20th Century Varieties, Inc.

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IN THE ~L-1 TTER 20TH: CENTURY VARIETIES, INC., ET .f~L.

CONSENT ORDER, ETC., IN REGARD TO TI-IE ALLEGED VIOLATION OF TI- FEDERAL TRADE COl\BnSSION A C'T Docket 8437. Complaint, June 1961-Decision, Sq)t, , 19()1 Consent order requiring a toy distributor in Bronx, N. , to cease such practices as selling toy handcuffs and goggles manufactured in Japan on cards stating Made in U. , etc., and concealing the marking " Japan " on the articles by the method of packaging; and to disclose clearly the foreign origin of other toys such ns plastic binoculars and whistles, which bore the names Hong Kong" and "Japan, but in very small, raised letters of the same color as the items so as to be almost completely indistinguish~!ble. CO::\IPLAINT Pursuant. to the. provisions of the Fecleral Trade. Commission ~\ct and by virtue of the authority vested in it by said Act, the Federal Trade. Commission having reason to believe. that 20th Century Varieties, Inc., a corporation, and Benjamin Rothberg nnd Samuel Lambert. inc1ivic1u::diy and as officers of said corporation, hereinafter referred to as resp~ndents, have vioInted the provisions of said.Ac.t nnd it appearing to the. Commission that a proceeding by it in respect thereof iyould be in the public. interest, hereby issues its comphjnt stating its charges in that respect as follo\\s :

PARAGR,\PH 1. Hesponclent. 20th Century Vnrieties: Inc. , is a Corporation organized, existing and doing business under' and by vi rille 20TH CENTURY VARIETIES , IKC. , ET AL. 569 568 Complaint the laws of the State of New York. Its principal office and place of business is located at 511 East 164th Street, Bronx, New York. Respondents Benjamin Rothberg and Samuel Lnmbert are individuals and are officers of said 20th Century Varieties, Inc. Said individual respondents formulate, direct and control the acts and prnetices of the said corporate respondent. Their address is the same as that of the aforenamecl corporate respondent. PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of toys to distributors and jobbers and to retailers for resale to the public.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have cnused, their said products when sold, to be shipped from their place of business in the State of New York to purchasers thereof located in various other states of the United States and in the District of Columbia, and maintain, and at course ofall times mentioned herein have maintained, a substantial trade in said products in commerce, as "commerce~' is defined in the Federal Trade Commission Act.

PAn. 4. In the course and conduct of their business, as aforesaid and for the purpose of inducing the sale of their said toys, respondents have made certain statements and representations with respect to the origin of said toys. Typical and illustrative of such statements and representations are the following:

",With respect to toy hanclcufi's the packaging reads: Frontier Marshall Western Set 20th Century Novelty Casting Co., Inc" N. The Deputy Starring Henry Fonda as l\larshall Simon Fry, 20th Century Made and Printed in U.

Said ha.ndcuffs are stapled to the card and the card is enclosed in a clear plasticlike wrapping which prevents the inspection of the handcuffs without destruction of the wrapping. On the lmderne.ath side of the handcuff's completely hidden from the view of the purchaser is the word "3 apan" which is imprinted in letters so small and faint as to be virtually unreadable.

'With respect to goggles, the card on which the goggles are mounted reads:

Jet Pilot 20th Cenhlry Novelty Casting Co" Inc., N,Y. Made in U. The word "3 apan" is imprinted on the reverse side of the goggles and can be read only by removing the goggles from the card to which they are attached.

vvith respect to other toys such as plastic binoculars and whistles the names indicating the origin of the product such as "I-long Kong or ".Japan" nre set. forth in very small, raised plnstic letters of the \ \ Complaint 59 F.

same color as the material from which the article is made. so as to be almost completely indistinguishable anc1unreaclable. PAR. 5. (1) Through the llse of the above quoted representations and others similar thereto but not. specifically set out herein, respondents have affirmatively represente,d that said products are manufactured in the United States.

(2) The. obscure, indistinct markings which purport to reveal the country of origin of said products, including those attached to various pieces of cardboard and packaged as hereinabove described as well as those which are not so packaged, are -n-holly and completely inadequate to give the public. notice of the country of origin of said products.

,Vhe.ll products of foreign origin are offered for sale to the public and arc not marked so as to give notice of their foreign origin, the public understands and believes that they are of domestic origin, P.:\R. G. Said statements nl1cl representations are false, misleading and deceptive. In truth and in fact:

(1) Said products are not mnnufaeture-e1 in the United States. Sa.id products are manufactured in . aran or I-Iong Kong 01' v~itions other foreign countries.

