Donahue Advertising Co.

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IN THE :MATTER OF EASTERN PHARMACAL COMPANY, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1014 Doclcet 2948. Comptaint, Oct. 16, 1936-Decision, July 19, 1931 'Where a corporation engaged in distribution and sale of a certain liquid pharmaceutical product, in substantial competition with others engaged in distribution and sale of acetyl salicylic acid products, such as aspirin, in commerce among the various States and in the District o! Columbia, and including among such competitors those who make, sell and distribute acetyl salicylic acid products, such as aspirin, as above set forth, without in any wise misrepresenting the composition, nature, quality, or effectiveness of their products- Made use of name "Aspiral" in designating its said product in advertising literature of various types circulated to prospective purchasers, and featured said name on the cartons in which its said product was displayed for sale to purchasing public, anq set forth in its advertising literature that its said "Elixir Aspiral offers the better way of prescribing aspirin," facts being its said "Aspiral" was neither true acetyl salicylic acid nor aspirin, as commonly designated and long, well, and favornbly known to drug trade and to purchasing public as meaning acetyl salicylic acid preparation of recognized merit and value;

'With capacity and tendency to mislend and deceive substantial number of purchasing public into erroneous and mistaken belief that said product was aspirin and designed and intended for treatment of same ills and conditions as aspirin, and that it contained all ingredients contained in aspirin, and with effect of causing a substantial volume of such public to buy substantial volume of its said product on account of such belief, and of causing an unfair diversion of trade from, and otherwise substuntially injuriug, competitors in commerce :

1Icld, That such acts and practices were all to the prejudice of the public and competitors and constituted unfair methods of competition. Defore Mr. John J. [{eenan, trial examiner. Nr. Norton Nesmith for the Commission.

Nr. George ll. Rosen, of New York City, and Air. Isaac Silbernwn, of Monticello, N. Y., for respondent.

Complaint t Pursuant to the provisions of an Act of Congress approved Sepe~nber 26, 1914, entitled, "An Act to create a Federal Trade Com· ~Ission, to define its powers and duties, and for other purposes," e Federal Trade Commission, having reason to believe that East· ~rn Pharmacal Company, Inc., hereinafter referred to as respondent, as been and now is using unfair methods of competition in com· 580 :FEDERAL TRADE COMl\IISSION DECISIONS Complaint 25F. T. C. merce 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 hs complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respon<lent, Eastern Pharmacal Company, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business at 151 Ludlow Street, Yonkers, N. Y. nespondent is now, and has been for some time, engaged in the busi~ ness of distributing and selling, in commerce as herein set out, a certain product designated by it as "Aspiral." It causes said product, when sold, to be transported from its principal place of business in the State of New York to purchasers thereof located at various points in other States of the United States and in the District of Columbia. It has, at all times since its incorporation, maintained<l a constant current of trade in the product distributed and sold by it, in commerce among and between the various States of the United States and in the District of Columbia. In the course and conduct of its business, it is now, and has been, in substantial competition with other corporations and with firms and individuals eugaged in the business of distributing and selling acetyl salicylic acid products such as aspirin, in commerce among and between tho various States of the United States and in the District of Columbia. PAn. 2. In the course and operation of its business, anJ for the purpose of inducing individuals, firms, and corporations to purchase said "~\.spiral," respondent has caused advertising literature of various types to be circulated, through the United States mails and through other means, to prospective purchasers of its product. In said advertising literature, the product is designated by the re· spondent as "Aspiral" and the following statement is also used: Elixir ARpiral offers the better way ot pre~crlbing aspirin. On the cartons in which said product is displayed for sale to the purchasing public, the product is also designated by the 11an1e "Aspiral" appearing in large and conspicuous letters. The state· ment, hereinabove set out, appearing in respondent's advertising' matter, together with the respondent's use of the name "Aspiral" to designate its product, and other similar statements and designa· tions, serve as representations on the part of the respondent to the effect that the product designated by it as "Aspiral" is in fact· aspirin, or the same as aspirin, and is designed and intended for similar usage.

EASTERN PHARMACAL CO., INC. 581 -579 Complaint PAR. 3. For a number of years, various competitors of the respon· dent have been manufacturing, distributing, and selling a certain Pharmaceutical preparation, acetyl salicylic acid, commonly des· ignated as aspirin. Through use, over a period of many years, this product has become well and favorably known to the drug trade and to the purchasing public under the designation aspirin. It has been, and now is, generally used in the treatment of certain ills and conditions of the human body and in relieving the pain attendant to certain ills and conditions of the human body. The word "aspirin," When used in connection 'with pharmaceutical preparations, means, and the public well understands it to mean, that the product being referred to is an acetyl salicylic acid preparation and is of recognized Jnet·it, as herein detailed.

PAR. 4. The representations made by the respondent with respect to the nature of its product are false, misleading, and untrue. In ~ruth and in fact, respondent's product, designated by it as "Aspiral," ~s not an acetyl salicylic acid product, is not the same as aspirin and ls not designed ancl intended for .all of the usages for which aspirin tnay be used.

PAn. 5. The use by the respondent of the statements and represen· tation, hereinabove spt out, and the use of the designation "Aspiral" to describe its product, have the capacity and tendency to, alll do, Inislead and deceive the purchasing public into the erroneous and :nistaken belief that said product is aspirin and is designed and Jntende<l for the treatment of the same ills and conditions of the ~ltunan body as aspirin and that said product contains all of the Ingt·edients contained in aspirin. Acting in said beliefs, induced as aforesaid, a substantial portion of the purchasing public has PUl'chasecl a substantial volume of respondent's product on account of such beliefs. As a result thereof, trade is unfairly diverted to the respondent from competitors engaged in the distribution and sale of acety I salicylic acid products, commonly designated as aspirin, '"ho truthfully advertise and represent the nature and effectiveness of said products. In consequence thereof, injury has been, and is 110\V being, clone by the respondent to competition in commerce Utnong aJtd. between the various States of the United States and in the District of Columbia .

. PAn. G. The above and foregoing acts, practices and I_'epresenta· ~:ons of the respondent have be~n, and are, all to the prejudice of te public and. respondent's competitors as aforesaid, and constitute u_nfair methods of competition within the meaning and intent of Sec· tion 5 of an Act of Congress approved September 2G, 1914, entitled Findings 25F.T.C.

"An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

REPORT, FINDINGS AS TO THE FACTs, AND Onder 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 aml duties, and for oth£'r purposes," the Federal Trade Commission issued and served its complaint upon the respondent herein, Eastern Pharmacal Company, Inc., a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, charging said respondent with the use of unfair methods of competition in commerce in violation of the provisions of said act.

The respondent having entered its appearance and having filed its answer herein did on the 21st <lay of June 1937, the date set for hearing, execute its motion to withd.raw said answer and file » consent answer attached to said motion waiving hearing on the charges set forth in the complaint and consenting that without further evidence or other intervening proced.ure the Commission may issue and. serve upon it findings as to the facts and conclusion drawn therefrom, and an order to cease and desist from the viohttions of law charged in the complaint. Contemporaneously respondent entered into a stipulation as to the facts which stipulation was dictated into the record. All of this was done, of course, subject to the approval of the Commission:

And, thereupon, this proceeding came on for final hearing and the respondent having waived the filing of briefs and oral argument herein before the Commission, and the Commission having approved and accepted said stipulation as to the facts and having duly considered the record and being fully advised. in the premises, mal.:cS this its findings as to the facts and conclusion drawn therefrom: FINDINGS AS TO TIIE FACTS PARAGHAI'II 1. The respondent, Eastern Pharmacal Company, Inc., was incorporated under and by virtue of the laws of the State of New York in 1031. Its principal office and place of business is located at 1 Herriot Street, Yonkers, N. Y. The respondent is now and has been for some time engaged in the business of distributing and selling in commerce a certain pharmaceutical prod.uct designated by it as ''Aspiral." This product has been and is now sold and transported by the respond.ent in substantial quantities in commerce among' nnd between the several States of the United States and in the Dis- EASTERN PHARMACAL CO., INC. 583 ii79 Findings trict of Columbia. It has at a.U times since its incorporation maintained and still maintains a constant current of trade in "Aspiral" in {;commerce among and between the various States of the United States and in the District of Columbia. The respondent sells its product -designated as "Aspiral" in substantial competition with other corporations, firms, and individuals 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 Statei'J and in the District of Columbia.

PAn. 2. In the course and operation of its business, and for the purpose of inducing individuals, firms, and corporations to purchase said "Aspiral," respondent has cause<l advertising literature of various types to be circulated through the United States mails and through other means to prospective purchasers of this product. In this advertising literature the product is designated by the respond- €nt as "Aspiral," and the following statement was also used in literature accompanying or descriptive of the product: Elixir Asplral o!Ters the better way of prescribing aspirin. ~this statement, however, was discontinued in respondent's advertis- Ing in June 1036. On the cartons in which respondent's product is <lisplaye<l for sale to the purchasing public, appears the name ''Aspiral" in large and conspicuous type.

