Parfums Lengyel, LTD

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

IN THE MATTER OF PARFUMS LENGYEL, LTD.

COJ\IPL.\INT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF A~ ACT OF CONGRESS APPHOVED SEPT. 26, 1914 Docket 3666. Complaint, Dee. 17, 1938~Decision, Sept. 26, 1939 Where a co1·poration engaged, as "Parfums Lengyel, Ltd.," in selling and distributing perfumes, toilet waters, and other cosmetic preparations- Represented, through advertising folders, price lists and advei'tisements in periodicals and newspapers of general circulation among the various States and in the District of Columbia, that its said products were made or compounded in France and imported Into the United States, facts being they were not made or compounded in France or in any other foreign country and imported, but were made and compounded in the United States from essential ingredients which were im})Orted from France and other European countries;

'Vitb tendency and capaeity to mislead and decei\·e substantlnl part of purchasing public into erroneous and mistaken belief that said products were made or 'COmpounded in France and imported into the United States, for which products, as imported from foreign countries, and particularly for the higher-priced French products, there is a preference on the part of the pnrehaslng public, and with result, as conspquence of such belief, that number of said public purchased substantia I portion of its products and trade was diverted unfairly to it from its competitors engaged in manufacture, sale, and distribution, or in sale and distribution, of perfumes, toilt>t waters, and other cosmetic preparations, and who truthfully represent the country or source of origin of their said prorlucts; to the sub~bm­ tial injury of competition in commerce:

Held, That such acts and practices, Ull{ler the circumstances set forth, were all to the prejudice of the public and competitors, and constituted unfair methods of competition in commerce and unfair and decepti,·e nets and practices therein.

Before Mr. Edward E. Reardon, trial examiner. llfr. S. Brogdyne Teu,, II for the Commis:;ion. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Parfums Lengyel, Ltd., hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint setting forth its charges in that respect as follows:

Complaint 29F.T.C.

PARAGRAPH 1. Respondent, Parfums Lengyel, Ltd., is a corporation created by and existing under the laws of the State of New York~ with its principal office and place of business located at 105 East Twenty-ninth Street, city of New York, State of New York. PAR. 2. Respondent is now, and for more than one year last past has been, engaged in the business of selling and distributing perfumes, toilet waters, and other cosmetic preparations. Respondent causes said products, when sold, to be transported from its place of business in the State of New York to customers located in other- States of the United States and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said perfumes, toilet waters, and othercosmetic preparations, sold and distributed by it in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of its business respondent is in active and substantial competition with other corporations and with partnerships and individuals engaged in the sale and distribution of perfumes, toilet waters and other cosmetic preparations in commerce between and among the various States of the United States and in the District of Columbia.

PAn. 4. In the course and conduct of said business and for the purpose of inducing the purchase of said products, respondent has made representati.ons concerning the country in which its said products are manufactured, the said representations having been made by means of advertising folders, price lists and by means of advertisements inserted in magazines and newspapers having a general circulation among and between the various States of the United States and in the District of Columbia. In all of its advertising literature and newspaper and magazine advertisements respondent directly or indirectly represents that the perfumes, toilet waters and other cosmetic preparations sold and distributed by it are manufactured in France and imported into the United States. PAR. 5. The representations made by respondent with respect to the country in which its products are manufactured are grossly exaggerated, misleading and untrue. In truth n~d in fact, the perfumes, toilet waters, and other cosmetic preparations sold and distributed by resl)Ond~,lt art> not imp01"ced flom France nor any other foreign country into the United States but are manufactured in the United States from essential ingredients among which are some imported from France.

PAR. 6. There is a preference on the part of the buying public for perfumes, toilet waters and other cosmetic preparations which are PARFUl\IS LENGYEL, LTD. 1017 1015 Findings manufactured in foreign countries ancl imported into the United States. This is particularly true regarding perfumes, toilet waters, and other cosmetic preparations manufactured in France, and such goods so manufactured and imported command and bring from the purchasing public a higher price in the markets of the United States than domestic perfumes, toilet waters ancl other cosmetic preparations of the same nature and descriptions.

PAR. 7. There are among respondent's competitors many who m~um­ facture, distribute and sell perfumes, toilet waters, and other cosmetic preparations who truthfully represent the place, or country in which their products are manufactured.

PAR. 8. The use of the aforesaid false and misleading statements Ftnd misrepresentations by the respondent in designating and describing its products was and is calculated to have and now has a tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that all of the said misrepresentations are true.

As a result of this mistaken and erroneous belief a number of the consuming public have purchased a substantial volume of respondent's products with the result that trade has been diverted unfairly to respondent from its competitors likewise engaged in the business of distributing and selling perfumes, toilet waters, and other cosmetic preparations, who truthfully advertise their products. As a conliequence thereof injury has been done and is now being done by respondent to competition in commerce between and among the ''arious States of the United States and in the District of Columbia. The aforesaid acts and practices of respondent, as herein alleged, are all to the prejudice and injury of the public and to respondent's competitors and constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTs, AND Onder Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on December 17, 1938, issued and served it complaint in this proceeding upon said respondent, Parfums Lengyel, Ltd., charging it with the use of unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of the provisions of said act. The respondend filed no answer in this proceeding. Thereafter, this cause came on for the taking of testimony, and a stipulation as to the facts to be taken as the facts in this proceeding and in lieu of testimony in support of the charges stated in the complaint or in opposition thereto 1018 FEDERAL TRADE CO:i\11\IISSION DECISIONS Findings 29F.T. C.

was entered into by and between S. Brogdyne 'feu, II, counsel for the Commission, and Georges Lengyel, vice president of the respondent corporation, and made a part of the record in this cause. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint, the stipulation as to the facts, aml brief in support of the allegations of the complaint (respondent not having filed brief and not having requested oral argument); 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 facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS P ARAGHAPII 1. Parfums Lengyel, Ltd., is a corporation created by and existing under the laws of the State of Delaware. It has its principal office and place of business locateu at 680 Fifth Avenue, New York, N. Y.

