The Perasthman Company, Inc., and E. Fougera & Co., Inc.

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IN THE MATTER OF THE PERASTHMAN CO)fPANY, INC., AND E. FOUGERA & CO., INC.

COliPLAINT, FINDINGS, AND ORDER I:-1 REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CO:-IGRESS APPROVED SEPT. 26, 1914 Docket 3719. Complaint, Feb. 20, 1939-Decisio-n, Nov. 7, 1939 \Vhere a corporation and its exclusive distributor engaged in manufacture, sale, and distribution of first-name corporation's "Perasthman" of" ''Perasthman Tablets" for asthma, and acting together and In cooperation with one another in acts and practices below set out; in advertisements. which they disseminated through the mails, Insertions in newspapers and periodicals of general circulation, and in circulars and other printed o1· written matter, and by other means, and which were distributed in commerce among the various States and were intended and likely to induce purchase of their said product- ( a) Represented that preparation in question constituted a cure for asthma and an effective treatment therefor, and for tlle symptoms thereof, and was of substantial therapeutic benefit in such treatment; and (b) Represented that product in question was a new, sensational, European dl~covery, free from harmful drugs, and preparation which might be used promiscuously without harmful effects, and that use thereof was beneficial to all sufferers from said ailment and would as~mre nights of restful sleep and days of greater comfort, and stop wheezing and other symptoms of said condition;

Facts being 1t was not a cure therefor, nor of substantial therapeutic benefit In treatment thereof or of symptoms or manifestations of said condition, ephedrine, as only ingredient therein of any value to sufferers from asthma, had long been used by medical profession to afford, in some cases, temporary relief from symptoms or manifestations in question, and said preparation was neither new nor sensational and could not be used without harmful effects by all sufferers from asthma, but could only be used in limited quantities and under competent medical supervision by those with heart or kidney ailments, and might rt>sult, in case of unlimited and unsupervised use by such persons, in injury, and it had not accomplished and would not accomplish results claimed therefor, as above set forth, and only benefit that asthma sufferer could receive therefrom was temporary relief from some of manifestations of ailment, and it had not "freed" thousands or any other substantial number of asthma sufferers~ With effect of misleading and deceiving purchasing public into erroneous and mistaken belief that said preparation was a cure for or of therapeutic benefit in treatment of asthma or symptoms and manifestations thereof, and that other representations and implications set out were true, and of inducing purchasing public, because of such belief, to purchase Its said preparation, and with result of thereby unfairly diverting trade in commerce to them from those of their competitors who do not misrepresent efficacy and therapeutic value of. their products; to the substantial injury of competitm·s in commerce and to injury of public: THE PERASTHl\IAN C0.1 INC., ET AL. 1279 1278 Complaint Held, That such acts and practices, under the circumstances set forth, were n.ll to the prejudice and injury of the public and competitors and constituted unfair methods of competition ln commerce and unfair and deceptive acts and practices therein.

Before Mr. Miles J. Furnas, trial examiner. Air. John R. Phillips, h. for the Commission. - ·-' Mr. lValte~ L. Post, of New York City, for respondents. CmiPLAINT Pursuant to the provisions o£ the Federal Trade Commission Act,. ~nd by virtue of the authority vested in it by said act, the Federal 'Trade Commission, having reason to believe that The Perasthman Co., Inc., and E. Fougem & Co., Inc., hereh1after referred to as respondents, h:ave violated the provisions of the said act, and it appear.: ing to the 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:

P ABAGRAPH 1. The Perasthman Co., Inc., is a corporation created by and existing under the laws o£ the State of New York, with its princip-al office and place of business located at 276 Fifth A venue in the city of New York, State of New York. E. Fougera & Co., Inc., is a corporation created by and existing under the laws of the State o£ New York, with its principal offices and place of business located at 75 Varick Street in the city of New York, State of New York.

Respondent, The Perasthman Co., Inc., i.s now, and for more than 3 years last past has been, engaged in the manufacture of a proprietary medicine or preparation designated "Perasthman" or "Perasthman Tablets," an alleged remedy for asthma, and through the respondent, E. Fougera & Co., as its exclusive distributor, has been engaged in the business o£ selling and distributing said "Perasthman" or "Perasthman Tablets."

Respondents have acted together and in cooperation with each other in carrying out the acts and practices hereil1 alleged. PAR. 2. Respondents cause said medical preparation, when sold, to be transported from their places of business in the State of New York to the purchasers thereof located in various States of the United States other than New York and in the District of Columbia. Respondents maintain, and at all times. herein mentioned have maintained, a course of trade in said medical preparation sold and· distributed by theJn, in commerce between. and among the various States <lf the United States and in the District of Columbia. Complaint 29F. T. C.