(2) Said markings are wholly nnd completely inacleql1ftte to advise or ftpprise purchasers of the fact tlwt said products are manuf:1ctured in Japan, lTong Kong or other foreign countries and not in the United States.

P.:i.n. 7. By the aforesaid acts and prnctices respondents place in the hands of ret-nilers and dealers the means and instrumentalities by and through which they may mislead the public ns to the country of origin of said products.

PAR. 8. A substantial portion of the purchasing public has n preference for articles of domestic manufacture or origin as distinguished from products of foreign origin, including the products sold and distributed by respondents.

PAn. 9. Ilesponc1ents in the course and conduct of their business are in substantial competition, in commerce, with corporations, firms and individuals engaged in the sale of products of the same kind and nature as those sold by respondents, PAn. 10. The use by respondents of the aforesaid false, rnisJeacEng and deceptive stfltements, representations and practices hns had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that. said statements and representations were and are true and into the purchase of substantial quantities of the respondents' products by reason of said .& 20TH CENTURY VARIETIES, INC., ET AL. 571 568 Decision erroneous and Inistaken belief. As a consequence thereof, substantial trade in commerce has been, and is being, unfairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done to competition in commerce. PAn. 11. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

l1Ii' . Tel' ul A. Jordan fo1' the 001runission. G-r'u.ber, Al aU'reT Grube?' by 1111'. I T.l)ing 1,1. G1'LtbeT New York , for respondents.

INITL\L DECISION BY ,VALTER R. JOHNSON, IIEARING EX.UIINEH In the complaint dated June 2. , 1961 , the respondents are charged with violating the provisions of the Federal Trade Commission Act. . On J nly 2~1, 1961, the respondents and their counsel entered into an agreement \\"ith counsel in support of the complaint for a consent order.

Under the fon'going agreement, the respondents admit the jurisdictional facts alleged in the complaint. The parties agree, among other things, that the cease and desist order there set fm:th mr:y be entered 'Tithout further notice and hate the same force and effect ns if entered after fL full hearing, and that the. complaint may be used to construe the terms of the order. The agreement includes a "aiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance there\with. The agreement further' recites that it is for settlement purposes only and does not constitute an admit~.;sion by the respondents that they have vio1nted the b\v as alleged in the complaint.

The hearing examiner finds that the content of the agreement meets a1l of the requirements of Section 3.25 (b) of the Ru)es of the Cornmif,sion.

The. hearing examiner being of the opinion that the agreement and the proposed order p:::ovide an appropriate basis for disposition of this proceeding fls to all of the parties, the agreement is hereby accepted and it is ordered that the agreement shall not become a part of the official record of the proceeding un)ess and until it becomes a part of the decision of the Commission. The following jurisdictional findings are made and the following order issued.

572 FEDERAL TRADE COlVL\nSSIO~ DECISIONS Decision 59 F.

1. R.respondent 20th Century Varieties, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of New Y 01'1\, with its office and principal place of business located at 511 East 164th Street, in the City of Bronx, State of New York. Respondents Benjamin Rothberg and Samuel Lambert are individuals and are officers Df said 2-0th Century Varieties, Inc. Said individual respondents formulate, direct and control the acts ~nd practices of the said corporate respondent. Their address is the same as that of said corporate respondent.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. ORDER It is ordel' That respondents, 20th Century Varieties, Inc. , a corporation, and its officers, and Benjamin Rothberg and Samuel Lambert, individually and as officers of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of toys or any other articles of merchandise, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. R.representing, directly or indirectly, in advertising or in labeling that products manufactured in .J apan or any other foreign country are manufactured in the .Uniteel States; 2. Offering for sale or selling products which are, in whole or in substantial part of foreign origin, without clearly and conspicuously disclosing on such products, and if the products are enclosed in a package or carton, on said package or carton, in such a manner that it will not be hidden or obliterated, the country of origin thereof. DECISION OF THE CO::\Ii\IISSION AND ORDER TO FILE REPORT OF CO)IPLL-\NCE Pursuant to Section 3. 21 of the Commission s Rules of Practice, pub- Jishec1l\1:ay 6, 1955, as amended, the initial decision of the hearing examiner shall, on the 21st day of September 19G1, become the deeision of the Commission: and accordingly:

It -is ordel'ed. That. respondents herein shall ,within sixty (60) clays after service. upon them of this order. file with the Commission a report in "Tihng setting forth in detail the manner and form in "which they have complied with the order to cease nnd desist.. , WINKELMAN BROS. APPAREL, INC. 573 Complaint