Plougii, Inc

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

IN THE MATTER OF PLOUGH, INCORPORATED COllfPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 15 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1014 Docket 281"1. Complaint, May 21, 1936-Decision, Dec. 7, 1936 \Vhere a corporation engaged in the distribution and sale of a certain acetyl sallcylic acid product under the desig·nation "St. Joseph Aspirin," in substantial competition with those likewise engaged in the distribution and sale of such products, uud including many who manufacture, distribute, and sell aspirin without misrepresenting the quality or character of their respective products or the effectiveness thereof in use for the treatment of various conditions of the body, and who do not falsely disparage such products of their respective competitors; in advertising the same in newspapers and periodicals of general circulation throughout the United States, together with featured display of the aforesaid name of its said product- (!l) Represented that same gave quicker relief than, and was superior to, other aspirin nnd was fully effective for pains lllld coldl'! nnd always brought prompt relief to those suffering therefrom, and that it exceeded in purity unu accuracy of ingredients the rigid stuudards .set by the Uniteu States Government, through such statements, in substance, as thus indicated, lll1d "llrings quicker relief", etc. ;

Facts being that it uoes not give quicker relief than other aRpirln of stnnuard quality that meets requirements of Unlteu Stutes Pharmacopoeia, is not fully effective for treatment of pains and colds and bas no effect on the causative factors thereof, its use does not always bring prompt relief to those suffering from conditions named, Goyernment hns no stipulated standards for aspirin, and specifications of the said Pharmacopoeia are minimum, with no upper limit, 'and its aforesaid representations anu statf'ments, with respect to nature and effect of Its sniu product, were exaggerated, mislcnding and untrue, and unfairly disparaged such products of Its competitors; and (b) Represented that the cellophane wrappings of the containers of its said aspirin protected the purity of snld prouuct nnd were materially beneficial thereto, and that such a prouuct required such wrapping under usual nnd normal conuitlons of sale to protect it from deterioration cnused by moisture, and that failure so to wrap such products decrcaseu their value or potency, through such statements as ''Purity further protecteu by moistureproof cellOilhane wrapping," and "to guard this purity further, each package is wrappf>d and sealed in moisture-proof cello11haue ;" Facts being asvlrln does not dissoh·e or deteriorate und!•r usual and customary methods of mC'rehandislng, and wrapping of the containers of such prouuet In moisture proof cellophane wrnprilng does not ndd to or protect the purity thereof and Is not mateJ·iully benefieial thereto, and failure of manufacturer or distributor of such products thus to wrap Sllme does not uerrease their \"value or pott>ncy;

With capnclty and tendency to mislead and deceive a substantial portion of purchasing public Into erroneous belief that Its said ''St. Jos<'ph Aspirin" 116 FEDERAL TRADE COM:l\IISSION DECISIONS Complaint 2-!F.T.C.

ga,·e quicl•er relief than other aspirin and bad the properties thus claimed and implied therefor as above set forth, and that aspirin requires such cellophane wrapping as above indicated, and further to mislead and deceive a substantial portion of such public into erroneous and mistaken beliefs that aspirin products of competitors were inferior to and less effective than its .said products for the reason they were not thus enclosed and for other reasons, and with result that 'a substantial number of the consuming public bought a substantial volume of its said product, and trade was unfairly diverted to it from competitors likewise engaged in distribution and sale of asrJirin and who trutbfully advertise and represent their products and the effectiveness thereo.f in use; to the injury of competition in commerce:

Ilcld, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before JJ!r. John J. [{eenan, trial examiner. J,f r. J. T. TV elch for the Commission.

Lalce-Spiro-Oohn and Goodman & GaZella, of Memphis, Tenn., for respondent.

Complaint 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, having reason to believe that Plough, Inc., a corporation, hereinafter referred to as respondent, has been and now is using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to the 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, Plough, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business located in the city of Memphis, State of Tennessee. Respondent is now, and has been for some years, engaged in the business of distributing and selling, in commerce as herein set out, a. certain acetyl salicylic acid product known as ''St. Joseph Aspirin." PAR. 2. Said respondent, being engaged in business as aforesaid, causes said aspirin, when sold, to be transported from its principal place of business in the State of Tennessee to purchasers thereof located at various points in other States of the United States and in the District of Columbia. Respondent now maintains, and has maintained at all times, a constant current of trade and commerce in said aspirin so distributed and sold by it, among and between the various States of the United States and in the District of Columbia. PLOUGH, INC. 117 115 Complaint PAn. 3. In the course and conduct of its said business, respondent is now, and has been, in substantial competition with other corporations, firms, and individuals likewise engaged in the business of distributing and selling acetyl salicylic acid products such as aspirin, in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 4. In the course and operation o£ said business, and £or the purpose of inducing individuals, firms, and corporations to purchase said St. Joseph aspirin, respondent has caused advertisements to be inserted in newspapers and periodicals of general circulation throughout the United States. In all of said advertisements, respondent has caused the name o£ said product to wit: St. Joseph aspirin, to be prominently and conspicuously displayed, together with the following statements:

(1) Brings quicker relief.

Fully effective for pains and colds.

CllUllenges the world in prompt pain relief. Stops pain promptly.

It always brings prompt relief from pain and colds. (2) Even exceeds In purity the rigid standards crf the United States Government.

So pure and accurate that It exceeds the rigid standards of the United States Government.

(3) Purity furtlJer protected by moisture proof cellophane wrapping. And to guard tllis purity further, each package is wrapped and sealed in moisture proof cellophane.

All of sai.d statements, together with many similar statements, appearing in respondent's advertisements purport to be descriptive of its product. In all of its advertising literature, the respondent represents, through the statements and representations herein set out and other statements of similar import and effect, that (1} St. Joseph aspirin gives quicker relief than, and is superior to, other aspirin; {2) that St. Joseph aspirin is fully effective for pains and colds and its use always brings prompt relief to those suffering from pain and colds; {3) that St. Joseph aspirin exceeds in purity and accuracy of ingredients rigid standards set by the United States Government; ( 4} that wrapping of containers for St. Joseph aspirin in cellophane wrappings protects the purity of, and is materially beneficial to, said aspirin; and ( 5) that aspirin requires wrapping in cellophane, under usual and normal conditions of sale, to protect it from deterioration caused by moisture and failure to so wrap aspirin products decreases their value or potency.

PAn. 5. The representations made by respondents with respect to the nature and effect of its aspirin when used are grossly exaggerated, Complaint 24F.T. C.

false, misleading, anu untrue. In addition, said representations and statements serve to, directly and by inference, disparage aspirin products of respondent's competitors. In truth and in fact, St. Joseph aspirin does not give quicker relief than other aspirin of standard quality and is not superior to other aspirin of standard quality. It is not fully effective for the treatment of pains and colds and has no effect on the causative factors of such conditions of the human body and its use does not always bring prompt relief to those suffering from the conditions named. The United States Government has not established standards for aspirin and such specifications for aspirin as are set out in the United. States Pharmacopoeia are minimum specifications and there is no upper limit thereof. In truth and in fact, aspirin does not dissolve or deteriorate under the usual and customary methous of merchandising and the wrapping of the container of said product in a cellophane wrapping does not add to or protect the purity of saiu product and is not materially beneficial to said prouuct. Failure to wrap aspirin in cellophane wrapping uoes not decrease the value or potency thereof.

PAn. 6. There are among respondent's competitors many who manufacture, distribute and sell aspirin who in no way misrepresent the quality or character of their respective aspirin or its effectiveness in use for the treatment of various conditions of the huJflan body and who do not falsely disparage the aspirin prouucts of their respective com· petitors.

PAn. 7. Each and all of the false and misleading statem~nts and rE.'presentations made by the respondent in designating and describing its product and the effectivenesss of its product, as hereinabove set out, in offering for sale and selling St. Joseph aspirin was, and is, calculated to, and had, and now has, the tendency and capacity to mislrad and deceive a substantial portion of the purchasing public into the er· roneous belief that all of said representations are true, and to the further erroneous belief that aspirin products of its competitors are inferior to and less effective than St. Joseph aspirin for tho reason that said products are not enclosed in cellophane wrappings and for otlwr reasons. Further, as a direct conse.'qucncc of the mistaken and erroneous beliefs, induced by the nets aml misrepresE'ntntions of the respondent, as hereinabove detailed, a substantial number of the consuming public has purchased a substantial volume of respondent's St. Joseph aspirin with the result that trade has been unfairly diverted to the respondent from competitors likewise engaged in the business of distributing and selling aspirin who truthfully advertise and represent their products and the effectiveness of said products in use. As a result thereof, injury has been, and is now being, done by PLOUGH, INC. 119 115 Findings respondent to competition in commerce among and between the various States of the United States and in the District of Columbia. PAR. 8. The above and foregoing acts, practices, and representations of the respondent have been, and are, all to the prejudice of the public and respondent's competitors as aforesaid, and have been, and are, unfair methods of competition within the meaning and intent of Section 5 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."