PAn. 3. For a number of years there have been many persons, firms, and corporations, competitors of the respondent, who have manufacture<!, distributed, and sold a certain pharmaceutical preparation known as acetyl salicylic acid, commonly designated as aspirin. 'through use over a perio<l of many years, this product has become 'Well and favorably known to the drug trade and to the purchasing PUblic un<ler the designation "Aspirin." Aspirin has been and is now generally use<l in the treatment of certain ills and conditions of the l~urnan body for relieving the pain attendant to said ills and condit~ons of the human body. The word "Aspirin" when used in connection with pharmaceutical preparations means, and the public well un?erstanus it to mean, that the product being referred to is an acetyl sahcylic acid preparation and is of recognized merit and value. PAR. 4. Respondent's product "Aspiral" is sold only in liquid form, and although pure acetyl salicylic acid may have been used in its Pl'eraration, nevertheless, vd1en this acid was mixed with the liquid Velncle the acetyl salicylic acid was broken up into free salicylic acid, a sodium aspirin, so<lium salicylate acetic, and sodium acetate, the les~It being that after this break-down less than 50 percent true acetyl Sahcylic acid remained. In truth and in fact the responuent's product Order 25F. T. C.

designated by it as "Aspiral" is neither true acetyl salicylic aci<l nor aspirin, and the use by the respondent of the name "Aspiral" together with the representation that "Elixir Aspiral offers the better way of prescribing aspirin" has the capacity and tendency to mislead and deceive a substantial number of the purchasing public into the erroneous or mistaken belief that said product is aspirin and is designed and intended for the treatment of the same ills and conditions of the human body as aspirin and that said product contains all the ingredients contained in aspirin, and has caused a substantial portion of the purchasing public to purchase a substantial volume of respond£>nt':; product on account of such belief.

PAR. 5. There are among the competitors of the respondent many persons, firms, and corporations who manufacture, sell, and distribute 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, who in no wise misrepresent the composition, nature, quality, or effectiveness of their products. r AR. 6. The designation by the respondent of its product as "Aspiral" and the representation by it that "Elixir Aspiral offers the better way of prescribing aspirin" are misleading and untrue and have caused an unfair diversion of trade from, and otherwisesubstantially injured, competitors of respondent in commerce. CONCLUSLON The acts and practices of the respomlent are all to the prejudice of the public and the competitors of the respondent 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." OROER TO CEASE AND DESIST This proceeding coming on for final hearing by the Federal Trade Commission upon the record, including the complaint of the Commission, the ans\ver of the respondent admitting all of thematerial allegations to be true, and waiving the taking of further evidence and of other intervening procedure, and a stipulation as to the facts, and the Commission having made its findings as to the facts and conclusion that said respondent, Eastern Pharmacal Company, Inc., a corporation, has violated the provisions of an Act of Congress approved September 2G, 1!>14, entitled "An Art to EASTERN PHARMACAL CO., INC. 585 579 ·Order create a Federal Trade Commission, to define its powers and duties, and for other purposes."

It is now orde-red, That the respondent, Eastern Pharmacal Company, Inc., a corporation, its officers, representatives, agents, and employees in connection with the offering for sale, sale, and distribution in interstate commerce and in the District of Columbia of its pharmaceutical preparation known as "Aspiral" forthwith cease r.nd desist from :

Using the name "Aspiral" or any word or words containing the letters "Aspir" as a trade name or designation for its product unless said product is aspmn or acetyl salicylic acid at the time of its sale.

It i8 further ordered, That the respondent, Eastern Pharmacal Company, Inc., a corporation, its officers, representatives, agents, and other employees, in connection with the offering for sale, sale, ~tnd distribution in interstate commerce or in the District of Columbia of its pharmaceutical preparation known as "Aspiral," do forth- With cease and desist from representing directly or indirectly in ~advertising matter, circular letters, by means of radio broadcast- Jng, or by any other means:

1. That "Aspiral" is aspirin.

2. That Elixir Aspiral offers the better way of prescribing aspirin. It i8 further ordered, That the said respondent within 90 days from and after the date of service upon it of this order, shall file '"ith the Commission a report in writing setting forth in detail the manner and form in which it is complying and has complied With the order to cease and desist as hereinabove set forth. Syllabus 25F. T. C.