Sheffield Silver Company, Inc.

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IN THE :MATTER OF SHEFFIELD SILVER COMPANY, INC.

CO~IPI..AINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2838. Complaint, Nov. 21, 1935-Decision, Feb. 111, 1938 'Where a corporation engaged in manufacture and sale, to retail jewelers lo· cated throughout the United States, of silver-plated hollow ware made by the electro-plating proces<', in purchase of products of which process, absent fixed standard for composition of base metal or fineness or quantity of silver to be applied generally, public is obliged to depend upon reputation of maker or of trade name or brand attached to product, or represeuta· tions of maker or seller thereof- Used, in conduct of its business, corporate name including words "Sheffield Sitver," and featured its said name containing word "Sheffield" on letter· lJeads and invoices distributed in interstate commerce, and on labels affixed to cartons in which Its said products were packed and shipped, and sup· Plied salesmen, for presentation to prospects, with photographs of its said ware featuring corporate name as aforesaid, notwithstanding fact its said products were not made or manufactured in accordance with Sheffield process, long theretofore employed and identified by name "Sheffield" with ware of high sales value made by historic process in question; 'With result that its said products were advertised as "Sheffield Silverware by Sheffield Company," and with tendency and capacity to confuse and deceive purchasing public with regard to true nature and quality thereof, and to induce purchasers to buy same in and on account of mistaken belief that they were made by aforesaid Sheffield process, and of thereby unfairly diverting trade to it from competitors engaged in sale in interstate commerce of products similar to those sold and distributed by it, and who truthfully and h01wstly advertise and represent the snme, uud of plaelng in bands of unscrupulous or uninformed retailers means and in· strumentality whereby they might mislead members of purchasing public Into erroneous belief that its said silver-plated hollow ware products were made in accordance with process aforesaid : 1Field, That such practices, under the conditions and circumstances set forth, were all to the injury and prejudice of the public and competitors and constituted unfair methods of competition.

Before iJlr. William 0. ReeL'e8, trial examiner. Nr. Alden S. Bradl-ey and 21fr. Gerard A. Rault for the Com- Inission.

11/r. J. Leo Rothschild, of New York City, for respondent. Com PLAINT Pursuant to the provisions o£ an Act o£ Congress approved Sep· t;mber 26, 1914, entitled "An Act to create a Federal Trade Commis- Sion, to define its powers and duties, and £or other purposes," the FEDERAL TRADE COMl\USSION DECISIONS714 Complaint 26F.T.C.

Federal Trade Commission, having reason to believe that Sheffield Silver Company, 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 of Congress, and in violation of Section 5 of said act, and jt 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 doing business by virtue of the I a ws of the State of New York, having its principal office and place of business in Jersey City, N. J.; and is now and for more than 1 year last past, has been engaged in the business of manufacturing silver-plated hollow ware, and in the sale and distribution thereof to retail jewelry dealers located throughout the United States, and causes said products when sold to be transported from its principal place of business in Jersey City, State of New Jersey, or from its place of origin in other States, to purchasers thereof in the States of Tennessee, Texas, Georgia, and other States of the United States and in the District of Columbia, at their respective places of business, and there is now, and there has been for more than 1 year last past, a. course of trade and commerce by said respondent in such silver-plated hollow ware, between and among the various States of the United States and in the District of Columbia. In the course and conduct of its said business, respondent is in competition with other individuals, partnerships, and corporations engaged in the manufacture of silver-plated hollow ware and in the sale and distribution thereof in commerce between and among the various States of the United States and within the District of Columbia.

PAR. 2. Competitors of the respondent, and the respondent, use, in the manufacture of their product, the electroplating process, which process involves the submersion of the base metal form in a chemical solution or bath and, by the electrolizaJion of silicate salts, causes a coating of silver to adhere to this base metal form. The plated silver thus produced varies in quality and value according to the composition of the base metal, the workmanship upon its form and the decoration, the amount and fineness of the silver deposited upon it and left upon it after the finishing process, and the projection o£ the surfaces exposed to wear and abrasion. There is no fixed standard for the composition o£ the base metal, nor for the fineness or quality o£ silver to be applied generally or to wearing o£ surfaces, so that the purchasing public is obliged to depend upon the reputation of the maker of such plated silverware, or the reputation o£ the trade name :I SHEFl'JELD SILVER CO., INC. 715 '113 Complalnt or brand attached thereto, or the representations of the maker or seller thereof, in purchasing said silverware, since the quality of the Ware cannot be determined except by laboratory tests. PAR. 3. About the year 1742 there was originated in Sheffield, England, a process for the production of silver-plated ware, which process involved the welding of a silver plate to one or both sides <>f a sheet or bar of copper so as to form one thoroughly coherent 1nass, which was rolled to the desired gauge and subsequently worked into the desired form. The ware produced by this process was properly known as "copper-rolled plate," though this name was not used as a trade name or designation. The copper-rolled plnte of Sheffield, England, acquired a very considerable reputation for excellency in -quality, workmanship and design, and though the name "Sheffield" Was not generally impressed upon or affixed to the ware itself, which Was identified by the maker's registered marks, the copper-rolled plate came to be generally known and is still known as ~~sheffield." ·While the cheaper electroplating process displaced the "Sheffield" ~opper-rolled plate which practically went out of production, there have been and still are, from time to time, importations of the "Sheffield" copper-rolled plate into the United States, and there is a considerable trade in "Sheffield" copper-rolled plate in this country at prices which reflect not only its value as silver-plated ware, but its artistic and historic value as well. The name "Sheffield" as applied to silverware at the present time, implies a quality and a value })eculiar to the "Sheffield" copper-rolled plate itself as well as to the Process itself, and the use of the term "Sheffield" is a representation thereof.

PAR. 4. In the course and conduct of its said business, respondent, for more than 1 year last past, has been using as its corporate name, "Sheffield Silver Company, Inc.," and has caused said corporate name, containing the word "Sheffield," to be featured on its letterlleads and invoices distributed in interstate commerce and on its labels affixed to the cartons in which said products were packed and shipped in interstate commerce; and it has furnished to its salesmen fGr Presentation to prospective customers in their sales talk, photographs ?f its silver-plated hollow ware featuring its corporate name; when, 111 truth and in fact said products sold by the respondent were not made or manufactured in accordance with the process used in the manufacture of Sheffield silver or Sheffield plate, nor are said prod- Ucts made or manufactured in Sheffield, England, in accordance with such process.

PAR. 5. The said representations made by the respondent in the lise of the word "Sheffield'! in its corporate name "Sheffield Silver Findings 26F.T.O.

Company, Inc.," as set forth in paragraph 4 hereof, have, and have had, the capacity and tendency to deceive the purchasing public und induce purchasers to buy the products of respondent on account of the belief that said representations are true and that the respondent's product is "Sheffield," thus diverting trade to respondent from competitors of respondent engaged in the sale in interstate cmmuerce. of such products as are sold and distributed by respondent, which said competitors truthfully and honestly advertise and represent their" products.

PAR. 6. The above acts and things done by the respondent as aforesaid, have tended to induce, and have induced, the purchase of respondent's products by various retail dealers of silver-plated hollow ware and have tended to divert trade, and have diverted trade, from competitors of respondent, and have thereby injured such competitors of respondent.

PAR. 7. The aforementioned methods, acts, and practices of the respondent are all to the prejudice of the public and of the respondent's competitors, as hereinabove alleged. Such methods, acts, and practices constitute an unfair method of competition in commerce within the intent and 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 for other purposes," approved September 26, 1914.

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 the 21st day of November 1935, issued, and on December 27, 1935, served its complaint in this proceeding upon respondent, Sheffield Silver Company, Inc., charging it with the use of unfair methods of competition in violation 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 Alden S. Bradley, attorney for the Commission, and in opposition thereto by J. Leo Rothschild and Walter S. Beck, attorneys for the respondent, before \Villiam C. Reeves, an Examiner of the Commission theretofore duly designated by it. Said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding came on for final hearing before the Commission on the said complaint, the answer thereto, testimony and other evidence, briefs, and oral arguments by counsel aforesaid, in support of the SHEFFIELD SILVER CO., INC. 717 713 Findings complaint and in opposition thereto, and the Commission having duly considered the same and being now fully ad vised 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 THE FACTS P AR~GRAl'H 1. Respondent, Sheffield Silver Company, Inc., is a corporation organized and doing business under and by virtue of the laws of the State of New York, having its principal office and place of business in the city of Jprsey City, N. J., and is now, and for more than 2 years last past has been, engaged in manufacturing silverplated hollow ware, and in the sale and distribution thereof to retail jewelry dealers located throughout the United States. Respondent causes said products, when sold, to be transported from its principal place of business in Jersey City, State of New Jersey, into the various States of the United States other than New Jersey, and in the District of Columbia, at the respective places of business of purchasers. There is now, and for more than 2 years last past hafl been, a course of trade in commerce by said respondent in such silver-plated hollow ware between and among the various States of the United States and in the District of Columbia.

In the course and conduct of its business, respondent is in competition with individuals, partnerships, and corporations engaged in the manufacture of silver-plated hollow ware and in the sale and distribution thereof in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. Competitors of respondent, and the respondent, use, in the manufacture of their products, the electroplating process, which Process consists in taking a finished article, so far as its structure is concerned, and immersing it in a solution through which silver is electrolytically deposited on the base metal so that each part of the exposed surface is covered with a layer of silver. The plated silver thus produced varies in quality and value according to the composition of the base metal, the workmanship upon its form, the decoration, the amount and fineness of the silver deposited upon it, and left upon it after the finishing process.