PAR. 2. The respondent has for more than 1 year last past been engaged in the business of selling and distributing perfumes, toilet waters, and other cosmetic preparations. 'Vhen the respondent's products are sold, it causes them to be transported from its place of business in New York to customers located in other States of the United States and in the District of Columbia. PAR. 3. The respondent has at all times mentioned herein maintained and still maintains a course of trade in its products sold and distributed by it in commerce between and among the various States of the United States and in the District of Columbia. PAR. 4. The respondent has been and is now in active and substantial competition with other corporations and with partnerships and individuals engaged in the sale and distribution of perfumes, toilet waters, and other cosmetic preparations in commerce between and among the various Stutes of the United States and in the District of Columbia.

PAR. 5. In the course and conduct of its business and for the purpose of inducing the purchase of its products, the respondent has made representations concerning the country in which its products are made or compounded. The representations have been made by means of advertising folders, price lists and by advertisements inserted in magazines and newspapers having a general circulation nmong and between the various States of the United States and in the District of Columbia. In all of the advertising literature and newspaper and magazine advertisements the respondent has represented PARFU11IS LEXGYEL, LTD. 1019 1015 Findings that the perfumes, toilet waters and other cosmetic preparations sold and distributed by it are made or componnded in France and imported into the United States.

PAn. 6. The representations made by respondent with respect to the country in which its products are made or compounded are misleading and confusing. Perfumes, toilet waters, and other cosmetic preparations sold and distributed by the respondent are not made or compounded in France or any other foreign country and imported into the United States, but are made or compounded in the United States from essential ingredients which are imported from France and other European countries.

PAR. 7. There is a preference on the part of the purchasing public for perfumes, toilet waters, and other cosmetic preparations mtlde or compoundad in foreign countries and imported into the United Stutes. This is particularly true regarding perfumes, toilet waters~ und other cosmetic preparations made or compounded in France and imported into the United States. Such products, so made or compounded, and imported as above stated command and bring from the purchasing public a higher price in the markets of the United States than domestic perfumes, toilet waters, and other cosmetic preparations of the same nature and ·description. PAR. 8. There are among competitors of the respondent many who manufacture, distribute and sell perfumes, toilet waters, and other cosmetic preparations who truthfully represent the place or country in which their products are manufactured.

PAR. 9. The use of the statements and representations by respondent as herein set forth in connection with the sale and distribution of its products, has had nnd now has the tendency and capacity to mislead and deceive a substantial part of the purchasing public into the erroneous and mistaken belief that the said products are made or compounded in France and imported into the United States. As a result of this erroneous and mistaken belief a number of the purchasing public have purchased a substantial portion of respondent's products, with the result that trade has been unfairly diwrted to the respondent from its competitors engaged in the manufacture, sale, and distribution, or in the sale and distribution of perfume!:i,_ toilet waters, and other cosmetic preparations who truthfully represent the country or source of origin of their prouuets. As a conse- C)Uence thereof, substantial injury has been and is being done byrespondent to competition in commerce betn-een and among the various States of the United States and in the District of Columbia. Ft:DERAL TRADE COl\IMISSION DECISIONS1020 Order 29F.T.C.

CONCLUSION The aforesaid acts and practices of respondent as herein found are ull to the prejudice of the public and of respondent's competitors anJ constitute unfair methods of competition in commerce and unfair and deceptive acts and practices 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 a stipulation as to the facts entered into between the respondent herein and S. llrogdyne Teu, II, counsel for the Commission, the said stipulation of facts being made of record and in lieu of testimony in support of or in opposition to the charges in the complaint brief filed in support of the allegations of the complaint (respondent not having filed brief and oral argument not having been requested), and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It i8 ordered, That respondent, Parfums Lengyel, Ltd., its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of its perfumes, toilet waters aiel other cosmetic preparations in 'commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, through the use of any terms, words, symbols, or picturizations, indicative of French or other foreign origin of such products, or in any manner, that perfumes, toilet waters, or other cosmetic preparations which are made or compounded in the United States are made or compounded in France or in any other foreign country, provided however, that the country of origin of the various ingredients thereof may be stated when immediately accompanied with a statement that such products are made or compounded in the United States.

2. Using any French or other foreign terms or words except as provided in paragraph 3 hereof' to designate, describe, or in any way refer to perfumes, toilet waters, or other cosmetic preparations made or compounded in the United States unless the English translation or equivalent thereof appears as conspicuously and in immediate connection there,With.

PARFU11IS LENGYEL, LTD. 1021 1015 Ordet 3. Using any French or other foreign words or terms as brand or trade names for perfumes, toilet waters, or other cosmetic preparations made or compounded in the United States without clearly and conspicuously stating in immediate connection and conjunction therewith that such products are made or compounded in the United States.

It is further ordered, That the respondent shall, within GO 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 oruer.

:! 1:17111i"'-4U-vor.. :.U-·- 117 1022 FEDERAL TRADE CO~IMISSION DECISIONS Syllabus 29 F. 1'. C: