Alpha Laboratory, Inc.

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

IN THE MATTER OF ALPHA LABORATORY, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. ti OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2968. Complaint, June 29, 1997 '-Decision, Feb. 25, 1938 Where a corporation engaged in sale and distribution of certain so-called hygienic products for women, including its so-called "Va-Jel" and similar products, and certain device for use of former, iu substantial competition with others engaged in offer and sale, in commerce among the various States, of so-called hygienic and other products used and useful for purposes for which it recommended its said products, and including many who sell and distribute, or manufacture and distribute, so-called feminine hygiene products in commerce without in any way misrepresenting effectiveness or efficacy thereof for such purposes, and including those offering medicines or preparations for use by women for hygienic, antiseptic, germicidal, and similar purposes without stating expressly or implying that their said products are invariably or uniformly effective for the purposes for which recommended, and those engaged in offer and sale in interstate commerce of medicines or other preparations, for use by women, and truthfully represented to public; in advertising its said product through printed pamphlets, leaflets, booklets, and other printed matter distributed among purchasers and prospective purchasers and through such matter placed in carton or container in which product was marketed, and through large window displays made use of by its agents in calling upon druggists and others interested in purchase of said product- ( a) Represented that said "Va-Jel," sold with said device, as aforesaid, was effective as a contraceptive, and that it constituted a scientific propbylac· tic for feminine hygiene purposes and a protection against venereal diseases and acted both mechanically and as a germicide in preventing feminine hygienic troubles, facts being it was not effective as aforesaid claimed, did not constitute a scientific preparation, had no beneficial therapeutic use in so-called feminine hygiene, and had no therapeutic value whatever in treatment of ailments, ills, and diseases peculiar to women, and would not act as a preventive of diseases specified in either sex;

(b) Represented that said preparation was prescribed by thousands of phy· sicians and that it had the approval of the American l\Iedfcal Association, American Birth Control League, and physicians generally, and that it was connected with aforesaid League, facts being product in question bad never been approved for use by said Association, was not used or recommended for use by large number of well-known clinics, nor recommended by medical profession generally, and it was not connected with and did not cooperate in any manner with such League; lAmended.

ALPHA LABORATORY, INC. 815 814 Complaint (c) Represented that preparation in question was not a patent or proprietary medicine, but an open formula, and that it and appliance or device in question might be used with safety and without deleterious effects by all women, facts being use of product and device was not harmless, as in· discriminate use thereof In many cases was capable of causing injuries and having deleterious e:tect upon user: and (d) Made use of and displayed its corporate name, containing word "Laboratory," in its advertisements and advertising matter, and represented that it owned and operated a laboratory, facts being it did not own, control, or operate any laboratory or place devoted to application of scientific principles in the making or preparation of its said products, and of which it was not the manufacturer :

With effect of misleading and deceiving purchasing public into erroneous belief that said representations were true and that purchasing public, as a consequence of mistaken and erroneous beliefs induced by such false and misleading statements and representations, bought substantial volume of its said products and trade was unfairly diverted to it from competitors engaged in sale and distribution of feminine hygiene products in commerce as aforesaid, or in manufacture, sale, and distribution thereof, and who truthfully represent the efficacy of their said products; to the substantial injury of competition in commerce: lleld, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before },fr. Robert S. ll all, trial examiner. Mr. William L. Taggart for the Commission.

Mr. L. Louis f(arton, of Chicago, Ill., for respondent. AMENDED 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 Alpha. Laboratory, Inc., a corporation, hereinafter designated as respondent, is now and has been 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 thereto would be in the public interest, hereby issues its amended complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Alpha Laboratory, Inc., is now, and has been for several years last past, a corporation organized, existing, and doing business, under and by virtue of the laws of the State of Illinois, with its office and principal place of business at 5908 North Clark Street in the city of Chicago and the State aforesaid. Respondent has been engaged in the sale and distribution of certain so-called hygienic and other products for use by women, in com- 816 FEDERAL TRADE COl\IMISSION DECISIONS Complaint 213 F. T. C~ merce between the State of Illinois and the various other States of the United States and in the District of Columbia. It causes these products, when sold, to be transported from its aforesaid place of business to purchasers thereof in the various States of the United States other than the State of Illinois and in the District of Columbia~ In the course and conduct of said business, respondent has been and is in substantial competition with other individuals, partnerships,. and corporations similarly engaged in offering for sale and selling in commerce among and between the various States of the United States so-called hygienic and other products intended and designed for use by women exclusively.