REPORT, FINDINGS AS TO Tile FACTs, AND ORDER 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 Fed- -eral Trade Commission, on May 21, 1936, issued and served its complaint in this proceeding upon respondent Plough, lnc., charging it with the use of unfair methods of competition in commerce in viola· tion of the provisions of said act. 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 James T. Welch, attorney for the Commission, before John J. Keenan, an examiner of the Commission theretofore duly <lesignated by it, and in opposition to the alleg~ttions of the complaint by Leo Goodman, attorney for the respondent; and said testimony and other evidence were 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 evidence; and the Commission having July 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 conclusion drawn therefrom: FINDINGS AS TO Tile FACTS PAR.\GRAPII 1. Respondent Plough, Inc., is a corporation, organized and doing business under and by virtue of the laws of Delaware. Its principal office and place of business is located in the city of Memphis, State of Tennessee. It has been, and is now, engaged in the business of distributing and selling, in commerce among and between the various States of the United States, a certain acetyl salicylic acid product designated by it as "St. Joseph Aspirin."

PAn. 2. 1Vhen orders are received for said aspirin, the respondent causes said product to be shipped from its place of business in the Findings 24F.T.C.

State of Tennessee to the purchasers thereof located at various points in other States of the United States and in the District of Columbia. Respondent has at all times maintained a constant current of trade in the aspirin distributed and sold by it, in commerce among and between the various States of the United States. PAR. 3. In the sale of said St. Joseph aspirin, Plough, Inc., is now, and has been, in substantial competition with other corporations and with firms and individuals likewise engaged in the business of distributing and selling acetyl salicylic acid products, such as aspirin, in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 4. For the purpose of inducing the purchase of St. Joseph aspirin, respondent has caused various advertisements to be inserted in newspapers and periodicals of general circulation throughout the United States. In all of said advertisements, it has caused the name of said product, to wit: 'st. Joseph Aspirin, to be prominently and conspicuously displayed, together with the following and many similar statements:

(1) Drings quicker relief.

l<'ully d'fective for pains and colds.

Challenges the world In prompt pain relief. Stops pain promptly.

It always brings prompt rell~>f from pain and coldi!. (2) Even exceeds in purity the rigid standards of the United States Government.

So pure and accurate that it exceeds the rigid standards of the United States Government.

(3) Purity further protected by moisture proof cellophane wrapping. And to guard this purity further, each package is wrapped and sealeu in moisture proof cellophane.

All of said statements, together with many similar statements, appearing in respondent's advertisements, purport to be descriptive of its product. In all of its advertising literature, the respondent represents, through the statements and representations herein set out and other statements of similar import and effect, that (1} St. Joseph aspirin gives quicker relief than, and is superior to, other aspirin; (2) that St. Joseph aspirin is fully effective for pains and colds and its use always brings prompt relief to those suffering from pain and colds; (3} that St. Joseph aspirin E-xceeds in purity and accuracy of ingredients rigid standards set by the United States Government; (4) that wrapping of containers for St. Joseph aspirin in cellophane wrappings protects the purity of, and is materially beneficial to, said aspirin; and ( 5) that aspirin requires wrapping in cellophane, under usual and normal conditions of sale, to protect it PLOUGH, INC. 121 115 Findings from deterioration caused by moisture and that failure to so wrap aspirin products decreases their value or potency. P .AR, 5. The aforesaid representations made by respondent with respect to the nature and effect of its aspirin product are exaggerated, misleading and untrue. In addition, said representations and statements serve to, directly or by inference, unfairly disparage aspirin products of respondent's competitors. St. Joseph aspirin does not give quicker relief than other aspirin of standard quality that meets the requirements of the United States Pharmacopoeia. It is not fully effective for. the treatment of pains and colds and has no effect on the causative factors of either pains or colds, but does possess analgesic properties. Its use does not always bring prompt relief to those suffering from the conditions named. The United States Government has no stipulated standards for aspirin. Such specifications for aspirin as are set out in the United States Pharmacopoeia are minimum specifications and there is no upper limit thereof. The requirements of the United States Pharmacopoeia are as follows:

Acetyl snlicylic acid when dried to constant weight over sulphuric acid contains not less than 9{).5 per cent of acetyl salicylic acid. (Page 14, Pharmacopoeia of the United States, 11 Decennial llevision.) St. Joseph aspirin docs exceed the requirements of the United States Pharmacopoeia in that it contains more than 99.5% of acetyl salicylic acid. .Aspirin does not dissolve or deteriorate under usual and customary methods of merchandising the product and the wrapping of the container of said product in a moisture proof cellophane wrapping does not add to or protect the purity of the product and is not materially beneficial to said product. The failure of the manufacturer or distributor of aspirin products to wrap said products in cellophane wrapping does not decrease the value or potency of said products.

l 1AR. 6. There are among respondent's competitors many who manufacture, distribute and sell aspirin who in no way misrepresent the quality or character of their respective aspirin or its effectiveness in use for the treatment of various conditions of the human body and who do not falsely disparage the aspirin products of their respective competitors.

PAR. 7. The various statements and representations made by the respondent in describing its product, St. Joseph aspirin, and the effectiveness of said product in use, have the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken beliefs (1) that St. Joseph aspirin gives quicker relief than other aspirin; (2) that St. Joseph aspirin Order 24F.T.C.

is fully effe~tive for pains and colds and its use always brings prompt relief to those suffering from pains and colds; ( 3) that St. Joseph aspirin exceeds in purity and accuracy of ingredients the rigid standards set by the United States Government; (4) that the wrapping of containers of St. Joseph aspirin in cellophane wrappers protects the purity of and is materially beneficial to said aspirin; and ( 5) that aspirin requires wrapping in cellophane under usual and normal conditions of sale to protect it from deterioration caused by moisture and that failure to so wrap aspirin products decreases their value or potency. Said representations and statements have also had the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken beliefs that aspirin products of its competitors are inferior to and less effective than St. Joseph aspirin for the reason that said products are not enclosed in cellophane wrappings and for other reasons. As a direct consequence of these mistakes and erroneous beliefs, a substantial number of the consuming public have purchased a substantial volume of St. Joseph aspirin with the result that trade has been unfairly diverted to the respondent from competitors likewiso engaged in the business of distributing and selling aspirin who truthfully advertise and repr!.'sent their products and the effectiveness of said products in use. As a result of the acts and practices, herein set out, injury has been, and is now being, done by respondent to competition in commerce among and between the various States of the United States and in the District of Columbia. CONCLUSION The aforesaid acts and practices of the respondent, Plough, Inc., &re to the pr!.'judice 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 Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its pO\vers and duties, and for other purposes." ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Com~ mission upon the complaint of the Commission, the answer of respondent, testimony and other evid£'nce tahn before John J. Keenan, an examiner of the Commission theretofore duly designated by it, in support of the nllrgations of said complaint and in opposition thereto, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provi- PLOUGH, INC. 123 115 Order sions of an Act of Congress approved September 2G, 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, I>lough, Inc., its officers, representatives, agents, and employees, in connection with the offering for sale, sale, and distribution of a certain acetyl salicylic acid product known as "St. Joseph Aspirin," in interstate commerce or in the District of Columbia, do forthwith cease and desist from representing either directly or by inference, through advertisements inserted in newspapers, magazines, and periodicals of general circulation, radio announcements, booklets, pamphlets, or other advertising literature, or through any other means:

1. that St. Joseph aspirin gives quicker relief than other aspirin; 2. that St. Joseph aspirin is fully effective for pains and colds, and is the best thing in the world to stop pain, and its use always brings prompt relief to those suffering from pains and colds; 3. that St. Joseph aspirin exceeds in purity and accuracy of ingredients, rigid standards set by the United States Government; 4. that wrapping of containers for St. Joseph aspirin in transparent cellulose film, commonly designated as cellophane, preserves or adds to the purity or the freshness of aspirin, or is materially beneficial to said aspirin;

5. that aspirin requires wrapping in transparent cellulose film, commonly designated ns cellophane, under usual and normal conditions of sale, to protect it from deterioration caused by moisture; G. that :failure to wrap aspirin products in moisture-proof transparent cellulose film, commonly designated as cellophane, decreases the value or potency of said aspirin.

It i8 further ordered, That the respondent shall, within GO 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.

124 FEDERAL TRADE CO.l\IMISSION DECISIONS Syllabus 24F. T. 0.