PAR. 3. In the course and conduct of their said business, respondents are now, and have been, in substantial competition with other corporations and with partnerships and individuals engaged in the business of selling and distributing similar preparations and preparations used and useful for the alleviation of the ailments and conditions where respondents' said preparation might pe efficacious, in commerce between and among the various States of the United States and in the District of Columbia. There are among the competitors of respondents many who truthfully advertise and repref>ent their said preparations and their efficacy in use. PAR. 4. Respondents, in the course and conduct of their aforesaid business, have disseminated, and have caused, and are now causing, the dissemination of, false advertisements concerning their said product, by the United States mails, by insertion in newspapers and periodicals having a general circulation, and also in circulars and other printed or written matter, and by other means, all of which are distributed in commerce among and between tlle various States of the United States, for the purpose of inducing, and which are likely to induce, directly or indirectly, the purchase of their said product; and have disseminated, and are now disseminating, and have caused, and are now causing, the dissemination of false advertisements concerning their said product, by various means, for the purpose of inducing, and ,which are 1ilcely to induce, directly or indirectly, the purchase of their said product in commerce, as commerce is defined in the Federal Trade Commission Act. Among and typical of the false statements and representations contained in said alhertisements disseminated and caused to be disseminated as aforesaid are the following:

A revroduction of a line drawing, showing a kneeling female figure with one hand clasping her throat and nearby a large hand holding a whip, the whip lash encircling the woman's waist. neneath this drawing there appears in large caps the words "Slaves of Asthma." Following, in smaller capitals, are the words and phrases "Freed by the Thousands" and the following words and phrases:

Way to stop wheezing.

Wheezing stops.

Sleep soundly.

Quick relief.

Nights of restful sleep and days of g1·eater comfort. Sleep Is restful.

Without dangerous drugs.

Attacks curbed or completely ended.

A sensational new European discovery.

Through the use of the statements and representations hereinabove set forth, and others similar thereto not herein set out, all of which THE PERASTHMA~ CO., INC., ET AL. 1281 1278 Complaint purport to be descriptive of respondents' said preparation and its efficacy in the treatment of the ailment or condition commonly re~ ferred to as asthma and the symptoms and manifestations thereof, respondents represent and imply that said preparation will cure, or be of substantial therapeutic benefit in the treatment of asthma and the symptoms and manifestations thereof, and that said preparation is a new sensational European discovery, free from harmful drugs, and may be used promiscuously without harmful effects. Respondents further represent that the use of said preparation has "freed" thousands from asthma; that its use will benefit all sufferers from asthma, assuring nights of restful sleep and days of greater comfort; and that it will stop "wheezing" and other symptoms and manifestations of asthma.

PAR. 5. The foregoing repref:icntations and implications used and disseminated by the respondents as above described are grossly exag~ g;erated, misleading, and untrue and constitute false advertisements. In truth and in fact, respondents' said preparation is not a cure for asthma nor is it of substantial therapeutic benefit in the treatment of asthma, or the symptoms and manifestations thereof. The preparation is neither new nor sensational, as the only ingredient therein which is of any value to a sufferer from asthma is ephedrine, which has long been used by the medical profession, in some cases, to afford temporary relief from some symptoms or manifestations of asthma, but which is not used or recognized as a cure for asthma or the symptoms or manifestations thereof.

The pre.paration cannot be used without harmful effects by all sufferers from asthma, for the principal active ingredient therein, ephedrine, is not safe for use by persons with heart or kidney ail- . ments, except in limited quantities and under competent medical supervision. The unlimited and unsupervised use of the prepara~ tion by such persons may result in injury. The preparation has not "freed" thousands or any other substantial number of persons from asthma. It will not benefit all sufferers from asthma, nor does it assure the user of nights of restful sleep or days of greater comfort, and it will not stop "wheezing" or other symptoms or manifestations of asthma.

The only benefit that a sufferer from asthma could receive· from the use of said preparation is temporary relief from some of the manifestations of asthma.

PAR. 6. The above and foregoing representations and implications used by respondents as to the therape)ltic value and effect of their said preparation, in the course of their advertising, offering for sale, and sale of their said preparation in said commerce as aforesaid, have 1282 FEDERAL TRADE COMl\IISSION DECISIONS Findings 29F. T. C.

the capacity and tendency to, and do, mislead and deceive the purchasing public into the erroneous and mistaken belief that said preparation is a cure for, or of therapeutic benefit in the treatment of, asthma or the symptoms and manifestations thereof, and that the other representations and implications as hereinabove set out are true and have had, and do have, the capacity and tendency to, and do, induce the purchasing public because of such erroneous and mistaken belief to purchase respondents' said preparation, thereby unfairly diverting trade in said commerce to the respondents from those of their competitors who do not misrepresent the efficacy and therapeutic value of their said l)roducts. Thereby substantial injury is done to said competitors in commerce between and among the various States of the United States and in the District of Columbia, to the injury' of said competitors and to the injury of the public. PAR. 7. The aforesaid acts and practices of the respondents are all to the prejudice of the public and of respondents' competitors and 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. REPORT, FINDING3 AS ';1'0 THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on February 20, 1939, issued, and on February 21, 1939 served, its complaint in this proceeding upon the respondents, The Perasthman Co., Inc., and E. Fougera & Co., Inc., corporations, charging them 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. After the issuance of said complaint and the filing of respondents answer, the Commission, by order entered herein, granted respondents' motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final 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. THE PRRASTHl\IAN CO., INC., ET AL. 1283 1278 Findings FINDINGS AS TO THE FACTS P ARAGRAPII 1. The Perasthman Co., Inc., 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 276 Fifth Avenue in the city of New York, State of New York.

E. Fougera & Co:, Inc., is a corporation created by and existing under the laws of the State of New York, with its principal offices -and place of business located at 75 Varick Street in the city of New York, State of New York.

Respondent, The Perasthman Co., Inc., is now, and for more than 3 years last past has been, engaged in the manufacture of a proprietary medicine or preparation designated "Perasthman" or '"PE.'rasthman Tablets," an alleged remedy for asthma, and through the respondent, E. Fougera & Co., as its exclusive distributor, has been engaged in the business of selling and distributing said "Perasthman" or "Perasthman Tablets.'' Respondents have acted together and in cooperation with each <>ther in carrying out the acts and practices herein alleged. PAn. 2. Respondents cause said medical preparation, when sold, to be transported from their places of business in the State of New York to the purchasers thereof located in various States of the United States other than New York and in the District of Columbia. Respm1dents maintain, and at all times herein mentioned have maintained, a course of trade in said medical preparation sold and distributed by them, 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 their aforesaid business, re- :spondents are now, and have been, in substantial competition with other corporations and with partnerships and individuals engaged in the business of selling and distributing similar preparations and preparations used and useful for the alleviation of the ailments and conditions where respondents' said preparation might be efficacious, in ·commerce between and among the various States of the United States and in the District of Columbia. There are among the competitors -of respondents many who truthfully advertise and represent their :said preparations and their efficacy in use. PAR. 4. Respondents, in the course and conduct of their aforesaid business, have disseminated, and have caused, and are now ~ausing, the dissemination of, false advertisements concerning their said product, by the United States mails, by insertion in newspapers and periodicals having a general circulation, and also in circulars 1284 :FEDERAL TRADE COl\Il\IISSIO}l" DECISIOXS Findings 29F.T.C.

and other printed or written matter and by other means, all of 'which are distributed in commerce among and between the various States of the United States, for the purpose of inducing, and which are likely to induce, directly or indirectly, the purchase of their said product; and have disseminated, and are now disseminating, and have caused, and are now causing, the dissemination of false advertisements concerning their said product, by various means, for the purpose o£ inducing, and which are likely to induce, directly or indirectly, the purchase of their said product in commerce, as commerce is defined in the Federal Trade Commission Act. Among and typical of the false statements and representations contained in said advertisements disseminated and caused to be disseminated as aforesaid are the following:

A reproduction ot a line drawing, showing a kneeling female figure with one hand clasping her throat and nearby a Itu·ge hand holding a whip, the whip lash encircling the woman's waist. Beneath this drawing there appears in large caps the words "Slaves of Asthma." Following, in smaller capitals, are the words and phrases "Freed by the Thousands" and the following words and phrases:

Way to stop wheezing.

Wheezing stops.

Sleep soundly.

Quick relief.

Nights of restful slerp and days of greater cmnfort. Sleep Is restful.

Without dangerous drugs.

Attacks curbed or completely ended.

A sensational new European discovery.

Through the use of the statements and representations hereinabove set forth, and others similar thereto not herein set out, all of which purport to be descriptive of respondents' said preparation and its efficacy in the treatment of the ailment or condition commonly referred to as asthma and the symptoms and manifestations thereof, respondents represent and imply that said preparation will cure, or be of substantial therapeutic benefit in the treatment of asthma and the symptoms and manifestations thereof, and that said preparation is a new sensational European discovery, free from harmful drugs, and may be used promiscuously without harmful effects. Respondents further represent that the use of said preparation has "freed" thousands from asthma; that its w;e will benefit all sufferers from asthma, assuring nights of restful sleep and days of greater comfort; and that it will stop "wheezing" and other symptoms and manifestations of asthma.

