Garten Table Pad Co

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IN THE MATTER OF GARTEN TADLE PAD COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATI0l'( OF SEC, II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2132. Complaint, Feb. ZS, 1936-Dccision, Sept. 25, 1936 Where a corporation engaged in manufacture of two styles of table pads of similar size, slwpe, and general appearance, more costly of which had a bottom covering or back composed of genuine felt, or wool fibers or wool and cotton materials, matted together in layers, compressed and shrunk, and less costly of which had inferior cotton bottom covering or back of duvetyn, velourette, or velveteen, and in sale thereof to retail stores in District of Columbia and some thirty States for resale to purchasing and consuming public- Labeled as ''felted back" miniature pads or samples of latter style or quality, left by it for exhibition on retail stores' counters and display stands as basis for orders to be taken by retailer and forwarded to it for filling from its factory, along with "genuine felt" label samples of former, more costly w· style·, lth capacity and tendency to confuse, mislead, and deceive substantial number of purchasing public into belief that said "felted back" pads were backed with genuine felt Rnd with effect of causing such purchasing public to buy Substantial quantities thereof in such erroneous belief, and of unfairly diverting thereby trade to it from competitors, who do not in any way mi;;Tepresent material or materials from which their said pads are made; to their substantial injury and prejudice:

1 leld, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before Mr. Joseph A. Simpson, trial examiner. Mr. Dewitt T. Puckett for the Commission.

Complaint Pursuant to the provisions of an Act of Congress approved Sept~lllber 26, 1914, entitled "An Act to create a Federal Trade Commis- ;on, to define its powers and duties, and for other purposes," the ,.., ederal Trade Commission havinrr reason to believe that Garten J.abl n ' t:!> e J.-ad Company Inc. a corporation, hereinafter referred to as resp d ' ' . . . on ent, has been 1~Olll and is 1 usinrrt:!> unfair• • methods of ' competition' mt 0ti m:rce, as "commerce'' is defined m said act, and It appearmg b le .said Commission that a proceeding by it in respect thereof. wot~ld cheargIn the· public interest ' hereby issues its complaint, stating Its p es In that respect as follows: . c ARAGRAPU 1. Respondent Garten Table Pad Company, Inc., 18 a orporation organized, existing, and doing business under and by CO~IMISSION DECJSIO:NS 512 FEDERAL TRADE Complaint 23 F. 'l~. C. virtue of the laws of the State of Pennsylvania, with its principal office at 131 Market Street, Philadelphia, Pa. It is now, and for several years last past has been, engaged in the manufacture and sale of table pads between and among the various States of the United States and in the District of Columbia. Respondent now causes, and for more than one year last past has caused, such products when sold by it to be shipped from its place of business in Philadelphia, Pa.r to the purchasers thereof, some located in the State of Pennsy lvaniar and others located in the various other States of the United States and in the District of Columbia, and there is now, and has been for more than one year last past, a constant current of trade and commerce by the respondent in table pads between and among the various States of the United States and in the District of Columbia. Respondent is, and for more than one year last past has been, in substantial competition with other corporations, and with individualsr firms, and partnerships engaged in the sale of table pads between and among the various States of the United States and in the District of Columbia.

PAn. 2. In the course and conduct of its business, as described in paragraph 1 hereof, respondent, in the sale and offering for sale of certain table pads manufactured by it, represents, and for more than one year last past has represented, through circulars distributed among the retail trade, that the pad it offers for sale and sells has "a soft back covering that will not harm the polished surface of ll table. Can be had in a felted or genuine felt back, depending on the quality of the pad." Respondent also furnishes its customers located in different States of the United States and in the District of Columbia with samples of its said table pads for display, which samples are displayed by said customers in soliciting orders for, and in the sale of, said pads to the purchasing public. Stickers or labels affixed to said display samples and also to the pads sold to the ultimate purchasers carry, in part, the following phraseology: MONOPAD WASHABLE LF.ATHEHETTE TOP (Guaranteed to be a Pyroxilyn Coated Fabric) FELTED BACK (CI.Jolce ot Meadow Green or Furniture BroW'Jl) In truth and in fact, the padding or back covering of said table pads is not composed of or made of felt as the term "felt" is und~r­ stood, used, and accepted by the retail trade and the purchasing publlc, GARTEN TABLE PAD CO. 513 511 Findings hut the said padding is or back covering is composed of or made of a material or materials other than felt.

