Devcon Corporation

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IN THE l\i.~TTER OF DEVCON CORPORATION ET AL.

?lIODIFIED ORDER, OPINION , ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO:i.\BIISSION ACT Docket 0-607. 00mp7nint, Oct. 1963-Decision, Feb, , 1968 Order modifying a consent order of October 11, 1963, 63 F. C. 1034, by allowing the respondent company to use the trade name '; Plastic Steel" P1' ov-ided, That its use in advertising or on labels has qualifying language that it .A. Steel-Filled Epoxy Resin" and will not withstand extreme heat nor conduct electricity.

Jb' F'l' ank P. D'Ltn. for the Commission. J1r. TV-illiam, TVap-field Ross, of lVald, Harkrader and Rockefel1e'i' ",Vashington, D. , for respondents.

CEHTIFICATION OF RECORD BY ",VILLIAl\I H::. .JACKSON, HEARING EXAl\IINEH l\IA Y 12 , 1967 Preliminary Statement This proceeding derives from a Consent Order issued by the Commission on October 11, 1963 (63 F. C. 1034J, requiring in pertinent part that respondents cease and desist from:

1. (a) Using the words "steel" or "aluminum" or any other word or words denominating metallic substances in brand names to designate, describe or refer to a product that consists principally of non-metallic ingredients: P1' 01)ided holre.rei' , That if a product contains a metallic substance in some form, the percen tage thereof may be sta ted.

On October 25, 1965, the Commission issued its order to show cause why the October 11 1963, cease and desist order should not be modified so that the thrust of the order provision is to the 111etallic properties of the products rather than to their metallic content and thus in pertinent part should read as follows:

1. (a) Using the words " steel" or "aluminum" or any other word or words denolllillating metallic substances in brand names to designate, describe or refer to a product which, after application, does not have the same pllysical and chemical properties of metal and of any particular metal represented: Provided, holl:ez)er That nothing herein contained shall prohibit truthful representations in aclyertising and labeling of the percentage of content of any metallic snbstances in such products.

, DEVCON CORP. ET AL. 273 'r")'oJ Certiftca tion of Record Thereafter on February 21 , 1966, respondents filed their answer requesting a full evidentiary hearing on the issues raised by the Commission s order to show cause, and on April 7, 1966, the Commission issued an order directing hearings "* :;: for the purpose of receiving evidence in support of and in opposition to the question whether the public interest requires that the Commission s order to cease and desist of October 11, 1963, be altered, modified, or set aside in accordance with the Commission s order to shmv cause dated October 25, 1965. It was further ordered that the hearing examiner :;: upon conc1 usion of the hearings, certify the record together with his recol11l11endation to the Commission for final disposition of this matter. Evidentiary hearings were conducted in accordance with Part 3 Subparts C, D, E, and F of the Commission s Rules of Practice as specified in the Commission s Order DireetingHearings dated April 7 1966, and the record has been closed by the hearing examiner. At the close of the hearings, the hearing examiner permitted the parties to file proposed findings of fact, conclusions, and proposals, if any, for modification of the order, which would be made a part of the record in this proceeding and certified to the Commission with the transcript of proceedings and exhibits received in evidence. Summary of the Proceedings The record in this proceeding consists of 867 pages of testimony, one (1) exhibit for the Commission (CX-IA through lL) and twentyfour (24) exhibits for respondents (RX- RX-24 inclusive). Counsel for the Commission called one witness:

Dr. Robert D. Stiehler (Tr. 59-64) : formerly Chief of the Polymer Evaluation Section and since 1964 Chief of the Evaluation Criteria Section, National Bureau of Standards, recipient of Ph. D. degree in chemistry from Johns Hopkins University in 1933, author of numerous publications in technical and scientific journals dealing with original research on the development of methods for the evaluation of materials or the physical properties of materials, and a member of numerous scientific societies including the American Society for Testing i)1aterials. Respondents stipubted that the witness "is certainly well qualified as an expert in this general area " (Tr. 63-64). Dr. Stiehler conducted laboratory tests of responde.nts' products, the results of which are included in the record as CX-l..A- through CX-IL. Respondents called five ,ritnesses whose backgrounds and qualifications are as follows:

, 274 FEDER ~L TRADE COMMISSION DECISIONS Certifica tion of Record i3 F. 1. 1111.. Constant Sakalcinl (Tr, 178-180) : a marine engineer employed at the Norfolk Naval Shipyard, Design Division, Portslllouth, Virginia, for m-er 30 years. A graduate of ~laury High School he served an apprenticeship as a blacksmith at the Norfolk Naval Shipyard fron11935 to 1938, transferred in 1938 to the Design Division and proceeded through the steps of drafting to marine engineer in 1941. He attended night school at VPI and the University of Virginia. Extension taking courses in engineering, mathematics, metallurgy, engineering design and diesel engines. In 1949 he was qualified by the Ciyil Ser.dce Commission as a master forger in the smith shop of the shipyard. His present duties are concerned with the installation, testing and operation of main propulsion and auxiliary machinery in Naval yessels and in the integral design features of internal combustion engines and their repair.

A11.. Trade!' Fi8clzm. .(lT/, (Tr. 246-26:2) : for the past six months one of the principals and editorial director of Projects Publications, a specialty publication house putting out a line of program teaching courses and technical magazines; for a little over a year prior to that editorial director of Popular ~Iechanics magazine; and for fourteen years before that, a free-lance writer specializing in articles on do-ityourself material, building, fixing, repairing, lllodeling, remodeling, 110usekeeping, crafts and hobbies. As a free-lance writer his articles. appeared in such consumer magazines as Good I-Iousekeeping, American I-Iome, House and Garden, Better Homes and Gardens, Colliers SaturchlY Evening Post, True, and Argosy. He is also the author fiye books dealing ",with these subjects and has acted as a consultant to such companies as U.S. Plywood, Du Pont, Reynolds Aluminum. and BOl'dens on the subject of consumer merchandising and marketing products. He has appeared on numerous radio and tele.dsion shows as an expert in the do-it-yourself and home repair fields, and for years wrote a newspaper column entitled You Can Do It" appearing in the Kew York Daily Kews on Sundays. During this period he used a procedure ,yhieh came to be knowl.l as "in-use testing of the products he ",yrote about: that is, he distributed such products to homeowners, ci'aftsmen, hobbyists, etc. , who were on the staff of the New York Daily X ews or the ,-arious magazines for which he ""rote. to be used and eya un ted by them, I-Ie has attended trade shows, the National A~sociation of I-Iome Builders sho",Y ~ hOllSeWal'e sho""s, and followel1 closely the home repair product field and was on the mailing list seyera 1 thousand companies manufacturing various home repair and do-it-yourself products. On cross-examination, it was brought out he does not hold a college or university degree and had conducted no DEVCON COF.P. ET AL. 275 272 Certification of Record laboratory tests of Devcon ~s Plastic Steel, Liquid I\..luminum or Devcon Steel (Tr. 255).

3. Dr' . Paul Br' llins (Tr. 323-327) : presently a Professor of Chemical Engineering, Polytechnic Institute of Brooklyn, received a Ph. D. in chemical engineering from Iowa State University, Ames, Iowa, in 1930', taught chemical engineering from 1926 to 1930 at Iowa State from 1930 to 1935 I,"as employed in private industry as a chemical engineer and since 193~5 has been on the staff of Polytechnic Institute Brooklyn. He has special.1ized in the field of materials; teaching plastics chemistry of epoxy resins and metallurgy. His ,vritings appear in about 25 technical publications, and he has ,written a book entitled Plasticizer Technology"~ 1-Ie does consulting ,vork for numerous corporations in the field of materials and considers himself an expert in the field of "thermoset plastics,~' He is also familiar with epoxy resins and filled epoxy resins including metal-filled epoxies~ but has done no research on metal-filled epoxy resins. 1-lis familiarity with metal-filled epoxy resins is based on seeing them used in industry, reading in the field and teaching. His familiarity with epoxy resins commenced in 19::53 when they first. came on the market. Since that time he has been studying the literature produced by epoxy resin 11lanufacturers, ,,"working with epoxy resins in the laboratory and serving as a consultant for several companies. His familiarity with metals is based in large part on his industrial experience, both full time and as a consultant. On cross-examina tion, Dr. Bruins stated)\(' had never conducted any laboratory tests of Del-con s Plastic Steel, Liquid Aluminum or Devcon Steel (Tr. 327).

4. ill7'. Albert j.l1. Creighton. !lr. (Tr. 400, 406-410) : president of Devcon Corporation and one of the respondents herein. A 1941 graduate of Harvard University, he spent his summers during college going through various factories, textile mills, chemical plants, etc. During ,YorIel ,Yar II he worked for the Office. of Production :Management near Production Board) for three years sen-ing for a time in the Boston office as manager of the Plastic and R.l1uber Section, anc11after served in the Office of Strategic Services in China advising' on various factories in Xorth China and 3Ianchuria which might be important for strategic bombing. I-Ie also took night courses while he was with the ,Yar Production Roarc1 at. ~Inssnc1l11setts Institnt.e of Technology on polynlel' chemistry and colloids. 1-Ie is the inve.ntor of plastic steel and did much of the basic laboratory ,,"ork in its development. 5. JIJ'. Rooe-rt B. Ru8seu (Tr. 449-454) : a patent and trademark attorney and a senior partner in the firm of Russell Chittick and Pfund, Boston, illassachusetts. He graduated from 1-Iarvard with an , , , 276 FEDERAL TRADE CO:MMISSIO~ DECISIONS Certification of Record 73 F. B. degree in 1941 and I-Ian-ard Law School in 1948 and has lectured at Harvard Business School, Suffolk Law Schoo, and while it existed at Northeastern Law School. From 1948- 1952 he served on the. staff ~lit in the Division of Industrial Cooperation dealing with metallurgy, steel fabrication, steel alloying for the preparation of gas turbine rotor blades, etc. In his patent law practice he has gained an intimate knowledge of steel fabric.ation in steel mills of the plastics industry particularly from Devcon or sprayed steel in connection with work for the D. S. Kennedy Company, a manufacturer of radio antennas of powdered steel for Perryman Company, and of molds n1ade of filled epoxy resins. He is an inventor holding patents in the fields engine starting and thermographic. copying and has published an article on trademarks.

Recommenda tion In accordance with the Commission s Order Directing Hearings dated April 7 , 1966, and pursuant to Part 3, Subpart H, Section 28 (b) (3) of the Rules of Practice, the headng examiner makes the following reeommendation :

That the Commission s Order of October 11 1963 L63 F. C. 10:3-1J, in the instant matter be altered to clarify the intent, meaning and purpose of Paragraph 1 (a), and be modified to set aside Paragraph 1 (b) thereof, and as so altered and modified, read : It is o1Ylered That respondent Devcon Corporation a corporation . and its officers, and Albert lvi. Creighton Jr., and E. Leslie Hall. 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 "Plastic Steel Devcon Steel." "Devcon Liquid Aluminum " "Devcon '2 Ton' The Epoxy ' Super Glue' " or any other products in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. (a) Using the words " steel" or "aluminum" or any other word or worels denominating metallic substances in brand narnes designate, describe or refer to a product which, after application does not have the same physical and chemical properties of Tnptill and of any particular metal representeel Plo1-'ided, hO1.()e1)e1' That nothing herein contained shall prohibit truthful representations 1 Respondents. in their brief at pages 1- do not contest the applicability of the proposed order to two of the three products herein involved: 'Devcou Steel' and 'Devcon Liquid .Aluminum . In addition, they state at page 2 of their brief "that the only product now in issue in this proceeding is 'Plastic Steel' " ) . ) : : DEVCON CORP. ET AL. 277 I... Certification of Record in advertising and labeling of the pe.rcentage of content of any metallic substances in such products.