PAR. 2. In the course and conduct of its business, it has been and is the practice of respondent to offer for sale and sell for such use a.. product known and described as Va-Jel and similar products. Such products are sold principally to wholesale druggists, although "·hen an order is received by respondent from any individual unit of thepurchasing or consuming public, it is filled by respondent. In the carton or container in which the said product is marketed~ there is enclosed certain advertising literature in which the product is represented and described. Such advertising matter is also distributed by respondent among purchasers and prospective, purchasers who inquire about the said product. It also employs and uses ag-ents for the introduction of said product and promotion of its sale. They call upon druggists and install advertising window display and distribute other advertising matter including circulars, a booklet en~ titled "A Confidential Talk to ·women" and matches, the latter of which contain on their cover certain legends. Such legends are "Let Va-Jel Scientific Prophylactic Open the ·way for a Better, Happier Life for all 'Vomen. Doctors advise use of Va-Jel." On the inside of such cover of the matches appears the following: (sic) "Strike for Freedom. Va-Jel solves the ·woman's Problem. Send this folder with self-addressed stamped envelope to Alpha Laboratory, Inc., Chicago, Illinois, for Free booklet 'A Confidential Talk to 'Vomen.' Va-Jel has no substitute."

As inducements to the purchase of Vn-J el, respondent represents that use of such product will prevent conception; that it is a protection against venereal diseases. As a further inducement. for the purchase of its product Va-Jel, respondent has represented its co~ operation with the American Birth Control League using such language as signifies and implies the close connection between respond~ ent and such League. It also represents that it has received approval of the product V a-J el by the American Medical Association and by physicians generally, and that it is generally dispensed and pre- ALPHA LABORATORY, INC. 817 =814 Complaint scrib£>d by thousands of physicians. It further represents that re- .spondent is well known to the medical profession for its high class pharmaceutical products. Respondent further represents that the product Va-J el is not a patent or proprietary medicine but rather an '{)pen formula which is given to physicians whenever they request it. In truth and in fact the use of respondent's said product neither 1miformly nor invariably prevents conception, nor the contraction of venereal diseases. It is neither a scientific prophylactic which ·opens the way to a better and happier life for all women, nor does it solve the woman's problem. The product Va-Jel has not received the approval of The American Medical Association, nor of any officer, medium, or agency thereof. It has not been dispensed and pre- :scribed by thousands of physicians, and respondent is not known in the medical profession for the high class of its pharmaceutical products. There is no connection, direct or indirect, between the respond- ·ent and The American Birth Control League. The product of re- .spondent is a patent or proprietary medicine. It is not a:r;J. open formula as the words are generally understood since ingredients of the product are not declared or disclosed.

PAn. 3. Respondent represents in its corporate name and in the :sale of its products that it owns and operates a laboratory and uses :and displays such name containing the word "laboratory" in its ad- \·ertisements and advertising matter. In truth and in fact respondent does not own, control, or operate any laboratory and does not own, ·operate, or control any place devoted to the application of scientific })rinciples in the making or preparation of said products. Respondent is not the manufacturer of the products it sells but purchases said :Products from others.

. P .AR. 4. There are now and for several years last past have been individuals, partnerships, and corporations who have been offering for sale and selling in interstate commerce medicines or preparations ·of various kinds for use by women in so-called feminine hygiene, antiseptic, germicidal and for similar uses without stating expressly Qr implying or importing in their representations that their products ·or any of them are invariably or uniformly effectual. There are now .and for several years last past have been individuals, partiierships, .and corporations offering for sale and selling in interstate commerce lnedicines or other preparations which they truthfully represent will )n·event the contraction of venereal diseases by women when used in :accordance with directions.

PAR. 5. The aforesaid practices of respondent have had and have the capacity and tendency to mislead and deceive wholesale dealers, l·etail dealers and their customers, the consuming or purchasing public, Findings 26F. T.C.

into the erroneous beliefs that Va-Jel is invariably and uniformly effective in preventing conception and is likewise a preventive of ·venereal diseases, and that all other representations of the respondent hereinbefore stated in paragraph 2 are true, and into the purchase of such product in reliance upon such erroneous beliefs or one or more of them.

The aforesaid practices have also had and have the capacity and tendency to divert trade to respondent from the competitors mentioned in paragraph 4 hereof, as a result of which respondent has been doing and is doing substantial injury to such competitors in the course of such competition.

