not so misrepresent their products. PAR. G. The above acts and practices of the respondent are all to the injury and prejudice of the public and of the compeitors of respondent, and constitute unfair methods of competition within the intent and meaning of Section 5 of an Act of Congress approved September 26, 1914, entitled "An Act to create a Feder.al Trade Commission, to define its powers and duties, and for other purposes". ORDER TO CEASE AND DESIST This proceeding coming on for hearing by the Federal Trade Comlllission upon the record, including the complaint and the answer of the respondent, in which answer it waives hearing of the charges set forth in the complaint, refrains from contesting the proceedings, and, pursuant to Rule V of the Rules of Practice and Procedure~ Order 21 F. T.U.

eonsents that the Commission may make, enter, issue, and serve upon it, without trial, evidence, findings as to the facts, or other in· tervening procedure, an order to cease and desist from the violations of law charged in the complaint, and the Commission, having duly considered the matter, and being fully advised in the premises, finds that the respondent has violated the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to creat11 a Federal Trade Commission, to define its powers and duties, and for other purposes".

It is now ordered, That the respondent, Wholesale Radio Service Co., Inc., a corporation, cease and desist from using, directly or indirectly, the word, "Tungsteel", or a word or words of similar import or meaning, alone or in connection with any other word or words to brand, designate~ or describe hacksaw blades sold or offered for sale by it in commerce among the several States of the United States and in the District of Columbia, until and unless the steel from which such hacksaw bla,des are manufactured contains tungsten metal in such quantity and proportion as to be steel that is com· monly known and described as tungsten steel. It is further ordered, That the respondent shall, within 60 days after service upon it of a copy of this order, file with the Federal Trade Commission a report, in writing, setting forth in detail the manner and form in which it has complied with the order to cease .and desist hereinabove set forth.

GTIEENBERG & JOSEFSBERG, ETC. 159 Complaint