Tolpin Studios, Inc.

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IN THE MA'ITER OF TOLPIN STUDIOS, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD 'fO THE ALLEGED VIOLA1'!0N OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2950. Complaint, Oct. 16, 1.936-Decision, July 1, 1931 Where a vitreous, translucent, and glazed ware designated, described, and known as china, was and had been, for some Hio years, made at Limoges, France, and had long been exported th!'refrom into the various countries of Europe and America, and particularly into the United States, and bad acquired a favorable reputation in the latter country as a china of utility and beauty, and bad come to possess a goodwill which developed an increasingly popular demand for the products of said city, and china made at said city and imported into the United States had long been widely and generally known as Limoges china, and word "Limoges" applied to and used in describing or designating china or chinaware had long since come to signify and mean, and still signified and meant, china made at Limoges in France; and thf>reafter, a corporation engaged in proccs"ing and decorating foreign and domestic made, und!'corated china or cllinaware products, and in offering, selling and distributing certain of its dec· orated china or chinaware products to wholesale and retail dealer~. including department stores and auctioneers, and purchasers thereof in various Statesllranded, imprinted, and otherwise caused to appear, words and description "Limoges" and "French Decoration" on its said products, notwithstanding fact products thus described and rc:ferred to were not, as thus repreHI'nted, made in, and did not originate in Limoges, France, but were obtained by it from other countries, and said products were not decorated in France or with French designs and decorations peculiar to country of E'rance and French artistry;

With result of placing in the hands of dealers selling its products meiUJS bY which to mislead and deceive consuming public into purehnse of its chinll or chinuware products, and with tendency and capacity to mislead and deceive, and with effect of misleading and deceiving, memb!'rs of public and of retail trade into raise and erroneous belief that representations thus made by said branding and imprinting were true, and· that products thus represented as "Limoges" originated and were made in said city, and that products r!'presented by words "French Decoration" were dec· orated in France and with French designs and decorations, as above set forth, and of thereby causing members of public and of retail trade to buy and denl in its products in lieu and in place of competing products of com· petitors, and of thus diverting trade to it from its competitors who do not misbrand, or falsely and misleadingly label, mark, or otherwise mis· represent their pt·oducts:

llcld, That such actr and practices were to the prejudice of the public and com· petitors and constituted unfair methods of competition, Defore 11/r. Robert S. Hall, trial examiner. Mr. Jay L. Jackson for the Commission.

TOLPIN STUDIOS, INC. 457 45G Complaint COMPLAINT Pursuant to the provisions 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," the Federal Trade Commission having reason to believe that Tolpin Studios, Inc., a corporation, hereinafter designated 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 charge in that respect as :follows:

PARAGRAPH 1. Respondent, Tolpin Studios, Inc., is now, and since 1927 has been, a corporation organized, existing, and doing business under and by virtue of the laws of the State o£ Illinois. Its office and principal place of business are located at 2129 'Vest Van Duren Street in the city of Chicago in said State. It has been since its ~aid organization, and now is, engaged in purchasing and decorating llnpol'ted china and chinaware, and in its sale to wholesale and retail dealers, including department stores and auctioneers, in commerce between aud among the State of Illinois and the various other States of tlle United States and the District of Columbia. It transports from its said place of business or causes to be transported therefrom, such china and chinaware when sold, to purchasers in the various States of the United States other than the said State of Illinois and in the District of Columbia.

In the course and conduct of its said business, respondent has ?een and is in substantial competition in interstate commerce with Individuals, partnerships, and corporations engaged in offering for sale and selling china, chinaware, earthenware, glassware, and other Pottery in like commerce.

PAn. 2. There is now, and for more than one hundred and fifty Years approximately there has been manufactured at Limoges, in France, a vitreous, translucent, and glazed ware which is now, and has been during said period of time, designated, described, and known as china by reason of its original or initial manufacture in C~lina before its introduction into Europe. In the early part of the Nineteenth Century, china, as it gradually came to be called, began to be exported from Limoges in France, into the various countries of Europe and America and particularly into the United States of. America and into and through the several States thereof. Such ~I?a inunediately thereupon acquired a favorable reputation in the lated States, as china of utility and beauty resulting in the estab- 458 FEDERAL TltADE COMl\IISSION DECISIONS Complaint 25F. T.C. lishmcnt of a goouwill which developed from time to time an increas· ing popular demand for the pr·oducts of Limoges. In 1!>27 when re· spon<lent was incorporated, this china manufactured at Limoges in France and imported into the United States had long been widely and generally known as Limoges china. The word "Limoges" applied to, or used in describing or designating china or chinaware, had for many years theretofore come to signify and mean, and ever since has signified and meant, and now signifies and means, china manu· factured at Limoges, France.

PAR. 3. In the course and conduct of its business, it has been and is the practice of respondent to buy china and chinaware which is imported by it directly, or is purchased from the importers thereof. Said china and chinaware are produced in Japan, China, Czecho· slovakia, and other countries, plain and undecorated, and are known and described by the trade as "blanks." Thereupon the respondent decorates such imported products and imprints, stamps, paints, or otherwise impresses on some of it, or causes it to bear pictorial repre· sentations of French scenes arid designs or other decorations illustra· tive or suggestive of Limoges china or chinaware, or characteristic of France and causes the same to bear the following or simihtr legends:

Limoges French Decoration Hand-painted Respondent has also offpred for salr and sold otlwr china, and china ware decorated by it with scenes painted thereon suggestive and characteristic of countries in which it was neither produced nor decorated.