PAR. 6. The aforementioned methods, acts, and practices of respondents 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 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 AB TO THE FACTS, AND ORDER Pursuant to the provisions o:f 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 June 29, 1937, issued and, on July 1, 1937, served its amended complaint in this proceeding upon respond- . ent Alpha Laboratories, Inc., a corporation, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said amended complaint, and the filing of respondent's answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by "William L. Taggart, attorney for the Commission, before Robert S. Hall, an examiner of the Commission theretofore duly designated by it. Thereafter, on October 21, 1937, the respondent, submitted an amended answer to the complaint, in which answer respondent admitted all o:f the material allegations of the amended complaint to be true and stated that it waived hearings on the charges r set :forth in said amended complaint and that, without further evi- I dence or other intervening procedure, the Commission might issue !and serve upon it findings as to the facts and conclusion and an order l to cease and desist from the violations o:f law charged in the amended . complaint. The Commission, by order entered herein, substituted ~~ said amended answer dated October 21, 1937, in lieu of the original answer to the amended complaint filed on July 19, 1937. Thereafter l i ALPHA LABORATORY, INC. 819 814 Findings the proceeding regularly came on for final hearing before the Commission on said amended complaint, amended answer dated October 21, 1937, and testimony and other evidence; and the Commission having duly considered the matter, 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 THE FACTS PARAGRAPH 1. Respondent, Alpha Laboratory, Inc., a corporation organized, existing, ·and doing business, under and by virtue of the laws of the State of Illinois, with its office and principal place of business at 325 West Huron Street, in the city of Chicago and the State aforesaid .

. Respondent is now, and for the past several years has been, engaged lll the sale and distribution of certain so-called hygienic products for Use by women. It causes these products, when sold, to be transported from its aforesaid place of business to purchasers thereof located at Points in the various States of the United States other than the State of Illinois and in the District of Columbia . . In the course and conduct of' said business, respondent has been and 1~ in substantial competition with other corporations and with indi- VIduals, partnerships, and corporations similarly engaged in offering for sale and selling in commerce among and between the various States of the United States so-called hygienic and other products used and useful for the purpose for which respondent recommends that its said product be used.

The respondent advertises the product to the public through printed P~mphlets, leaflets, booklets, and other printed matter which it dist~l~utes among purchasers and prospective purchasers. The adverhslllg matter in addition to being distributed generally is placed in the carton or container in which the said product is marketed. Respondent as. an advertising medium also employs agents who call upon druggists and others interested in the purchase of the product and ~lake representations in addition to those in the printed matter and Install large window displays.

In one of said booklets, called "A Confidential Talk to 'Vomen," and on the cover of pocket matches the following statements appear: Let Va-Jel scientific prophylactic open tbe way for a better happier lite for all 'IV women.

Doctors advise use of Va-Jel.

Va-Jel solves the womens problem.

Send this folder with self-addressed stamped envelope to Alpha I.aboratory,1 nc.., Chicago, Ill., for free booklet. 820 FEDERAL TRADE COl\Il\IISSION DECISIONS Findings 26 F. T. C. As further inducements to the purchasing public, respondent represents in its advertising and otherwise, directly and by implication, that the use of Va-J el will prevent pregnancy; and that it is a pro· tection against venereal diseases; that respondent works in cooperation with the American Birth Control League, using such language as signifies and implies a close connection between respondent and such League. It also represents that it has received approval of the product Va-Jel by the American Medical Association and by physicians generally, and that it is generally dispensed and prescribed by thousands of physicians. It further represents that respondent is well known to the medical profession for its high-class pharmaceutical products. PAR. 2. It has been and is the practice of respondent, to offer for sale and sell to the purchasing public for such use as is herein set out a product known as Va-Jel and similar products. Va-Jel is a jelly consisting of glycerine, gum tragacanth, lactic acid, phenol, and some scent. It is applied through a pipe, tube, or applicator, inserted Ly hand in the vagina and the tube squeezed to force the jelly up into the vagina.

The use of the product as directed will not prevent conception. A contraceptive jelly such as that sold by the respondent is only effective when used to function with an occlusive device placed in the vagina at the opening of the cervix. The secretions that flow from the cervix and in the vagina during intercourse prevent the jelly alone from acting as an occlusive. No occlusive device is supplied with 1·respondent's product. A contraceptive jelly is further rendered ineffective because the vaginal secretion has an acidity or alkalinity which not only varies between different women but also varies in the same person from week to week and from month to month which may or may not render such a jelly ineffective depending upon the degree of acidity or alkalinity which may be present at a given time. The respondent's product has not sufficient germ destroying power to isolate and destroy the male sperm.

The product is not a scientific prophylactic and has no beneficial use therapeutically in so-called feminine hygiene. The preparation has no therapeutic value whatever in the treatment of ailments, ills, and diseases peculiar to women and will not act as a preventative of venereal disease in either sex.

The use of the product with the applicator is not harmless as in many cases the indiscriminate use of the product and the applicator is capable of causing injuries and might have a deleterious effect upon the female using it.

The product has never been approved for use by the American Medical Association and is not used or recommended for use by a ALPHA LABORATORY, INC. 821 814 Findings large number of well known clinics and is not recommended by the medical profession generally. The respondent is not connected with and does not cooperate in any manner with the American Birth Control League.

PAR. 3. Respondent represents in its corporate name and in the sale of its products that it owns ami operates a laboratory, and it uses and displays such name containing the word "laboratory" in its advertisements and advertising matter. In truth and in fact respondent does not own, control or operate any laboratory and does not own or control tmy place devoted to the application of scientific principles in the making or preparation of said products. Respondent is not the manufacturer of the products it sells but purchases said products fron:f" others.

Many of the respondent's competitors who sell and distribute, or manufacture, sell, and distribute so-called feminine hygiene products in commerce, do not in any way misrepresent the effectiveness of their products or their efficacy for feminine hygienic purposes. PAR. 4. The use by respondent of the representations set forth above has had and now has the capacity and tendency to and does mislead and deceive the purchasing public into the erroneous belief that said representations are true. As a consequence of the mistaken and erroneous beliefs induced by the false and misleading statements aml representations above referred to, the purchasing public has purchased a substantial volume of respondent's products with the result that hade has been unfairly diverted to the respondent from its competitors engaged in the business of selling and distributing feminine hygiene products in said commerce~ or in the manufacture, and in the sale and distribution of feminine hygiene products in said commerceJ Who truthfully represent the efficacy of their products. As a result thereof, substantial injury has been and is now being done by re~ spondent to competition, in commerce, among and l>etween the various States of the United States and the District of Columbia . • PAR. 5. There are now and for several years last past have been Individuals, partnerships, and corporations who have been offering for sale and selling in interstate commerce medicines or preparations of various kinds for use by women for hygienic, antiseptic, germicidal and for similar purposes without stating expressly or implying Or importing in their representations that their products are invariably or uniformly effective for the purposes for which they are recom- ~ended. There are now and for several years last past have been ~ndividuals, partnerships, and corporations offering for sale and sell- Ing in interstate commerce medicines or other preparations for use by ~·women which are truthfully represented to the public. 822 FEDERAL 'trade COMMISSION PECISIONS Order 26F.T.C.

CONCLUSION The aforesaid acts and practices of the respondent Alpha Laboratories, Inc. are to the prejudice of the public and 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 Trade Com- "inission upon the amended complaint of the Commission, testimony and other evidence taken before Robert S. Hall, an examiner of the Commission theretofore duly designated by it, in support of the allegations of said complaint and the amended answer of respondent, dated October 21, 1937, in which, answer respondent admits all the material allegations of the complaint to be true and states that the Commission may, without the taking of further testimony or any other intervening procedure, enter and issue its findings as to the facts an order to cease and desist; 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 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, Alpha Laboratory, Inc., a corporation, its officers, representatives, agents, and employees, in connection with the offering for sale, sale, and distribution of Va-Jel and similar products sold under the name of Feminine Hygiene Products in interstate commerce or in the District of Columbia, do forthwith cease and desist from:

1. Representing that the use of said preparation alone or in conjunction with an appliance will prevent conception; 2. Representing that said preparation is a scientific prophylactic for feminine hygienic purposes, and is a protection ag~st venereal disease '· ~ .-. 3. Representing that said preparation acts two ways in preventing feminine hygienic troubles, mechanically and as a germicide; 4. Representing that the preparation is prescribed by thousands of physicians and that it has the approval of the American Medical Association, American Birth Control League, and physicians generally, that the respondent is connected with the American Birth Control League;

ALPHA LABORATORY, INC. 823 814 Order 5. Representing that the preparation is not a patent or proprietary medicine, but an open formula 1 6. Representing that the said preparation and appliance may be used with safety' and without deleterious effects by all -women; 7. Representing that respondent owns or operates a laboratory in which the product is manufactured or that it owns or operates any establishment devoted to the application of scientific principles jn the making or preparation of said product;

8. Representing that respondent is noted on account of the manufacture and sale of high-class pharmaceutical products; 9. Making other representations of similar import and of like ~haracter to those made as above set forth. It is further ordered, That the respondent shall, within 60 days after service upon it o:f this order, file with the Commi~ion a report in writing setting forth in detail the manner and form in which it has complied with this order.

824 FEDERAL TRADE COl\Il\IISSION DECISIONS Syllabus 26 F. T. C.