Bortz, D. J

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IN THE MATTER OF D. J. BORTZ AND EDITH BORTZ, TRADING AS CHAMPION BATTERY COMPANY AND THE BALL COMPANY CO:\!PL.UNT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APl'ROVED SEPT. 26, 1914 Docket 4134. Complaint, JJ!a.y 16, 1940-Decision, Dec. 18, 1941 'Where two individuals, engaged under the names, "The Ball Co." and "Champ· • ion Battery Co.," In the competitive interstate sale and distribution to retailers of so-called sales promotional plans, involving (1) in its dealing under former name, units for which the dealer paid 5 cents to their representative and undertook to pay balance of 15 cents, upon delivery, without prior opportunity for inspection, and which consisted of gift certificate, "Ivory ware" cup, saucer and cereal dish, and printed handbills and pennants or posters for the merchant's use, the scheme purportedly contemplating that $5.00 In purchases, when stamped out on his certificate, en· titled a customer to receive said oishes from the dealer with the further prol"ision that the dealer sending in such punched-out certificate, together with name and address of customer and 30 cents for an additional unlt of such "ivory ware", was entitled to 23 cents refund; and Involving, (2) when trading under latter name, a purported selling plan, varying from the former, In that when the punched-out certificate was sent to them with name of the customer·, it was to be accompanied by a varying remittance for a so-called trial order of dry batteries, depending on the particular novelty desired by the customer, and the 20 cents paid by the dealer for certificate was to be refunded- ( a) 1\Iade lJSe, as aforesaid, of trade name "The Ball Co." in ofrer and sale of their first-described promotloual sales plan and dinner ware, and in their contract forms and on letterheads displayed the heading "The Ball Co., Dinnerware Department"; and represented, tht·ough their sales representath·es, that such concern was a department of, or connected with, or a representative of, the well known Ball Brothers Company, manufacturers of mason jars, and that said plan was an effort on the part of the latter to recoup lost sales volume attributed to increased use of tin and other food contniners, and was to Introduce the new dinnerware made by said Ball Bros. Co., and, further, that the retail dealer might become the representative of said company and receive substantial profits on future sales of such dinnerware; .

(b) Concealed, in some instances, the fact that the dealer would not receive a rto>fund unless additional purchasi's were made by his customer, and ·displnyed to dealers, as samples of the ware, merchandise of substantially bettt>r grade arid more attractively colored and decorated than that actually fui·nished;

(c) l\Iade use, as aforesaid, of name "The Champion Battery Co." in offer and sale of tlielr said promotional sales plan Involving batteries, and represented, through their sales representatives, that they were agents of, or 466506"'-42-VO}. 34--28 Syllabus 34F. T. C.

that their said concern was connected with, the wt:>ll·known Champion Spark Plug Co., of Toledo, Ohio; that latter was commencing the mann· facture of batteries, and that the sales plan offered was to advertise the new line; and that great pl"Ofits could be made from future resale of bat· teries which would be promoted by extensive advertising by the concern above referred to; and dif;played, offered and ~;old, in "mch connection, batteries marked and designated as "Champion"; (d) Concealed the fact that the dealt:>r's customers would have to purchase bat· teries in ortler to secure the novelties included in the plan, by misrrpre sentations or by failure to exhibit a true copy of the so-called "adverti~ing gift check," and rt:>p1·esented the number of samples of such novelties to be furnished to tlJe dealer as greatet• than the number actually furnished; and. (e) Represented, through the advt:>rtisi11g harulbills fumi:shed to contracting dealers for the sales promotion plan offered under the name of "Champion Battery Co." that the various no,·eltles were available to customers of the purchasing dealer "fre~" when in fact the cost of such articles was included in the p1·ice of the batteries which had to be pm·chased to o!Jtain them; Notwithstanding the fact they were in no wn~· connected with the r.au llros. Co. of 1\luncle, Ind., long time manufacturer of glass f~uit jars, or with the Champion Spark Plug Co. of Toledo, Ohio, 11rotlncts of both of which were well and favorably known to the Jmrchasing public, nor were their dinner· ware, or their so-culled "Champion" batteries, respec~ively,.products of said companies;

With intent and effect of misleading and deceiving many members of the public who had eonfidt•nce in the ufort>said companies and their products Into the purchase of their so-called promotional sales plans and nccompanying nwrchandise, in the false belief that they were dealing with or securing the products of said llall Bros. Co. or Champion Sparlc Plug Co., and of mis· leading and deceiving their customers into the belief that they were connected with said widely-known companies and dealt In their products; and (f) Frequently misrPvre;;;ented, through their sales rerre;;;entntive;;;, the quan· titles of handbills and nd,·ertising pf'nntlllt"' or posters whleh would be furnished to the purchasing dealer, and di;;;played purported samples of such advertising material far superior to that actually furnished; (g) Represented, as aforeflaitl, that tht>y were introducing a new line of mer· chandise, and that the sales plan offered was for the tmrtJ08e of bdnging it to the attention of the public, and made numerous othet· false t•repre· sentations to induce purchases; and (h) Made use of a form of contract or agreement whkh }JroYided that the purcha~lng dealer had rend Its terms, that the ordet· was not subject to change or cancellation, and that "No terms or representations excf'pt us printed herein will be recognized by this company," notwithstanding which they accepted the benefits of ord£"rS which conta !ned written altemtions of the printed terms, and, while collecting the full amount due therenndet·, complied only In part with the alter"ed te1·ms; \With effect of misletHling und <lPceiYing retail dPale1·s Into vurchase of their so-culled sales promotional plans and accomrlunylng merchandise, In re· liance upon such mlgw"I'Ill"!'sentations, of plndng In the hands of dealers a means and lnstrumentullty whereby the latter might mlslend and deceiye CHA.MPION\ BATT'EIRY CO., ETC. 435 433 Complaint the consuming 11ublic, !md of unfairly diverting trade in commerce to them from their competitors; to the injury of such competitot·s and the pu~lic: Helt~, That such methcds, acts and practices wer·e all to the {ll'ejudice of the public and comp<-'titors, and constituted unfair mNhod8 of comprtition in commPrte awl unfair and deceptive acts and p!'llctiees tht>rt>in. Before JJ!r. lVillimn C. Beeves, trial examiner. lltr. !ffau.rice C. Pearce for the Commission. Mr. William ll. Campbell, of Detroit, Mich., for respondents. Col\IPLAINT Pursuant to the provisions of the Federal Trade Commission Act, ancl by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to bE>lieve that D. J. Bortz and Edith Bortz, individually, and trading as Champion flattery Co., and the Ball Co., respectiwly, hereinafter referred to as respondents, have violated the provisions of said act, nnd it appearing to the Commission that a proceeding by it in 1·espect thereof would be in the public interest, hereby issues its complaint stating it charges in that respect as follows: , PARAGRAPH 1. Respondents, D. J. Bortz and Edith Bortz, are individuals doing business under the trade names of Champion Battery Co., and the Ball Co., with their principal office and place of business located in Room 403, Morgan Building, Detroit, Mich. Respondents are now, and since the early part of the year 1939 have been, engaged in the sale and distribution in commerce among and between tlte various States of the United States and in' the District of Columbia of certain so-called sales promotional plans, including, in connection therewith, the sale and distribution of "advertising gift checks," "gift certificates," and various articles of merchandise, novelty gifts, and premiums. Respondents cause. such advertising gift ~checks, gift certificates and articles of merchandise, including novelty gifts, and premiums used in connection with the operation of their so-called sales promotional plans, when sold, to be transported from their place of businE'i'iS in the State of Michigan to purchasers thereof located in the various States of the United States other than the State of Michigan and in the District of Columbia. Respondents maintain, ami at all times mentiotwd herein have maintained, a course of trade in the sale and distribution of said so-called sales promotional plans and articles of merchandise, including nowlty gifts and premiums used in connection with the operntion of tlle same, in commerce among and between the various States of the United States and in tJ1e District of Columbia.

DECISIO~S436 FEDERAL TRADE COMMISSION Complaint S4F. T. C.

PAR. 2. Respondents~ in the course and conduct of the business conducted by them under the respective trade names Champion Battery Co. and the Ball Co., are now and at all times herein mentioned have been in substantial competition with other individuals and with corporations, partnerships, and firms likewise engaged in the sale and distribution in commerce of so-called sales promotional plans which include or employ in their operation "advertising gift checks," "gift certificates," and other articles of merchandise, including novelty gifts, and premiums.