In truth and in fact, the china and chinaware decorated by respondent and bearing the legend Limoges French Decoration Hand-painted have not been and are not produced in Limoges, France or in any other part of France, have not been and are not Limoges china ot' china ware, have not been and are not decorated or painted in France, but in the United States of America. The so-called "blanks" so dec· orated by respondent have been cheaper or less expensive for deco· rating purposes than Limoges china or chinaware. Respondent has been enabled by such practices, that is to say, by selling us and for I..imogcs china or chinaware so-called "blanks" produced in other TOLPIN STUDIOS, INC. 459 451) Complaint countries than France and uecoratetl by it in the United States, to derive a more substantial profit than could have been acquired or ~lcrived by it if the china or chinaware offered for sale and sold by It had been Limoges china or chinaware decorated or hand-painted at Limoges, France.

It has also been one of the practices of respondent to remove, erase ur eliminate from so-called ''blanks" or to cover with a design of some kind, the word or words stamped or appearing on such blanks or undecorated china or chinaware, indicating, as required by law, the country in which such china or chinaware originated or was produced. lly this practice respondent has been enabled to evade, prec~ude, and nullify the purpose of the law by concealment or supres- 81011 of the origin of such china or china ware or of the place of its manufacture or production, and more easily to convey the impression that it is Limoges china or chinaware and has been painted and dec- ~rated at Limoges or elsewhere in France, or that it has been pro- ~ Heed and dec01'ted in the country or countries, suggested or indicated Y scenes painted thereon typical or characteristic of such country or countries.

PAn. 4. In competition "·ith respondent there are now and for several years last past have been individuals, partnerships, and cor- ~ora~ions offering for sale a~1d selling. Limoges china o~ chinawa_re, ·1 ~c?Iated and undecorated, m the Umted States and still other m- ~ IVIduals, partnerships, and corporations offering for sale and sellll1g china or chinaware, decorated and undecorated, produced in ~~e United States and in other countries of Europe and Asia than ~ranee, who have truthfully represented, stamped, branded, and ( escribed it.

PAn. 5. The aforesaid practices of respondent described in par- ~graph 3 hereof, have had and have, and each of them has had and /as, the capacity and the tendency to mislead and deceive, have mised and deceived, and do mislead and deceive the purchasing or con- ~llrning public into the belief that the china or chinaware offered . or sale and sold by respondent described and designated as in parltgraph 3 hereof, has been produced at Limoges, France, and has );len decorated, processed and painted in Limoges, France, and that (i ler china and china ware offered for sale a ncl sold by it was pro- ( ~lceu in the country suggested by scenes painted thereon typical characteristic of such country, and in the purchase of such china. t!t·{hinaware in reliance upon such erroneous belief or beliefs. , h~ aforesaid practices of respondent have had, and have the ~~Pac1~y and tendency to, and do, unfairly divert trade to respondent lorn lts competitors mentioned in paragraph 4 hereof, and, as a 460 FEDERAL TRADE COl\11\IISSION DECISIONS Findings 25 F. T. C'. result, of such practices of respondent injury has been and is being done to such competitors in commerce among and between the various States of the United States.

