Louis A. Burd and Abram Burd

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' In ree Marrer or LOUIS A. BURD AND ABRAM BURD, DOING BUSINESS AS BURD KNITTING MILLS COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3015. Complaint, Dec. 15, 1936—Decision, Aug. 10, 1938 Where two partners engaged in the sale and distribution of hosiery— Included words “Knitting Mills” in their firm name, under which they carried on their business, and also used word “Manufacturers” in phrase Hosiery Manufacturers,” in conjunction with or separate from their aforesaid trade name, and in describing their said business, and made use of said trade name and phrase in soliciting their said products, and displayed said name and phrase in letterheads, billheads, business cards, circulars, advertising matter, and in telephone and trade directories and otherwise, notwithstanding fact they did not manufacture such hosiery, and neither operated nor directly nor absolutely controlled any mill or factory wherein the products sold by them were made, but filled orders with products made in factories or mills which they did not own, operate, or control;

With tendency and capacity to mislead and deceive purchasers by causing them to believe that they actually owned and operated, or directly and absolutely controlled, factory or mill in which the products sold by them were made, or that they themselves made the same, and to purchase their said products on account of such beliefs and in the belief that in buying direct from the mill a saving of the middleman’s profit might be obtained and a more uniform line of goods be purchased, and that, in the matter of contract, more reliance could be placed on the manufacturer or operator than on one who was not, and that dealing with former was preferable and of greater advantage to the purchaser than dealing with someone who was not, and unfairly to divert trade to them thereby from those who truthfully advertise and represent their products and who in fact manufacture products similar to theirs, and from those who do not manufacture similar or like products; Held, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Mr. Wm. T. Chantland for the Commission.

Fox, Rothschild, O’Brien & Frankel, of Philadelphia, Pa., for respondents.

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 Louis A. Burd and Abram Burd, copartners, hereinafter referred to as respondents, have been and are using unfair methods of competition in com- 185514™—40—vo. 27——51 766 FEDERAL TRADE COMMISSION. DECISIONS Complaint OTN arate merce, 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 charges in that respect as follows: 3 | Paracrapu1. Respondents are Louis A. Burd and Abram Burd, copartners, who have been since in or about 1926, and are now, doing business’as “Burd Knitting Mills Co.,” with their principal place of business at 112-120 North Twelfth Street, Philadelphia, Pa. They are, and for more than 9 years last past have been, engaged in the sale and distribution:of hosiery in commerce between and among the various States of the United States. They cause said products, when sold, to be shipped. from their place of business in the State of Pennsylvania or other State of origin to purchasers thereof located in various States of the United States other than the State of Pennsy]lvania or other State of origin of the shipment. In the course and conduct of their business respondents have been at all times referred to herein, and are now, in competition with corporations, individuals, firms, and other partnerships likewise engaged in the sale and distribution of similar products in commerce among and between the various States of the United States.

Par. 2. In the course and conduct of their said business as described herein, said respondents have included within their firm name under which to carry on their business the words “Knitting Mills.” Respondents have also used the words “Manufacturers” within the phrase “Hosiery Manufacturers,” in conjunction with or separate from their said trade name, with which to describe their said business. Respondents have used continuously since in or about 1926, and are now using said trade name containing the said words “Knitting Mills,” and have likewise used the words “Hosiery Manufacturers,” in soliciting the sale of and selling their products in commerce as hereinabove described. Respondents have caused their ‘said trade name “Burd Knitting Mills Company,” and the words “Hosiery Manufacturers” to appear on their letterheads, billheads, business cards, circulars, advertising matter, in telephone and. trade directories, and otherwise. All of said printed matter has been, and is, distributed in and among the various States to customers and: prospective customers of the respondents. Such statements and designations serve as representations that respondents own, operate, or control the factory or mill wherein the products which they sell are manufactured. In truth and in fact the said respondents do not make or manufacture the products sold by them, nor have they ever made or manufactured said products. They do not own or operate or directly and BURD KNITTING) MILLS CO: 767 eeeeee 765 | Complaint absolutely control any mill or factory wherein the products sold-by them are made or manufactured, .Respondents have at all times herein referred to filled, and now fill, orders received by them with products made or manufactured in a factory or mill which they do not own, operate, or control.

Par. 3. There is a preference on the part of certain purchasers or prospective purchasers, located in different States of the United States, for products similar to those sold by respondents to be resold by retail to the public, for buying directly from the manufacturer or mill producing said products. There is an impression and belief existing among certain of said purchasers or prospective purchasers of hosiery that a saving of the middleman’s profit may be obtained, that a more uniform line of goods may be purchased, and that an advantage is obtained by purchasing goods directly from a manufacturer or a mill operator. Said purchasers or prospective purchasers also believe that more reliance can be placed on a manufacturer or mill operator with regard to the carrying out of contracts than can be placed upon one not a manufacturer or mill operator, and that dealing with a manufacturer or mill operator is preferable, and more advantageous to the purchaser, than is dealing with one not a manufacturer or mill operator.