There is no fixed standard for the composition of the base metal nor for the fineness or quantity of silver to be applied generally, so that the Purchasing public, in purchasing said silverware, is obliged to depend Upon the reputation of the maker of such plated silverware, or the reputation of the trade name or brand attached thereto, or the representations of the maker or seller thereof, since the quality of the silverware cannot be determined except by laboratory tests. 160451m--3n--vot.20----48 718 l!'EDERAL TRADE COMl\IISSION DECISIONS Findings 26 F. 'I. C. PAR. 3. About 200 years ago a process was developed at Sheffield, England, by which sheets of copper and silver were fused, then rolled to sheets of the desired thickness, and from these sheets various articles of hollow ware were made. Hollow ware made by this process is of high quality and has been known in the silver industry as "Sheffield." The word "Sheffield," when applied to silver-plated ware, has a sales value. The Sheffield process is not now generally employed jn the manufacture of hollow ware, but existing pieces of ware made by that process carry a high sales value. The name "Sheffield" has thus become identified in the public mind with a high quality of silverware manufactured by the Sheffield process.

PAR. 4. In the course and conduct of its said business, respondent, for more than 2 years last past, has been using as its corporate name Sheffield Silver Company, Inc., and has caused said corporate name containing the word "Sheffield" to be featured on its letterheads, and invoices distributed in interstate commerce and on its labels affixed to the cartons in which saia products are packed and shipped in commerce as herein described, and has furnished its salesmen, for presentation to prospective customers in their sales talks, photographs of its silverplated hollow ware featuring its corporate name. In truth and in fact, said products sold by the respondent were not made or manufactured in accordance with the process used in the manufacture of Sheffield silver or Sheffield plate, nor are said products made or manufactured in Sheffield, England, in accordance with said process. As a result of the use of the word "Sheffield" in the manner herein described, in connection with the sale, advertising, and distribution of silver-plated hollow ware products of the Sheffield Silver Company, Inc., a retailer of Atlanta, Ga., advertised respondent's products in the Atlanta Journal, a newspaper having an interstate circulation, as "Sheffield Silverware by Sheffield Company." PAR. 5. The acts and practices of the respondent in using the word "Sheffield" as part of its corporate name and otherwise, as herein described, in connection with the sale and distribution of silver-plated hollow ware in commerce, as herein set out, have had and have the tendency and capacity to confuse and deceive the purchasing public with regard to the true nature and quality of its products, and to induce purchasers to buy such products on account of the mistaken belief that respondent's products are made by the Sheffield process herein described. Trade is thereby unfairly diverted to respondent from competitors engaged in the sale in interstate commerce of products similar to those sold and distributed by respondent, which said. competitors truthfully and honestly advertise and represent their products. Further, the acts and practices of respondent, as herein detailed, serve to place in the hands of unscrupulous or uninformed retail SHEFFIELD SILVER CO., INC. 719 '113 Ot·der dealers a means and instrumentality whereby said dealers may mislead members of the purchasing public into the erroneous belief that said silver-plated hollow ware products manufactured by the Sheffield Silver Company, Inc., are manufactured in accordance with the Sheffield process hereinbefore described.

CONCLUSION The aforesaid practices of said respondent, Sheffield Silver Company, Inc., under the conditions and circumstances hereinbefore set forth, are all to the injury and prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce in violation 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." OllDER TO ()EASE 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 "William C. Reeves, an examiner of the Commission theretofore duly designated by it, in support of the allegations of said complaint and in opposition thereto, briefs filed herein, and oral arguments made by Aluen S. Bradley, counsel for the Commission, and J. Leo Rothschild, counsel for the respondent, and the Commission having made its findings as to the facts and conclusion that sn,id respondent has violated 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."

It is ordered, That the respondent, Sheffield Silver Company, Inc., its officers, representatives, agents, and employees, in connection with the offering for sale, sale, and distribution of its silver plated hollow ware, produced by electroplating, in interstate commerce or in the District of Columbia, do forthwith cease and desist from: Using the word "Sheffield" in its corporate name or in any other manner, so as to represent or imply that said electroplated hollow Ware products are "Sheffield" or are made by the Sheffield process. It i8 further ordered, That the respondent shall, within 60 days ~after service upon it of this order, file with the Commission a report ln writing, setting forth in detail the manner and form in which it has complied with this order.

720 FEDERAL TRADE COl\Il\USSION DECISIONS Syllabus 2G F. T. C.