PAR. 6. The aforementioned methods, acts, and practices of respondent are all to the prejudice of the public and respondent's competitors as hereinabove alleged. Said methods, acts, and practices constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of an Act of Congre.ss, entitled "An Act to create a Federal Trade Commission, to define its powers nnd duties, and for other purposes," approved September 26, 1!)14. REPORT, FINDINGS AS TO THE 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 Federal Trade Commission on October 16, 1936, issued, and on October 19, 1936, served, its complaint in this proceeding upon respondent, Tolpin Studios, Inc., charging it with the use of unfair methods of competition in commerce in violation of the provision~ of said act. After the issuance of said complaint and the filing of respondent's answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of the complaint to be true, except the allegations of the ·last sub-paragraph of paragraph 3 of said complaint, and waiving the taking of further evidence and all other intervening procedure, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said comphtint and tho substitute answer, briefs, and oral arguments having been waived, 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 f11cts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Tolpin Studios, Inc., is a corporation (Jrganized and existing under and by virtue of the laws of the State of Illinois, with its principal place of business located at 2120 West Van Buren Street, in the city of Chicago of said State. PAn. 2. Said respondent engages, and prior and subsequent to the 16th day of October 1036, has been engaged, in the business of TOLPIN STUDIOS, INC. 461 456 Fin<.lings Processing and decorating foreign and domestic made undecorated cl_1ina or chinaware products, and in selling, offering for sale, and distributing the same in commerce among and between the various States of the United States, and in the District of Columbia, and has caused, and now causes, said products, when sold or ordered, to be shipped and transported from the State of Illinois to various States of the United States other than the State of Illinois, and to an_cl in the District of Columbia, in the course and conduct of which 8~Id respondent has been, and is, in competition with other corpora- ~Ions, firms, partnerships, and individuals engaged in the sale, offer- Ing for sale, and distribution of de~orated china or chinaware prod- ~t~ in commerce among and between the various States of the l1'Ited States, and in the District of Columbia. PAR. 3. There is now, and for more than one hundred and fifty ~ears approximately there has been, manufactured at Limoges, in l i ranee, a vitreous, translucent, and glazed ware which is now, and ~as been during said period of time, designated, described, and Cn~wn as china by reason of its original or initial manufacture in N~llna before its introduction into Europe. In the early part of the . tneteenth Century, china, as it gradually came to be called, began to be exported from Limoges in France, into the various countries of Europe and America and particularly into the United States of ~~erica and into and through the several States thereof. Such clllna immediately thereupon acquired a favorable reputation in t le United States as china of utility and beauty resulting in the esta?Iishment of a goodwill which developed from time to time ~n Increasing popular demand for the products of Limoges. In 927, when respondent was incorporated, this china manufactured ~tt Limoges in France and imported into the United States had ,;~g been widely and generally known as Limoges china. The word l .11noges" applied to, or used in describing or designating china or c llnaware, had for many years theretofore come to signify and Inea.n, and ever since has signified and meant, and now signifies and lllean. h' . F P s, c ma manufactured at Limoges, ranee. b An. 4. In the course and conduct of respondent's business, as11 ov: described, respondent offered for sale, sold, and distributed ~e~aln. ~f its decorated china or chinaware products to wholesale n retail dealers, including department stores and auctioneers, and1l~~rchasers thereof in various States of the United States, on which . loducts respondent branded, imprinted, and otherwise caused to lfPear, the words and description "Limoges" and "French '"ecoration," thereby representing that the products bearii;g the Ord "Limoges'' originated and were made in the city of Limoges 462 FEDERAL TRADE COl\Il\IISSION DECISIONS Order 25F. T. C.

and the country of France, and that the products bearing the words and description "French Decoration" were decorated with French Llesigns and. decorations rwculiar to the country of France and to Fr('nch artistry and that the f:oiame were decorated in France; whereas, C'ontrary to the representations so made, respondent\; products so described and referred to were not made and did not originate in Limoges, France, but were obtained by respondent from countries other than the country of France, and the same were not decorated in France or with French designs and decorations peculiar to the country of France and French artistry.

PAR. 5. The branding, imprinting, and representations of respondent, as described and referred to in the foregoing paragraphs, have placed and place, and each of them has placed and places, in the hands of dealers selling the products of respondent the means by which to mislead and deceive the consuming public into the purchase of respondent's china or chinaware products, and the same have had and have, and each of them has had and has, the tendency and capacity to mislead and deceive, and did and do mislead and deceive, members of the public and of the retail trade into the false and erroneous belief that the representations made by said branding or imprinting nre true and that the products so represented as "Limoges" originated and were made in Limoges, France, and that the products so represented by the words "French Decoration" were decorated in France and with French designs and decorations peculiar to the country of France and French artistry, all thereby causing members of the public and of the retail trade to buy aud deal in prod· ucts of respondent in lieu and in place of competing products of competitors of respondent, in consequence of which trade has been and is diverted to respondent from its competitors who do not mis~ brand or falsely and misleadingly label, mark, or otherwise represent their products.

CONCLUSION The aforesaid acts and practices of the respondent, Tolpin Studios, Inc., 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 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 This proceeding having been heard by the Federal Trace Com· mission upon the complaint of the Commission and the answer filed TOLPIN STUDIOS, INC. 463 45G herein on l\lay 21, 1V37, by respondent admitting all the material allegations of the complaint to be true, except the allegations of the last sub-paragraph of paragraph 3 of said complaint, and waiving the taking of further evidence and all other intervening procedure, 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 September 2G, 1914, entitled "An Ad to create a Fefleral Trade Commission, to define its powers and duties, and for other purposes."

It{~ ordered, That the respondent, Tolpin Studios, Inc., its officers, ~·representatives, agents, and employees, in connection with ihe offer- Ing for sale, sale, and distribution of china or chinaware products in interstate commerce, or in the District of Columbia, do forthwith cease and desist from:

1. Bmnding, labeling, marking, or otherwise causing the word "Limoges" to appear on china or chinaware products of respondent, or in any way representing said products, or causing said products to be represl'nted, as Limoges china or chinaware when such prodllcts hare not ha<l their origin and have not been manufactured in the city of Limoges, in the country of France; 2. Branding, labeling, marking, or otherwise causing the words ''French Decoration" to appear on china. or chinaware products of l'P!'ipondent, or in any way representing said products, or causing said products to be represe:>nted, as products decorated in France or with French designs and decorations peculiar to the country of ~ranee and to French artistry when such products were not decorated In France and the designs and decorations appearing thereon were llot and are not French designs and decorations peculiar to the country of France and to French artistry.

It is further 01·dered, 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.

l::i8121"'-30-32 Syllabus 2GF. 'I'. C.