Patch Premek Corp

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IN THE MATTER OF PATCH PRE!IIEK CORPORATION, AND H. K. PATCH, TRADING AS H. K. PATCH COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD 'l'O THE ALLEGED VIOLATION 01!' SEC. 5 OF AN ACT OF CONGRESS Al'l'ROVED SEPl'. 26, l!l14 Doclwt 3-16!1. Complaint, Sept. 27, 1!JJ8 '-Decision, Mar. 29, 19-W Where a corporation and an individual, who was president thereof and controlled and directed its business activitie!>, sales policies, and practices, engaged in sale and distribution of their "Premek 33," or "C. S. 1i3," medicinal prepamtion for various ailments, diseases, and conditions, to purchasers at various points in various other States, in substantial competition with others engaged In sale and distribution, in commerce among the various States, of preparations for use In eouuection with treatment of ailments, diseases, and conditions for which they recommended and claimed their saltl preparation to be effective and competent treatment, and including many who do not in uny manner misrepresent the character, nature, and therapeutic properties of their products; in advertisements which they disseminated, In cooperation with one another In acts and things below set forth, through newspapers and other periodicals of general circulation throughout the various States, and through booklets, leaflets, pamphlets, and other printed matter distributed among prospective customers- (a) Represented that thelr said preparation was an amazing new discovery, and the most effective way to end irritations of all kinds, and that it constituted most effective treatment for, and would end, numerous ailments and conditions, including, among others, eczema, athlete's foot, prickly heat, skin irritations and rashes, acne in various forms, and dandrutT and eczema; and (b) Represented that use ther·eof would stop perspiration and provided only sure way to prevent noxious body odors, and that it was a bactericide which would prevent reinfection and which penetrated skin pores and deep-seated organisms, and killed parasites re~ponsible for irritation, and that it hall been successful In the treatment of chronic irritations where other medica tlons had failed ;

lo'ucts being that only ingredit>nt in preparation in question of therapeutic consequence was sulfur in colloidal or finely dh·ided form, which was neither new nor amazing discovery, bnt had been in use as an adjunct or accessory in medication generally for n long time, most that could properly be claimed for preparation In question, excepting as to scabies, was that under proper direction or medical supervision it might be used as beneficial accessory treatment In case of some of conditions or ailments in question resulting from superficial or external causes, and it was not a quick or effective treatment for, and would not cure, any of conditions, symptoms, or ailments In question, with exception aforesaill, and It was not a bactericide and would not accomplish results claimed therefor as above, and claims as to Its therapeutic value and properties greatly exceeded those which might truthfully be made for such a product; 1 Amended and supplemental.

Complaint 30 1<', T. C. With effect of misleading and deceiving substantial portion of purchasing public into erroneous and mistaken belief that such false statements, representations, ami allvertisements were true, and that their products possessed properties claimed and represented, and would accomplish such results, anll of causing purcha~e of substantial quantities thereof as consequence of such beliefs, thus induced, and of thereby unfairly diverting to themselves trade from their competitors; to the substantial injury of competition in commerce:

Ileld, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public and competitors, and constituted unfair methods of competition in commerce and unfair acts and practices therein.

Before Mr. Charles P. Vicini and Mr. John J. Keenan, trial exam- Iners.

Mr. Jes:se D.l(ash for the Commission.

Al\IENDED AND Supplemental Col\IPLAINT 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 Patch Premek Corporation, a corporation, and H. K. Patch, individually, and trading under the firm name and style, H. K. Patch Co., hereinafter referred to _as respondents, have 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 amended and supplemental complaint, stating its charges in that respect as follows :

PARAGRAPH 1. Respondent Patch Premek Corporation is a corporation organized, existing, and doing business under and by virtue of the laws of the State of California with its principal office and place of business at 1716 East Seventh Street, Los Angeles, Calif. Respondent H. K. Patch, who is president of said respondent Patch Premek Corporation, controls and directs the business activities, sales policies, and practices of the respondent Patch Premek Corporation. Said respondents have cooperated each with the other and have acted in concert in doing the acts and things hereinafter alleged. Respondents are now and have been for some time last past engaged in the business of selling and distributing a certain purported medicinal preparation which is recommended for use in the treatment of various ailments, diseases, and conditions which may be present or exist in the human body. This product is known as, and sold under the name of "Premek 33," and is similar to a preparation sold by the respondents to the medical profession under the name and designation of "C. S. 53."

PATCH PR;EM:EK CORP., ET AL. 859 8()7 Complaint PAR. 2. Respondents, in the course and conduct of their said business, cause said product, when sold, to be transported from their said place of business in the State of California to the purchasers thereof located at various points in the several States of the United States other than the State of California. Respondents maintain, and at all times mentioned herein have maintained, a course o£ trade in said preparation in commerce between and among the various States o£ the United States, in the District of Columbia, and with foreign countries.

Respondents have been and are in substantial competition with corporations, firms, partnerships, and individuals likewise engaged in the business of selling and distributing in said commerce preparations for use in connection with the treatment of the ailments, diseases, and conditions for which the respondents. represent and claim their preparation to be an effective and competent treatment. There are among the competitors of the respondents in said commerce many who do not in any manner misrepresent the character, nature, and therapeutic properties of the products sold and distributed by them.

PAR. 3. In the course and conduct o£ their said business and for the purpose of inducing the purchase of their said preparation, respondents have caused false advertisements containing representations and claims with respect to the character, nature, and properties of said preparation and the results that may be expected to be obtained upon the use thereof to be disseminated in commerce as defined in the Federal Trade Commission Act through the use of advertisements in newspapers and other periodicals having a general circulation throughout the various States of the United States and through the use of booklets, leaflets, pamphlets, and other printed matter distributed among prospective purchasers. Among others, and typical of the representations and claims contained in said false advertisements so used and disseminated as aforesaid, the respondents represent that their said preparation is nn amazing new discovery; that it is the most effective way to end irritations of all kinds; that it is the most effective treatment for and that its use will end eczema, athlete's foot, dhobie and jock strnp itch, prickly heat, insect bites, dermatitis herpetiformis, skin irritations and rashes, pimples, bar- ~r's itch, chafing, shingles, ringworm or epidermophytosis, scabies, Impetigo, acne in various forms, pruritus, aching feet, soft corns, ~andruff and eczema of the scalp, furnuculosis of the enr canal; that Its use will stop perspiration and it provides the only sure way to prevent noxious body odors; that it is a bactericide and will prevent reinfection; that it penetrates the skin pores and deep-seated organ- Comvlalnt 30I<'.T.C. Isms and kills the parasites which cause irritation; and that it has been successful in the. treatment of chronic irritations where other medications have failed.

PAR. 4. The aforesaid representations and claims used and designated by the respondents in the manner above described are grossly exaggerated, misleading and untrue, and constitute false advertisements. In truth and in fact "Premek 33" is by quantitative analysis shown to contain :

Percent Colloiual elemental sulfur_________________________________ GO.OO Magnesium oxide_________________________________________ 3.00 Resublimed beta-naphthoL________________________________ .20 Glycerine_________________________________________________ 5.00 Gum arabi<'---------------------------------------------- 5.00 Wa t!'·r --------------------------------------------------- 36.8 and the only ingredient therein of consequence therapentically is the colloidal or finely divided sulfur, and sulfur is neither a new nor an amazing discovery but has been in use as an adjunct or accessory in medication generally for a long time. Said preparation is not a quick or effective treatment for nor will it cure any of the conditions, symptoms, or ailments hereinabove mentioned except scabies. Its use in some of such conditions is fraught with possible danger to the public health. Except as to scabies, the most that can be accomplished by, or properly claimed for, respondents' said preparation is that as to some of the conditions or ailments mentioned, which result from superficial or external causes, said preparation may be used under proper direction or medical supervision as a beneficial accessory treatment. Said preparation is not a bactericide, does not prevent reinfection and does not penetrate sufficiently to destroy subcutaneous parasites which cause irritation. Respondents' claims as to the therapeutic value and properties of said preparation greatly exceed those which might truthfully be made for such a preparation.

PAR. 5. The use of the aforesaid false advertisements, disseminated in the manner above described, induces or is likely to induce, directly or indirectly, the purchase of a drug.

PAR. 6. The use by respondents of the foregoing false, deceptive, and misleading statements, representations aud advertisements, disseminated as aforesaid, with respect to said preparation, has had, and now has, the capacity and tendency to, and does, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such false statements, representations, and advertisements are true and that respondents' said preparation possesses the properties claimed and represented and will accomplish the results represented, and causes the purchase of ~mbstautial quantities of PATCH PR:EMEK CORP., Err AL. 861 S57 Findings respondents' said preparation as a result of the erroneous and mistaken beliefs induced as aforesaid. As a result, trade has been diverted unfairly to the respondents from their competitors in said commerce who truthfully advertise the effectiveness and use of their respective products. In consequence thereof, injury has been, and is now being, done by respondents to competitors in commerce among and between the various States of the United States and in the District of Columbia, and with foreign countries.