PAR. 3. Genuine felt is a fabric made by interlocking or matting together wool, hair, or fur, or a mixture thereof, by the action of heat, moisture, and pressure, without weaving, and often with the aid of glue. The term "felted" is applied to woven fabrics which have been ~ubjected to a napping and felting process to make a more closely lmitted material which has somewhat the appearance of genuine felt. . To the purchasing public and to many wholesale and retail buyers the terms "felt" and "felted", when applied to fabrics, are synonymous. It is generally understood and commonly believed among whole- ~alers, retailers, and the purchasing public that genuine felt table pads are the best pads obtainable and due to such belief and understanding tltere is a widespread public demand for and general use of genuine felt pads.

PAR. 4. The use by the respondent of the representations set out in paragraph 2 hereof, has had and does have the capacity and tendency to mislead and deceive, and does mislead and deceive wholesalers, retailers, and the purchasing public into the belief that said table Pads are made of felt, and to purchase substantial quantities of said Pads from respondent in such erroneous belief. Dy said practices, lespondent also places in the hands of wholesalers and retailers the lneans whereby "felted" table pads are passed off to the purchasing· Public as genuine felt pads. There are among the competitors of r:spondent as mentioned in paragraph 1 hereof, manufacturers and c:hstributors of genuine felt table pads who do not misrepresent the rnaterial or materials contained in their table pads or the process by \\:which their pads are manufactured who likewise advertise, sell, and <b;;tribute table pads among the va~ious States of the United States. and in the District of Columbia. Dy the representations aforesaid, trade is diverted to respondent from such competitors; thereby substantial injury is being' and has been done by respondent to sub- "ta f ol ' ~ n 1al competition in commerce as hE>rein set out. PAn. 5. The above alleged acts and practices of respondent are all to. the prejudice of the public and respondent's competit?rs, an~ con- Stitute unfair methods of competition in commerce withm the mtent: nnd meaning of Section 5 of an Act of Congress entitled "An Act to. create a Federal Trade Commission to define its powers and duties. and f ' or other purposes," approve>d SE>ptember 26, 1914. REPORT, FINDINGS AS TO Tile Facts, AND Onder Pursuant to the provisions of an Act of Conrrress approved Septem- be 2 o .. r 6, 1!!14, entitled "An Act to create a Federal Trade CommlsHon .. :514 FEDERAL TRADE COMl\lis!:;ION DECISIONS Findings 23 F. '1'. C. to define its powers and duties, and for other purposes," the Federal Trade Commission, on February 28, 1936, issued and served itr com- ;plaint in this proceeding upon respondent, Garten Table Pad Company, a corporation, charging it with the use of unfair methods of ·competition in commerce in violation of the provisions of said uct. .After the issuance of said complaint, and the filing of respondent's answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by De Witt T. Puckett, attorney for the Commission, before Joseph A. Simpson, an examiner . •of the Commission theretofore duly designated by it, and in opposition to the allegations of the complaint by M. S. Garber, attorney for the respondent; and said testimony and other evidence '"ere duly .recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission •on the said complaint, the answer thereto, testimony and other rvi- ·dence, and brief in support of complaint, respondent having declinerl to file brief or apply for oral argument; and the Commission having duly considered the same, and being now 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 its conclusjon drawn therefmm: FINDINGS AS TO THE !•'ACTS PARAGRAPH 1. Respondent, Garten Table Pad Company, is a corporations organizeu in April 1932, and doing business undrr the laws of the State of Pennsylvania, having its principal office and place of business at 131 Market Street, in the city of Philadelphia, State of Pen nsy Ivania.

PAn. 2. Respondent is, and has been at all times since the said date ·of its incorporation, engaged in the manufacture and sale of table pads to retail stores located in the District of Columbia and in about thirty States of the United States of America, for resale to the pur- -chasing and consuming public. It has caused, a11u still causes, its said table pads, when so sold, to be transported in commerce from its place <Of business in the city of Philadelphia, State of Pennsylvania, mto and through certain other States of the United States and into ihc District of Columbia, to the said purchasers thereof. PAR. 3. At all times since April 1932, the respondent has been in -direct and substantial competition in interstate commerce with other -<~orporations, individuals, and partnerships engaged in the manufac· ture and sale of table pads as aforesaid.

PAR. 4. Table pads are used to protect the table surface from hot <lishes, and in constructing pads for that purpose it is necessary ihat r GARTEN TADLE PAD CO. 515 Findings f ' .said pads ha.ve a certain amount of insulation value. Insulation is usually accomplished by building up certain thickness of cardboard, alone or in combination with material known as deadening felt. These materials are then covered on both sides; the top by waterproof washable fabric, and the bottom or back with a soft fabric that will not damage the surface of the table.

Respondent man u:factures and sells two types of table pads. The -construction and materials used in both types are substantiaHy the same with one exception. The exception is in the materials used as the bottom covering or back of the pads. In one type of pad the bottom covering or back is felt, a material produced from wool fihres, or Wool and cotton materials, which have been matted together in ~ayers, compressed, and shrunk. In the other type, the bottom ~over­ Ing or back is a cotton goods material or sheeting that is converted by several processes into a soft fabric, known variously as duvetyn, v~Iourette, or velveteen, which is inferior in quality to felt. Felt is <hstinguished from other materials, and especially the materials used b! respondent in its pads labeled "felted back", :not only by the materials used in its manufacture but also by the distinctive process of manufacture. The pad with the felt back sells for $3.98 to $4.98, retail. The price of the pad backed with the materials other than felt ranges from $2.98 to $3.98, retail. The two types of pads are almost ~identical in size, shape, and general appearance. The only lllatenal difference is in the type and quality of the backing. • PAR. 5. Respondent contacts retail stores, through which it markets Its pads, in two ways. One method is by mail, enclosing a description of Its pads, price lists, and an inducement to buy respondent's pads. This inducement usually takes the form of an offer to cooperate in advertising costs. The other plan is to have the salesmen call on retail stores aild submit the plan and samples.

Sample pads, miniatures of the pads sold, are exhibited· on the counters and display stands in the retail stores. Orders for the table Pads, based upon the samples so exhibited, are taken by the retailer and forwarded to the respondent manufacturer, who fills the orders from its factory. Respondent sold over $50,000 worth of pads in 1935, and its business has increased annually since its beginning. . Until September 1935, the miniature pads, or samples, exhibited ~n the retail stores, and from which orders were taken, bore gumack labels. The sample pad with the genuine felt back bore a label about three by eight inches in size on which appeared the following: MONOPAD WASHABLE LL\THERETO'l'E TOP ' GENUINE FELT BACK ' I 7S035m--30--vol.23----35 Order 23 I!'. T. C. The sample pad with the cotton goods back bore a label about three by eight inches in size on which appeared the following: MONOPAD WASHABLE LEATHERETTE TOP FELTED BACK To experts, buyers, and members of the purchasing and consuming public, the terms "felt" and "felted" are synonymous. To buyers and the average purchaser-consumer a table pad labeled "felted back" means a table pad with a genuine felt back. PAR. 6. The representations of respondent, as aforesaid, have had, and do have, the capacity and tendency to confuse, mislead, and deceive a substantial number of the purchasing public into the belief that said table pads labeled "felted back" are backed with genuine felt, and have caused, and do cause, said purchasing public to purchase substantial quantities of respondent's pads in such erroneous belief. PAR. 7. There are, among competitors of respondent, corporations and individuals who likewise manufacture and sell table pads among the various States of the United States and in the District of Columbia, who do not in any way misrepresent the material or materials from which their table pads are made. Respondent's acts and practices, as liereinabove set forth, tend to, and do, unfairly divert trade to respondent from such competitors, to the substantial injury and prejudice of said competitors.

CONCLUSION The aforesaid acts and practices of the respondent, Garten Tablo Pad Company, are to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce, within the intent and meaning of Section 5 of an Act of Con· gress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and fo~· 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 respondent, testimony and other evidence taken before Joseph A. Simpson, an examiner of the Commission theretofore duly designated by it, in sup· port of the allegations of said complaint and in opposition thereto, brief filed herein in support of the complaint, respondent having declined to file brief or apply for oral argument, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of an Act of Congress approved GARTEN TABLE PAD CO. 517 511 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 ordered, That the respondent, Garten Table Pad Company, a corporation, its officers, representatives, agents, and employees, in con- ~ec~ion with the offering for sale, sale, and distribution of table pads ln Interstate commerce or in the District of Columbia, do forthwith cease and desist from representing, through the use of labels or <Jtherwise :

That said table pads are backed with felt when said pads are not hacked with felt, a material produced from wool fibres, or wool and cotton materials, which have been matted together, compressed and shrunk.

it is further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in \Writing setting forth in detail the manner and form in which it has complied with this order.

COMl\IISSIO~ DECISIONS518 FEDERAL TRADE Syllabus 23F.T.C.