The use by the respondents of the words “Knitting Mills” and “Hosiery Manufacturers,” as described hereinabove, has a tendency and capacity to mislead and deceive purchasers by causing them to believe that respondents actually own and operate or directly and absolutely control the factory or mill in which the products sold by respondents are made or manufactured, or that respondents themselves make or manufacture their products, and to purchase respondents’ products on account of such beliefs. The aforesaid representations by respondents have a tendency and capacity unfairly to divert trade to respondents from corporations, associations, individuals, firms, and other partnerships who are actually manufacturing products similar to the products of respondents, or who do not manufacture similar or like products to those of respondents, both of which classes sell their respective products in commerce among and between the various States of the United States, and who truthfully advertise and label their products and who do not represent themselves to be manufacturers or mill operators when they are not such in fact. Par. 4. The acts, practices, and representations of the respondents hereinabove set forth have been and are to the injury and prejudice of the public and of the competitors of the respondents in interstate commerce, and have constituted and now constitute unfair methods of Findings 27 BS EAC. competition 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, Frnpines as TO THE Facts, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on the 15th day of December 1936 issued, and on the 17th day of December 1936 served, its complaint in this proceeding upon respondents Louis A. Burd and Abram Burd, doing business as Burd Knitting Mills Co., charging them with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and filing of respondents’ answer, the Commission, by order herein, granted respondents’ motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of the complaint to be true, and waiving hearing on the charges set forth in the complaint and 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 hearing before the Commission on the said complaint and substitute answer, 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 ParacraPH 1. Respondents Louis A. Burd and Abram Burd are copartners who have been since in or about 1926, and now are, doing business as “Burd Knitting Mills Co.,” with their principal place of business at 112-120 North Twelfth Street, Philadelphia, Pa., and now are, and for more than 9 years last past have been, engaged in the sale and distribution of hosiery in commerce between and among the various States of the United States, and cause said products, when sold, to be shipped from their place of business in the State of Pennsylvania or other State of origin to purchasers thereof located in various States of the United States other than the State of Pennsylvania or other than the State of origin of the shipment. At all times referred to herein, in the course and conduct of their business respondents have been, and now are, in competition with corporations, individuals, firms, and other partnerships likewise engaged in the sale and distribution of BURD KNITTING MILLS CO. 769 765 Findings similar products in commerce among and between the various States of the United States.

Par. 2. In the course and conduct of their said business, respondents have included within their firm name under which they carry on their business the words “Knitting Mills,” and have also used the word “Manufacturers” within the phrase “Hosiery Manufacturers,” in conjunction with or separate from their said trade name, in describing their said business. Continuously since in or about 1926, respondents have used, and are now using said trade name containing the said words “Knitting Mills,” and likewise the words “Hosiery Manufacturers,” in soliciting the sale of and selling their products in commerce as above described. Respondents have caused their said trade name “Burd Knitting Mills Co.,” and the words “Hosiery Manufacturers” to appear on their letterheads, billheads, business cards, circulars, advertising matter, in telephone and trade directories, and otherwise, and have distributed same in and among the various States to customers and prospective customers of the respondents. Such statements and designations constitute and are representations that respondents own, operate, or control the factory or mill wherein the products which they sell are manufactured, whereas in truth and in fact the said respondents do not make or manufacture the products sold by them, nor have they ever made or manufactured said products, nor do they operate or directly and absolutely control any mill or factory wherein the products sold by them are made or manufactured. Respondents have, at all times herein referred to, filled and now fill, orders received by them with products made or manufactured in factories or mills not owned, operated, or controlled by them.

Par. 3. There is a preference on the part of certain purchasers and prospective purchasers, located in different States of the United States, for products similar to those sold by respondents to be resold by retail to the public, for buying directly from the manufacturer or mill producing said products, and there is an impression and belief existing among certain of said purchasers or prospective purchasers of hosiery that a saving of the middleman’s profit may thereby be obtained, and that a more uniform line of goods may be purchased, and such purchasers or prospective purchasers also believe that more reliance can be placed on a manufacturer or mill operator with regard to the carrying out of contracts than can be placed upon one not a manufacturer or mill operator, and that dealing with a manufacturer or mill operator is preferable, and more advantageous to the purchaser, than is dealing with one who is not a manufacturer or mill operator. ‘Order | 27 F. TICs Par. 4. The use by the respondents of. the words “Knitting Mills” and “Hosiery Manufacturers,” as described hereinabove, has a tendency and capacity to mislead and deceive purchasers by causing them to believe that respondents actually own and operate or directly and absolutely control the factory or mill in which the products sold by respondents are made or manufactured, or that respondents themselves make or manufacture their products, and to purchase respondents’ products on account of such, beliefs, and the belief in the advantages accruing therefrom as above described, and as a result thereof, the aforesaid representations by respondents have a tendency and capacity unfairly to divert trade to respondents from corporations, associations, individuals, firms, and other partnerships who truthfully advertise and represent their products, and who in fact manufacture products similar to the products of respondents, and also of those who do not manufacture similar or like products to those of respondents. CONCLUSION The aforesaid acts and practices of the respondents, Louis A. Burd and Abram Burd, doing business as Burd Knitting Mills Co., are to the prejudice of the public and of respondents’ competitors, and con- . stitute unfair methods of competition in commerce, within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of respondents, in which answer respondents admit all the material allegations of the complaint to be true and state that they waive hearing on the charges set forth in said complaint, and that, without further evidence or other intervening procedure, the case might proceed to final hearing upon the record, and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of the Federal Trade Commission Act. It is ordered, That the respondents, Louis A. Burd and Abram Burd, doing business as Burd Knitting Mills Co., or under any other trade name, their representatives, agents, and employees, in connection with the offering for sale, sale, and distribution of hosiery in interstate commerce and in the District of Columbia, do forthwith cease and desist from:

Representing, directly or indirectly, through the use of the words “Knitting Mills” or “Mills,” as part of their trade name or otherwise, BURD KNITTING MILLS ‘CO. reg) %65* =>» Order or through the use of the words “Hosiery Manufacturers” or “Manufacturers,” either alone or in conjunction with any other word or words, or through any other means or device, or in any manner whatever, that they are the manufacturers or makers of the products which they sell or that they are mill owners or operators, until and unless they actually own and operate, or directly and absolutely control, a plant or mill wherein said products are manufactured or made by them.

It is further ordered, 'That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with this order.

ta FEDERAL TRADE COMMISSION DECISIONS Syllabus 27 EF. T.-C.