PAR. 5. The foregoing representations and implications used and disseminated by the respondents as above described are grossly exag- THE PEilASTHl\IAN CO., INC., ET AL. 1285 1278 Findings gerated, misleading and untrue and constitute false advertisements. In truth and in fact, respondents' said preparation is not a cure for asthma nor is it of substantial therapeutic benefit in the treatment of asthma or the symptoms and manifestations thereof. The preparation is neither new nor sensational, as the only ingredient therein which is of any value to a sufferer from asthma is ephedrine, which has long been used by the medical profession, in some cases, to afford temporary relief from some symptoms or manifestations of asthma, but which is not used or recognized as a cure for asthma or the symptoms or manifestations thereof.

The preparation cannot be used without harmful effects by all sufferers from asthma, for the principal active ingredient therein, ~pheddne, is not safe for use by persons with heart or kidney ailments, except in limited quantities and under competent medical ~upervision. The unlimited and unsupervised use of the preparation by sneh persons may result in injury.

The preparation has not "freed'' thousands or any other substantial number of persons from asthma. It will not benefit all sufferers from asthma, nor does it assure the user of nights of restful sleep or days of greater comfort, and it will not stop "wheezing" or other symptoms or manifestations of asthma.

The only benefit that a sufferer from asthma could receive from the use of said preparation is temporary relief from some of the manifestations of asthma.

PAn. 6. The above nnd foregoing representations and implications used by respondents as to the therapeutic value and effect of their said preparation, in the course of their advertising, offering for sale, and sale of their said preparation in said commerce as aforesaid, have the capacity and tendency to, and do, mislead and deceive the purchasing public into the erroneous and mistaken belief that said preparation is a cure for, or of therapeutic benefit in the treatment Df, asthma or the symptoms and manifestations thereof, and that the {)ther representations and implications as hereinabove set ·out are true and have had, and do have, the capacity and tendency to, and <lo, induce the purchasing public because of such erroneous and mistaken belief to purchase respondents' said preparation, thereby unfairly diverting trade in said commerce to the respondents from those of their competitors who do not misrepresent the efficacy and therapeutic value o£ their said products. Thereby substantial injury is done to said competitors in commerce between and among the various States of the United States and in the Distrirt of Columbia, to the injury of said competitors and to the injury of the public. 1286 FEDERAL TRADE COl\!1\IISSION DECISIONS Order 29F. T. C.

CONCLUSION The aforesaid acts and practices of the respondents, as herein found, are all to the prejudice and injury of the public and of respondents' competitors and 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 the answer of respondents, in which answer respondents admit all the material allegations of fact set forth in said complaint, and state that they waive all intervening procedure and further hearing as to said facts, 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 i.s ordered, That the respondents, The Perasthman Co., Inc.~ and E. Fougera & Co., Inc., corporations, their officers, agents, servants, representatives, and employees, directly or through any corporate or other device, do forthwith cease and desist from: Disseminating or causing to be disseminated any advertisement by means of the United States mail or in commerce, as commerce is defined in the Federal Trade Commission Act, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of the medicinal preparation, containing drugs, now designated "Perasthman" and "Perasthman Tablets," or any other medicinal preparation composed of substantially similar ingredients, or possessing substantially similar therapeutic properties, whether sold under the same name or any other name or names, or disseminating or causing to be disseminated any advertisement by any means for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase in commerce, as commerce is defined in the Federal Trade Commission Act, of said medicinal preparation, which advertisements represent, directly or through implication, that said preparation is a cure for asthma or is an effective treatment for asthma or the symptoms thereof, or that said preparation h.as any therapeutic value in the treatment of asthma other than affording, in some cases, temporary relief from some of the symptoms of asthma; that said preparation is new or sensational or that the use thereof is beneficial to all sufferers from asthma; that said preparation is harmless or that the use thereof will assure su£- THE PERASTHl\IAN CO., INC., ET AL. 1287 1278 Order ferers from asthma, nights of restful sleep or days of greater comfort or will stop wheezing or other symptoms of asthma; or which advertisements fail to reveal that said preparation is not safe if ·used in self-medication by members of the lay public suffering from heart or kidney ailments.

It is further ordered, That the respondents shall, within 60 days after the service upon them of tlus order, file with the Commission a report in writing setting forth in detail the manner and form in which they ha.ve complied with this order. Syllabus !.!9F.T.C.