PAR. 3. Respondents, through their agents and salesmen, solicit and sell their so-called sales promotional plants to retail dealers located in various States of the United States. Said "advertising gift checks" consist of cards describing novelty gifts and premiums and containing figures on the margin thereof aggregating $5. Through the operation of said plans, as represented by agents of respondents, the dealer distributes such checks among his customers and prospective customers, and as purchases are made by such customers, •the dealer punches the figure on the margin of the check corresponding to the amount purchased. 'Vhen the entire amount has been punched out on the check, the customer or the dealer, in the case of the Champion Battery Co., may forward the gift check to respondents with a purchase order of batteries and bulbs and receive in return, in addition to batteries and bulbs ordered, one of the novelty gifts described in said check, as selected by the customer. In the case of the so-called sales-promotional plan operated in the name of the Ball Co., the customer, on surrendering the gift check, is to be supplied with pieces or combination sets of dinnerware.

Said "advertising gift checks~' and "gift certificates" are sold to dealers in minimum orders of 100 and 200, respectinly, for which the dealer pay.s 20 cents per check or certificate, or $20 for an order of 100 and $40 for an order of 200. The amount paid by the dealer for· each check, in the case of the Champion Battery Co., is to be refunded to him when the full amount on a gift check has been punched out and the check forwarded to respondents for redemption by either the dealer or the customer, together with 20 cents for a purchase order of batteries. In the case of the Ball Co., the amount paid by the dealer is to be refunded to him when the full amount of the gift certificate has been punched out and the certificate, with the name and address of the customer appearing thereon, is for· warded to the respondents for redemption by the dealer. Respondents furnish the dealer with various advertising handbills, which are headed with the word "Free" in large letters and CHAMPION BATTEIRY CO., ETC. 437 433 Compjaint describe the premiums offered, to be used by said dealer in putting the aforesaid plan into operation and effect. PAR. 4. Respondents, doing business under the respective trade names Champion Battery Co., and the Ball Co., as aforesaid, through their salesmen and agents, make many false and. mislead.ing statements, and representations with respect to their so-called sales promotional plans. In soliciting dealers and with a view to making sales contracts and increasing their business, respondents repres.ent that Champion Battery Co. is a representative of, or connected with, and is putting on an advertising campaign for, the Chalnpion Spark Plug Co., which has earned a valuable good will and reputation through the manufacture and sale of "Champion Spark Plugs," and which is located at VOO Upton Avenue, Toledo, Ohio. Respondents represent further that the dealers' customers, upon forwarding the advertising gift checks to respondents for redemption, will receive various articles of merchandise "Free" in the way of jremiums or prizes, and that so-called sales promotional plan will be without cost to the dealer in that the amount paid for such advertising gift checks by the dealer will be refunded by respondents upon redemption of the said checks. Respondents further represent that the dealer will be furnished a certain designated number, of advertising handbills of attractive design and superior quality, the same being exhibited to the dealer, and attrnctive samples of substantial novelty gifts to be displayed by the dealer in putting the plan into operation and effect; that the plan has been designed to facilitate the advertising of a new line of batteries; that the novelty premiums are to be delivered to customers on a deposit of 20¢ for a purchase order of batteries with the gift check completely punched; and that the batteries sold by respondents are manufactured by the Champion ·Spark Plug Co.

Similarly, respondents rE>present that the Ball Co. is connected with, or a representative of, Ball Brothers Co., of Muncie, Ind., which has earned a favorable reputation and vahiable good will through the manufacture and sale of glass fruit preserving jars; that because, of the decline in the fruit preserving jar business during recent years due to increasing use of tin products, the Ball Co. has decided to introduce a new line of colored chinaw~tre with a view to recouping lost sales volume. Respondents further represent that the dinner· ware supplied in connection with the operation of the so-called sales promotional plan is of a high grade, of celebrated type known as "Fiesta," and attractive samples of such ware, in red and blue, green and yellow, are exhibited to prospective dealer-customers by respond- 438 FEDERAL TRADE COMMISSION DECISIO);'S Complaint 34F. T. C.

ents' sales repre!:;entatives. Prospc;cth·e dea ler-customers are assured by respondents' sales agents that the amount paid for gift certificates by the deal~:-r will be refunderl by respondents upon redemption o£ the said certificates. Respomlents likewise represent that the dealer will be furnished a certain llesignated number of adwrtising handbills of attractive design ami quality and three-piece units of colored Fiesta dinnerware for each gift certificate, to be used by the dealer in supplying the customers who surrender their certificates for redemption. Respondents' salesmen impress customers with the ide:t that the so-called sales promotional plan is to facilitate the advertising of a new line of dinnerware, to stimulate the sale of the same through retail store channels, ami that the dinnerware sold by respondents is manufactured by the well-known Rlll Brothers Co. PAR. 5. Respondents' representations as herein set forth are grossly exaggerated, false, misleading, and untrue. In truth and in fact, respondentftfloing business under the trade name Champion Battery Co. are not representatives of, or connected with, or putting on an advertising campaign for, the Champion Spark Plug Co. Dealers are not reimbursed for the sums paid by them to respondents in advance for sales checks or certificates. The "free" premium or prize that is sent to customers of dealers is not free to said customers but they are, on the contrary, required in each jnstance to pay a larger stlm of money for the purchase of a designated number of flash light batteries and bulbs than had been represented to them or was understood by them, which sum of money is substantial and represents full payment for said flash light batteries, bulbs, and premiums or prizes received. Dealers are not furnished the designated number of advertising handbills promised and those furnished are cheap and unattractive and far inferior to sample advertising matter shown by agents. Novelty gifts shipped are short of the number promised and inferior to samples shown. Gift samples are likewise short of the number promised and of inferior quality. Respondents' plan is not designed to facilitate the adnrtising of a new line of batteries. Premiums are no~ delh·ered to customers as represented on a deposit of 20 cents for a purchase order of batteries and bulbs when the gift check is completely punched. The batteries sold by respondents are not manufactured by Champion Spark Plug Co. The various representations made by and on behalf of respondents doing business under the trade name the Dall Co. are likewise fal~e, misleading, grossly exaggerated and untrue. Respondents are not a department of, or connected with, nor do they in any way represent, Ball Brothers Co. of )Inncie, Ind., nor has said Ball Brothers Co. added any line of dinnerware to their glass jar manufacturing busi- CH...U.IPION BATTEtRY CO., ETC. 439 433 Complaint ness. Respondents' so-called sales promotional plan is not without cost to the dealers who purchase and use .the same in their business and the amount paid for such gift certificates by the dealers is not refunded by respondents on redemption of said certificates. Customers of dealers do not receive "free" sets of dinnerware, but on the contrary are required to remit the sum of 39 cents with each certificate returned to respondents, which sum of money represents and covers not only the value of the said dinnerware but a substantial profit on the same. The dealer is not furnished the promised number of ad- Yertising handbills, nor are handbills of the quality or design shown by agents. The dinnerware shipped to 'Customers by respondents is not genuine Fiesta ware as represented nor in colors as represented, but on the contrary consists only of the cheapest milk-white glassware found in 5 and 10 cent stores, and samples as well as premium lots of dinnerware are short of the numbers promised. Respondents' plan is not designed to facilitate the advertising of a new line of dinnerware nor to stimulate the sale of dinnerware through additional retail store channels, and the dinnerware sold by respondents is not manufactured by Ball Brothers Co.

PAR. 6. Respondents in the "further course and conduct of their business under the respective trade names Champion Battery Co. and the Ball Co., for the purpose of appropriating the business established by the reputation and good will of the Champion Spark Plug Co. and Ball Brothers Co., respectively, and also for the purpose of misleading and deceiving purchasers and prospective purchasers, place and have placed the word "Champion" upon the labels of their batteries sold by them trading as Champion Battery Co., and employ the word "Ball" in connection with sales made when trading as the Ball Co.~ respectiwly, thus representing or implying that such articles are manufactured by, or are .the products of, the Champion Spark Plug Co., or Ball Brothers Co., respectively. The Champion Spark Plug Co. is a corporation organized and doing business under and by virtue of the laws of the State of Ohio, with its factory and principal place of business located at 900 Upton Avenue, City of Toledo, in the State of Ohio. The Ball Brothers Co. is a corporation organized and doing business under and by virtue of the laws of the State of Indiana with its factory and principal place of business located in 1\Iuncie, Ind. The Champion Spark Plug Co. is now, and for many years last past has been, engaged in the manufacture of spark plugs to be used in automobiles and other mechanical apparatus and in the sale and distribution of said products in commerce between and among the various States of the United States and in the District of Columbia, causing said products, when sold, to be shipped from their place of business Complaint 34F. T. O.

in the State of Ohio to the purchasers thereof located in States of the United States other than the State of Ohio. Said products are sold under and are designated by the trade name "Champion." The Ball Brothers Co. is now, ~nd for many years last past has bren, £~ngaged in the manufacture of glass fruit preserving jars to be -used in canning vegetable:. and fruits, and in 1116 sale and distribution of said products in commerce between and among the various· States of the United States and in the District of Columbia, causing said - products, when sold. to be shipped from its place C•i business in the State of Indiana to the purchrtsers thereof located in the States of the United States other than the State of Indiana. Said glass fruit preserving jars are soh under r.nd are designated by the trade name "Ball." · Said companies have built up and enjoy a valuable good will in the words "Champion" and "Ball" as applied to their respective products, particularly spark plugs used in automobiles and other mechanical apparatus, and fruit jars which are used in canning vegetables and fruits. Members of the purchasing public have through long usage and over a long period of time identified electrical and other mechanical apparatus and accessories which1l bear the name "Champion" as the product of the well and favorably known Champion ~park Plug Co. and have manifested a preference for ~uch "Champion" products.

Likewise, members of the purchasing public have, through long usage and over a long period of time, identified fruit jars and other products which bear the name "Ball" as the products of the well and favorably known Ball Brothers Co. and have manifested a preference for such "llall" products.

PAR. 7. The use by respondents of the na11tcs "Champion" and '·Ball" as a part of their respective trade names hf'rein, without any accompanying words indicating that said trade names d'l not indicate the products of and busi11ess conducted by the said Champion Spark Plug Co. and the said Ball Brothers Co., respectively, constitutes in itself false and misleading representations by respondent'> that their products are the products of the Champion Spark Plug Co. and of the llall Brothers Co. In truth and in fact, respondents' articles of merchandise are not the products vf or made by Champion Spark Plug Co. or the Ball Brothers Co_., but are obtained by respondents :from other sonl'ces to the injury and damage to the good will v:which said companies have built up and have enjoyed for many years in the manufacture, .;;ale, and distribution of their respective products amor'g the purchasing public of the various States of the United Stutes an<l in the District of Columbia.

CHAMPION BATTERY GO., ETC. 441 433 Findings PAR. 8. The aforesaid acts, practices and method ..; used by the respondents place in the hands of retailers n. means and instrumentality Whereby the consuming and purchasing public is misled and deceived. PAn. 9. The use by the respondents of the methods, acts and practices hereinabove all~ged has had, and now has, the tendency and capacity to mislead and deceive retailers and to cause them erroneously to believe that all of said statements, claims and representations are true, and that said batteries and said dinnerware products are manufactured by Champion Spark Plug Co. and Ball Brothers Co., respectively, and to purchase said so-called sab; promotional plan, advertising gift checks, gift certifi.:!ates, and other articles of merchandise Used in putting said plan into operation and effect, thereby unfairly diverting trade in said conunerce to the rE-:;;pondents from their competitors to their injury and to the injury of the publb. PAR. 10. The aforesaid methods, acts, and practi0es of respondents are all to the prejudice of the public and of the respondents' competitors as hereinabove alleged. Said mfthods, acts, and practices constitute unfair methods of competition in commerce and unfair and deceptive acts and practices within the mtent and meaning of the l,'ederal 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 May 16, 1940, issued and subsequently served its complaint in this proceeding upon respondents D. J. Bortz, and Edith Dortz, individually, and trading as Cham~ pion Battery Co., and as the Ball Co., 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 thereto, testimony and ·other evidence in support of the allegations of said complaint were introduced by attorneys for the Commi:ssion and in opposition to the allegations of the complaint by an attorney for respondents before an examiner of the Commission theretofore duly designated by it, and said testimony RIHl other evidence were duly recorded and filed in the office of the Commission. Thereafter the proceeding regularly came on for final hearing before the Commission on, the said complaint, the answer thereto, testimony and other evidence, report of the trial examiner and exceptions t~ereto, and .brief in support of the complaint (re- E;pon<lent not havmg filed bnef and oral argument not havinrr been requested); and the Commission having duly considered the ~atter Findings 34 F. T. C. and. being now fully advised in the pr~mises, 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. Respondents, Donald J. Bortz (the individual referred to in the complaint as D. J. Bortz), and Edith Bortz, are individuals doing business as the Champion Battery Co. and, until recently, as the Ball Co. Respondents have their principal office and place of business at Room 403, Morgan Building, Detroit, Mich. The trade names used by respondents are registered in the name of Edith Bortz as owner and the business of respondents is carried on under the management and control of her husband, Donald J. Bortz'. Respondents are now, and for more than 2 years last past have been, engaged. in the sale anJ distribution of so•called sales promotional plans anJ, in connection therewith, the sale and distribution of certain certificates, advertising material, and various articles of merchandise.

PAn. 2. In the course and conduct of the aforesaid. business respondents have caused the said certificates, advertising material, and articles of merchandise, when sold, to be transported ft·om their place of business in the State of Michigan to purchaset'S in other States of the United States. Respondents maintain, and have maintained, a course of trade in the sale and distribution of the said articles used in connection with the operation of the so-called sales promotion plans in commerce among and between the various States of the United States and in the District of Columbia.

In the conduct of the aforesaid business under the trade names of Champion Battery Co. and the Ball Co. respond•mts are now, and have been, in substantial competition with other individuals and with corporations, partnerships, and firms likewise engaged in the sale and distribution in commerce of so-called sales promotional plans which, in principle, are substantially the same as those used by respondents.

PAn. 3. Respondents, tluough their agents and salesmen, solicit and sell their so-called sales promotional plans to retailLlealers located in various States of the United States.

The purported plan of operation under the name of the Ball Co. is to sell said sales promotional plan to retail dealers in the guise of n means of increasing the business of the purchasing dealer. It is provided that the plan will be sold in units of 200, the dealer agreeing to pay 20 cents for eac-h unit purchased, 5 cents of which is paid to CHAMPION BATTE:RY CO., E'TC. 443 433 Findings the rebponuents' rPprest>ntative at the time of sale and the remainder upon delivery of the material purchased and prior to any opportunity for inspection thereof. Each unit consists of a so-called gift eertt. fi cate; a cup, saucer, and cereal d'1s11 l1es1gna. t ecl as "'ivory ware " ; and,certain printed handbill;s and pennants or posters. The gift certificates are intended for distribution by the retail dealer to his customers. Each such certificate has numbers printed on its margin to the aO'rrreO"ate,..,.. "' of 500 ' which numbers are to be rmnched out by the d~aler in accordance with purchases made from him by the holder of the certificate, and when a total of $5 worth of merchandb.e has been purchased by the holder of the gift cer~ificate he is to receive from the dealer upon surrender of such certificate a cup, snucer, and cereal dish made of said ivory ware. The handbills and pennallts or Posters are intend('d for the use of the retail merchant in advertising the plan to his customers. It is providPcl that when the dealer sends the punched-out certificate to respondents, together with the name and address of the customer and 3\) cents for an additional unit of ivory ware, respondents will refund to the dealer 23 cents for each certificate so redeemed.

The purported selling plan followed by the respondents when trading under the name of Champion Battery Co. is similar in substance to that used by them in trading under the name of the Ball Co. The details of the plan vary, however, in that when purchases to the requisite amount have been made from the retail dealer and the certificate or "advertising gift check" is sent to respondents, tog()ther with the name of the customer and a remittance for a socalled trial order of dry batteries, a novelty' such as ~~ pencil which illuminates a small space around its point or an illumi.natecl. mirror is·sent to the customer and the 20 cents paid by the dealer for the certificate is refunded to him. The amount of the remittance to be ~ent to the respondents with the ce.:r:tificate varies with the novelty Hem selected, as indicated on the reverse of such certificate. For example, the purchase of 6 batteries at 10 cents each is required in case a pencil light is wanted, or 10 batteries at 10 cents each in case the "mirror lite" is wanted.

I>AR. 4. In the actual operation of respondents' business in the sale to retail merchants of the afore:;ail sales promotional pln.ns, respondents' sales repres<'ntatives have made many fal.;,;e and misleading representations to purchasers. Among suci1 representations Were 1>tatements that the Ball Co. was a department of, or connected With, or a represenhltiYe of, the well-kno)Yn llnll Brothers Co., hlanufacturers of mason jars; that the plan being offered was an Flndlngs 34F.T. C.

effort on the part of the Ball Brothers Co. to recoup lost salrs '"volume attributed to increased llse of tins and other containers for packing food products; that the plan was to introduce the new dinnerware made by the Ball Brothers Co. and it was anticipated that further business would result from. the distribution of same)les of the new merchandise; and that the retail dealer might becOJM the representative of Ball Brothers Co. in making future sales and receive substantial profits on such business. In some instances the fact that the dealer would not receive a refund unless acldition,al purchases were made by his customers \vas concealed from the pur· chasing dealer. The merchandise displayed to deall:'rs as being r;:amples of the ware t~, be furnished by respondents was materially different from that actually furnished and was of substantially bet· ter grade and more attractiwly colored and decorated than that actually furnished.

In 'the course of the business done by the respondents under the name of the Champion Battery Co. their sales representatives have represented themselves to be agents of, or that the Champion Battery Co. was connected with, the well-known Champion Spark Plug Co. of Toledo, Ohio; that the Champion Spark Plug Co. was commencing the manufacture of batteries and the sales plan offered was to facilitate the advertising of the new line; and that great profits could be made from future resales of batteries which would be pro· rooted by extensive advertising by the Champion Spark Plug Co. The fact that the dealers' customers would have to make purchases of batteries in order to secure the novelties included in the plan was concealed from dealers by misrepresentations or by failure to exhibit a true copy of the so-called advertising gift check, and the number of samples of the novelty merchandise to be furnished to the dealer for exhibition to his customers in connection with the operation of the plan was represented to be greater than the number actually furnished.

The batteries displayed as samples by respondents' representatives and those distributed by respondents were marked and designated as "Champion" batteries.

The advertising handbills furnished by respondents to dealers who coutracted for the sales promotion plan offered under the name of Champion Datter'y Co. represented that various items of novelty merchandis~ were available. to customers of the purchasing dealer "free." Actually the cost of such articles is included in the price of the batteries which must be purchased to obtain the so-calh~d free article of merchandise.

CHAMPION BATTE'RY CO., E'TC. 445 433 Findings Respondents' sales representatives, operating under the name of the Ball Co. and of the Champion Battery Co., frequently misrepresented the quantities of handbills and advertising pennants or posters which "Would be furnished to the purchasing dealer and displayed purported samples of such advertising material far superior in quality and appearance to that actually furnished by, respondents. Such sales representatives have represented that they are introducing a new lin" of merchandise and that the sales plan offered is for the purpose of aiding!!~ in brincrinn"1::> 1::> the new product to the •attention and knowledge of the public, and have made numerous other false representations in order to induce the purchase of respondents' so-called sales prornotional plans and accompanying n1erchandise. Respondent's contract forms, as well as their letterheads used in connection with business transacted as the Ball Co., ca,rry the heading "The Ball Company, Dinnerware Department." . Respondents are not in any way connected with Ball Brothers Co. of Muncie, Indiana, or with the Champion Spark Plug Co. of Toledo, Ohio. The dinnerware offered for sale, and sold by them is not made by Ball Bros. Co. ; nor are the batteries offered for sale, and sold by them made by the Champion Spark Plug Co.

The form of contract or agreement used by respondents in their sales to dealers, which form is to be signed by respondents' representative and by the purchasing dealer, provides that dealers have read its terms, that the order is not subject to change or cancellation and that "No terms or representatwns. except as printed herein will' be recognized by this company." Respondents, however, have accepted the benefits of orders which by handwritten chan()'es appearing thereon contain alterations of the printed terms and such"' . ' acceptance could not be without knowledge of the changes in the terms. They have in such instances, while collecting the full amount due under such orders, complied only in part with the altered terms thereof. · PAR. 5. The Ball Drotlters Co. of Muncie, Ind., for many years has been engaged in the manufacture of glass fruit jars to be used in canning vegetables, fruits, and other products, and in the sale and distribution of such jars throughout the United States. The Champion Spark Plug Co. for many years has been engaged in the manufacture of spark'plugs, for use in automobile motors and other internal combustion motors and has sold and distributed such products throughout the United States. Doth of these companies have spent Ia;ge sums of money in advertising th;ir products and obtaining a Wide consumer acceptance therefor and m otherwise establishing pub- 446 FEDERAL TRADE COMMISSION DECISIOXS Conclusion 3! F. T. C. lie good will for their products. Their products are '"ell and fnsor· ably known to the purchasing public and are known to be, and accepted as, excellent products of their respectiye l;:inds. :Many mel11· bers of the purchasing public, having knowledge of and confidence in the aforesaid companies and their products and in reliance upon the representations made to them concerning the identity with or connec· tion of the Ball Co. and the Champion Battery Co. with such col11· panies, have been misled and deceived into the purchase of respond· ents' so-called promoti~nal plans and accompanying merchandise · undt>r the false and erroneous belief that they we're dealing with or securing the products of Ball Bros. Co. or Champion Spark Plug Co. The Commi~sion concludes that the purpose of respondents in using the word "llall" ~s a part of their trade name, the Ball Co., i'n connection with the sale of glass and other dinnerware and in using the word "Champion" as a part of their trade name, Champion Bat· tery Co., in connection with the sale of electric batteries has been, and is, to mislead, confuse, and deceive their customers and the public into the belief that respondents are connected with Ball Bros. Co., widely k'11own manufacturer of glass jars, and with Champion Spark Plug Co., widely known manufacturers of spark plugs, and into the belief that the products offered for sale, and sold, by respondents are those of such widely known manufacturers; and, further, that these acts and practices have the capacity and tendency to create such erroneous beliefs in the minds of members of the purchasing public. PAR. 6. The use by the respondents of the fore.going methods, acts, and practices has hnd, and now f1as, the capacity and tendency to mislead and deceive, and has misled and deceived, retail dealers and has caused them, in reliance upon such false and misleading representations, to purchase respondents' so-called sales promotional· plan and accompanying merchandise, and has placed in the hands of dealers a means and instrumentality whereby the consuming public may be misled and deceivt>d, ond unfairly diverts trade in commerce to respondents from their competitors to their injury and to the injury of the public.

CONCLUSION The aforesaid methods, acts, and practices of respondents nre all to the prejudice of the public and of respondents' competitors and con· stitute unfair methods of competition in cOJmi1erce and unfair and deceptive nets and practices within the intent and meaning! of the Federal Trade Commission Act.

CHAMPION BATTERY CO., ETC. 447 433 Order ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondents, testimony and other evidence in support of the allegations of said complaint and in opposition thereto taken before an examiner of the Commission theretofore duly designated by it, report of the trial examiner and exceptions thereto, and brief filed in support of the complaint (no brief having been filed in• opposition and oral argument not having been requested), and the Commission having lllade its findings Rs to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered. That the respondents, Donald J. Bortz, and Edith B<'>rtz, individu~lly and trading as Champion Battery Co., or as the Ball Co., or under any other name, jointly or severally, their agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of any sales promotion plan, glassware, china, batteries, or other merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from directly or by implication:

1. Representing that respondents' business is in any way connected with, or that respondents represent, Ball Brothers Co., the Champion Spark Plug Co., or any other business with which respondents have no such connection or which respondents have no authority to represent.

2. Representing that merchandise offered for sale, or sold, in connection with, or separately from, a sales promotion plan is the product of, or manufactured by, any concern other than the actual prouucer or manufacturer.

3. Representing in any manner that respondents will furnish to purchasers of any sales promotion plan quantities of merchandise greater than the quantities actually furnished. 4. Hepresenting by the use of purported samples, or otherwise, that the merchandise offered for sale, or sold, by respondents is of a quality or value different from the actual quality5' or value thereof. 5. Representing that respondents are conducting' any advertising' . d 1:> bor other campaign to mtro uce or sell any article or articles 0 £ merchandise for or on behalf of any manufacturer or other concern when such campaign is not in fact being conducted at the instance of and on behalf of such manufacturer or other concern. 448 FEDERAL TRADE COMMISSION DECISIO~S Order 34F.T.C.

G. Representing, or supplying to others the mean~ of representing, that articles of merchandise, the cost of which is included in the purchase price of other merchandise in combination with which such articles are offered, are ''free," either by the use of the term stated or any other terll} or terms of similar import or meaning. 7. Representing that respondents will redeem gift certificates with· out further cost or obligation to the purchasing dealer or his customers, or upon a:uy other terms, or conditions different from the actual terms and conditions upon w4ich such certificates will be redeemed.

8. Using the word "Ball," the word "Champion," or any simula· tions thereof, as a part of any trade, or other name or names with· out clearly and unequivocally disclosing that respondents are not in any way connected with Ball Bros., Co., of Muncie, Ind., or the Champion Spark Plug Co., of Toledo, Ohio, respectively. It is further ordel-.er1A, That respondents shall, within 60 days after the 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. · KAS-MO REMEDY CO. 449 Complaint