Foto Murals of California, Inc., et al.

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IN THE ~'latter OF FOTO 1vIURALS OF CALIFORNIA, INC., ET AL.

ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 67"08. Complaint, Jan. 1957-Dedsion, Dec. , 1957 Order dismissing, for failure to sustain the allegations, complaint charging that use in advertising of the terms "photo mural" Foto Mural" , etc., by a Beverly Hills, Calif. , dealer, for photogravure reproductions of photographs designed as ,,' all decorations or coverings, constituted false advertising. 1111". Edward F. Downs and 1111'. Garland S. Ferguson for the CommlSSlOTl.

Adelman Schwartz of Beverly Hills, CflJif. , for respondents. INITIAL DECISION DISMISSING CO1'vIPLAINT BY EARL J. KOLB , HEARING EXA MINER This proceeding is before the undersigned hearing examiner for finfLl consideration, upon the complaint, answer thereto, testimony and other evidence, and proposed findings as to the facts and conclusions presented by counsel. The hearing examiner has given consideration to the proposed findings of fact and conclusions submitted by both parties, and all findings of fact and conclusions of law proposed by the pnTties respectively, not hereinafter specifically found or concluded, are herewith rejected, and the hearing examiner having considered the record herein and being now fully advised in the premises makes the following findings as to the facts and conclusions drawn therefrom and order:

1. Respondent Foto 11urals of California, Inc. , is a California corporation located at 8401 'Yilshire Boulevard, Beverly Hills, Calif. It is engaged in the sale and distribution in interstate commerce of reproductions of photographs designed to sell as wall decorations or wall coverings. These products are referred to as "Photo ::\lurnls Foto l\j u1'l11s " Hnd ".:\Jm' fi1ettes.

2. In the production 01' its murals the corporate respondent causes an original eo)or transparency to be made of 11 scene to be reproduced on a mura1. This transparency is subject;('d to further photographic processing' to obtain four eo10r separntioll negatives which nre llsed to make printing plates 01' specified color for transfer to respondent's Opinion 54 F.

specialized paper by means of the photogravure process. This photogravure processing is performed by independent printing concerns under contracts with respondent.

3. The complaint in this proceeding alleges that the use of the tenll Foto ~Jurals " in respondent's trade name, and the use of the terms Photo ~,furals" and "Foto 1vfurals " to designate or describe respondent' s products, constitute false, deceptive, and misleading representations in violation of the Federal Trade Commission Act because respondent' s products are not enlarged phot.ogl'aphs on photographic paper. This allegation is not supported by the testimony and other evidence in this proceeding. Respondent's murals are reproductions of original color transparencies printed by the photogravure process from plates prepared by photographic methods and can properly be referred to as "photo murals. The record herein does not demonstrate any public interest in limiting the term Uphoto murals " to an enlargement on sensitized paper.

4. The complaint also alleges that representations that respondent manufactures its products are false and misleading in that a substantial portion of the purchasing public have a preference for dealing direct with a factory and manufacturer of merchandise. No evidence was introduced as to any public preference for dealing direct with the printing concern printing the products as opposed to a concern which designed find caused the products to be produced according to its specifications. In the absence of such testimony as to preference this charge has not been sustained.

5. The further allegation of the complaint that. respondent has falsely represented that the price of custom photographic murals is two to twenty times the price of responden t's products, is wholly unsupported by the record in this proc.eeding. 6. On the basis of the present record, it appears that there has been a total failure to sustain the allegations of the complaint. It is therefore ordered That the complaint in this proceeding be, and the same is hereby, dismissed.

OPINION OF THE COl\BHSSION By Secrest, Commissioner:

This matter is before the Commission upon the uppeal of counsel supporting the complaint from the initial decision of the hearing examiner dismissing the complaint for failure of the evidence to sustain the allegations. The eompluin t charges respondents with violating the Federal Trade Commission Act. through the use in advertising of false, misleading, and deceptive statements ancl repn' sentations in FOTO MURALS OF CALIFORNIA, INC. , ET AL. 671 669 Opinion connection with the sale of reproductions of photographs designed to sell as wall decorations or ,vall coverings. The basis of the appeal is the dismissal of the complaint with respect to the charge that respondents, through the use of the terms "photo mural photographic mmal" and "Foto 1\,Jural " to describe or refer to their products, have misrepresented the true nature of such products. Specifically, this charge is that respondents, by the use of these terms, have represented that their products are actual enlarged photographs on photographic paper \vhen they allegedly are not such but are prints or mechanical reproductions of photographs, printed or lithogl'flphe.d from metal or gelatin plates on ordinary paper. Counsel in their appeal contend that the record contains substantial evidence to s1.1stain the cOlnplaint in this particular. The actual process employed in the making of respondents' products is explained in the ini tial decision as follows: In the production of its murals the corporate responde.nt causes an origillid color transparency to be made of a scene to be reproduced on a mural. This tnmsparency is subjected to further photographic processing to obtain four color separation negatives which are used to make printing plates of specified color for transfer to respondent' specialized paper by merms of the. photogravure process. There is no showing in this record that the purchasing public undcrstnnds the terms "photo HlUral photographic 111m'a)" or Foto ::\lmn)" to he so limited in meaning fls to exclude murals made by the above-described process. Such evidence as there is on this point is all to the contrary. "\Villiam C. 1\,Jayfield, engaged in business ns teehnica.1 consultant for users 01' photographic arts, testified to the eJi'eet. that, based on his se.lling contacts with people, it is the end result that counts with the buying public, not the process. He testified in part:

'VYhen people go out to buy these things, I think they buy primarily from what they see. They buy the beauty of the thing. They buy from the standpoint of whether it will fit their budget; they do not consider the processes Its such; to them, one process is the same as the other.

Considering the re.eord as fL whole, we do not think thn1. tile eyidence warrants fi finding that respondents have engaged in misrepresentation or deception by use of the terms "photo mural photographic mural" and "Foto ),ll1ral."

Counsel appealing also contend that the hearing examiner erred in Jlot receiving as evidence a, stipulation which one of the individual respondents, Peter C. Goldsmith, had entered into with the Commis- , Order 54 F.

sion and which allegedly dealt with issues here involved. The examiner did not flatly reject the offer of evide.nce but ruled that in the then present state of the record, he was unable to determine the admissibility of the document. He suggested that it be withdrawn to be offered later after the introduction of additional testimony, so that the circumstances could then be determined. The document was never again offered. It does not appear at all unreasonable for the examiner to have so deferred his ruling on such an offer. Under the circumstances, we cannot find that he. committed error in this matter.

The appeal of counsel supporting the complaint is denied and the initial decision of the hearing examiner dismissing the comply,int is affirmed.

FINAL Order.

Counsel supporting the complaint having appealed from the hearing examiner s initial decision dismissing the complaint in this pl'oeeecling; and the matter having been heard upon the record, including the briefs of counsel, and the Commission having rendered its deeision denying the appeal and affirming the initial decision: It is ordered That the order eontninecI in the initial decision dismissing the complaint be, and it hereby is, affirmed. , ,, HENRY BROCH & CO. 673 Decision