PAR. 7. The aforesaid acts and practices of the respondents as herein alleged are all to the prejudice and injury of the public and of respondents' competitors and constitute unfair methods of competition and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on the 28th day of June 1938, issued, and on the 5th day of July 1938, served its complaint in this proceeding upon the respondent Patch Premek Corporation, a corporation charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. Said Patch I)remek Corporation filed its answer to said complaint on the 18th day of July 1938. On September 27, 1938, the Commission issued, and subsequently served, its amended and supplemental complaint in this proceeding, upon said Patch Premek Corporation, and also upon the respondent H. K. Patch, an individual, trading as H. K. Patch Co., charging them with the use of unfair methods of competition in commerce and unfair acts and practices in commerce in violation of the provisions of said act. Thereafter, and after certain hearings had been held in this proceeding, the Commission, by order entered herein, granted the request of respondent Patch Premek Corporation for permission to withdraw its answer filed on ,July 18, 1938, and to substitute therefor an answer admitting all of the material allegations of fact set forth in said amended and supplemental complaint, with one exception therein specified. Said substitute answer, which Waived all intervening procedure and further hearings as to said facts was duly filed in the office of the Commission. The respondent II. K. Patch joined in said substitute answer. Thereafter, this P.roceeding regularly came on for final hearing before the Commis- Slon on said complaint and substitute answer at11l 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 I<' in dings 30F.T.C.

public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Patch Premek Corporation, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of California, with its principal office and place of business at 1716 East Seventh Street, Los Angeles, Calif. Respondent H. K. Patch, an individual, is president of said respondent, Patch Premek Corporation, and controls and directs the business activities, sales policies and practices of respondent, Patch Premek Corporation. Respondent, H. K. Patch also trades under the name of H. K. Patch Co. Said respondents have cooperated each with the other and have acted in concert in doing the acts and things hereinafter alleged. Respondents are now and have been for some time last past engaged in the business of selling and distributing a certain medicinal preparation which is recommended for use in the treatment of various ailments, diseases, and conditions which may be present or exist in the human body. This product is known as, and sold under the name of "Premek 33" and is also sold by the respondents to the medical profession under the name and designation ' 1C. s. 53."- PAR. 2. Respondents, in the course and conduct of their said business, cause said product, when sold, to be transported from their said place of business in the State of California to the purchasers thereof located at various points in various other States of the United States. Respondents maintain and at all times mentioned herein have maintained a course of trade in said preparation in commerce between and among the various States of the United States, in the District of Columbia, and with foreign countries. Respondents have been and are in substantial competition with corporations, firms, partnerships, and individuals also engaged in the business of selling and distributing in commerce among and between the various States of the United States preparations for use in connection with the treatment of the ailments, diseases, and conditions for which the respondents represent and claim their preparation to be an effective and competent treatment. There are among the competitors of respondents in said commerce many who do not in any manner misrepresent the character, nature, and therapeutic properties of the products sold and distributed by them.

PAR. 3. In the course and conduct of their said business and for the purpose of inducing the purchase of their said preparation, respond· PATCH PREM:EK >CORP., 'ET AL. 863 857 Findings ents have caused false advertisements containing representations and claims with respect to the character, nature and properties of said preparation and the results that may be expected to be obtained from the use thereof, to be disseminated in commerce, as "commerce" is defined in the Federal Trade Commission Act, through the use of ad. vertisements in newspapers and other periodicals having a general circulation throughout the various States of the United States, and through the use of booklets, leaflets, pamphlets, and other printed matter distributed among prospective customers. Among others and typical of the representations and claims contained in said :false advertisements so used and disseminated as aforesaid, the respondents represent that their said preparation is an amazing new discovery; that it is the most effective way to end irritations of all kinds; that it is the most effective treatment for and that its use will end eczema, athlete's :foot, dhobie and jock strap itch, chafing, shingles, ringworm or epidermophytosis, prickly heat, insect bites, dermatitis herpetiformis, skin irritations and rashes, pimples, barber's itch, scabies, impetigo, acne in various forms, pruritus, aching :feet, soft corns, dandruff and eczema of the scalp, furnuculosis of the ear canal; that its use will stop perspiration and it provides the only sure way to prevent noxious body odors; that it is a bactericide and will prevent reinfection; that it penetrates the skin pores and deep-seated organisms and kills the parasites which cause irritation; and that it has been successful in the treatment of chronic irritations where other medications have failed.

PAR. 4. The Commission finds that the statements and representations hereinabove set forth in paragraph 3 hereof, and others similar thereto, all of which purport to be descriptive of the remedin.I, curative, or therapeutic properties of respondents' product, are grossly exaggerated, misleading and untrue and constitute :false advertisements. In truth and in fact, "Premek 33" is by quantitative analysis shown to contain:

Percent Colloidal elemental sulfnr _________________________________ 50.00 ~Iagnesiuin oxide----------------------------------------- 3.00 llesublimed beta-naphthoL________________________________ . 20 Glycerine __ r---------------------------------------------- 5. 00 Gum arabic---------------------------------------------- 5. 00 'Vater --------------------------------------------------- 36. 8 and the only ingredient therein o£ consequence therapeutically is the colloidal or finely divided sulfur, and sulfur is neither n, new or an amazing discovery, but has been in use as an adjunct or accessory in Dledication generally for a long time. Said preparation is not a quick or effective treatment nor will it cure any o£ the conditions, Order 30F. T. C.

symptoms, or ailments hereinabove mentioned except scabies. Except as to scabies, the most that can be accomplished by, or properly claimed for respendents' said preparation is that as to some of the conditions or ailments mentioned, which result from superfici~tl or external causes, said preparation may be used under proper direction or medical supervision as a benficial accessory treatment. Said preparation is not a bactericide, does not prevent reinfection, and does not penetrate sufficiently to destroy subcutaneous parasites which cause irritation. Respondents' claims as to the therapeutic value and properties of said preparation greatly exceed those which might truthfully be made for such a preparation.

PAR. 5. The Commission finds that the aforesaid false advertisements disseminated in the manner above described induce or are likely to induce, directly or indirectly, the purchase of a drug. PAR. 6. The Commission finds that the use by respondents of the foregoing false, deceptive, and misleading statements, representations and advertisements disseminated as aforesaid 'with respect to said preparation has had and now has the capacity and tendency to, and does, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such false statements. representations, and advertisments are true and that respondent's said preparation possesses the properties claimed and represented and will accomplish the results represented, and causes the purchase of substantial quantities of respondents' said preparation as a result of the erroneous and mistaken beliefs induced as aforesaid. As a result, trade has been diverted unfairly to respondents from their competitors, and in consequence substantial injury has been done and is being done by respondents to competition in commerce among and between the various States of the United States and in the District of Columbia.

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 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 Commis~ sion upon the amended and supplemental complaint of the Commission and the answer of respondents, in which answer respondents admit all the material allegations of fact SC't forth in said amendf'd PAT<JH PREMEK CORP., ET AL. 865 857 Or tier and supplemental complaint, with one exception therein specified, and ~;tate that they waive all intervening procedure and further hearing as to the facts, and the Commission having made its findings as to the f_acts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act. It i.~ ordered, That the respondents Patch Premek Corporation, a corporation, and its officers, and H. K. Patch, individually and trading as H. K. Patch Co., or trading under any other name or names, their respective representatives, agents, 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 United States mails or in conunerce, as "commerce" is defined in the Federal Trade Conunission Act, by any means, for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase of a medicinal preparation now designated as "Premek 33" and "C. S. 53" or any other preparation composed of substantially similar ingredients or possessing substantially similar therapeutic properties, whether sold under the same name or under 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 Conunerce Act, of said medicinal preparation, which advertisements represent, directly or through implication.

1. That said preparation is a cure, or remedy for eczema, athlete's foot, dhobie or barber's itch, jock strap itch, prickly heat, insect bites, dermatitis herpetiformis, skin irritations or rashes, pimples, chafing, shingles, ringworm or epidermophytosis, impetigo, acne, pruritus, aching feet, soft corns, dandruff, eczema of the scalp or furnuculosis of the ear canal, or that said preparation constitutes a competent or effective treatment for any of said ailments or conditions other than to serve as an accessory treatment for those which are due to superficial or external causes only.

2. That said preparation is a bactericide or that it will prevent rein feet ion.

3. That the use of said preparation will stop perspiration or prevent body odors. . 4. That said preparation is a "new" or an "amazing" discovery. It i,y 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.

Syllabus 30F. ·r. c.