2. Representing, directly or by implication, that: (a) The product designated "Plastic Steel" or any other product of similar composition or characteristics forms a hardened metal or a substance that has the effectiveness or intrinsic characteristics of a hardenedl11etal or of steel or that is not adversely affected by heat or chemicals; (b) The products designated aDevcon Steer' and "Devcon Liquid Aluminum': or any other product of similar composition or characteristics are liquid metals or that when used they form hardened metals or substances that have the effecti veness or intrinsic characteristics or hardened metals; (c) One drop of the product designated "Devcon '2 Ton The Epoxy ' Super Glue' " has an adhesive strength of 2 tons or an adhesive strength in any amount in excess or the true facts.

3. Misrepresenting in any manner the nature, composition, effectiveness or characteristics or their products. 4. Furnishing 01' otherwise placing in the hands of others means and instrumentalities by and through which they may mislead the public as to any of the matters and things herein prohibited. It 18 further on7ered That the respondents herein shall within sixty (GO) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and rorm in ",hleh they have complied with this order.

Reasons for TIecommendation 1. The public inte.rest requires that the Commission s Order of October 11. 1963, be altered andmodifiec1.

2. "Plastic Steel Devcon Liquid Aluminum.:: and "Devcon Steel" do not after application have the same physical 'and chemical properties of rnetal or of the particular metal represented. 3. The use or the. brand or trade names "Plastic Steel Devcon Liquid ..:\.luminum :' and " Devcon Steel " by respondents has the capacity ,uJ.d te~lc1ency to misle.ad and deceive consumers into the belief tlwt snell products after application have the same physical and chemical properties of metal or of the particular represE'ntedmetal. 4. The capacity and tendency of such trade names to deceive ('011- ~umeJ'8 cannot be adequately cured b~' an~' remedy other than excision. 278 FEDERAL TRADE COl\IMISSION DECISIONS Opinion 73 F.

The qualifying language or affirmative disclosures proposed by respondents are limited in scope, incomplete and would not suffice to render harmless otherwise deceptive trade names. Enumeration all the significant differences in the physical and chelnical properties of Plastic Steel" and "Steel" cannot be 11leaningfully achieved by a few qualifying words and any such remedy would not be feasible in this ease.

5. The trade names "Plastic Steel Devcon Liquid Aluminum and "Devcon Steel," have not ac uired a secondarv meanino' Certification The re.corcl consisting of 867 pa.ges of testimony, exhibits CX-l....\. through CX-IL for the Commission, RX-l through RX-24 for the respondents, together with the briefs, proposed findings and conclusions submitted by the parties are hereby certified to the Commission. OPINION OF THE CO?lfl\IISSION By EL)IAN 0 O1runissione?' The question before the Commission is whether a consent order issued on October 11, 1963 (63 F. C. 1034:J, is inadequilte to protect consumers against deception and should be modified in the public interest.

The consent order, in pertinent part, requires respondents to cease and desist from:

Using the words " steel" or "aluminum" or any other ,,'ord or words denominating metallic substances in brand names to designate, describe or refer to a product that consists principally of non-metallic ingredients: Provide(l, however That if a product contains a metallic substance in some form, the percentage thereof may be stated.

On October 2;3, 1965, the Commission issued an order directing respondents to show cause Ifhy this provision should not be modified to read as follows:

Using the words "steel" or "aluminum" or any other word or words c1enolllinatiug metallic substances in brand names to de:::ignate, describe or refer to a product which, after application, does not llave th-8 same physical and chemical properties of llletal and of any particular llletalrepresented l'o' videcZ, holccver That nothing herein contained shall prohibit truthful representations in advertising and labeling of the percentage of content of any metallic substances in sucll products.

On April 7, 1966, the Commission referred this matter to a hearjng examiner to receive evidence on the question whether the public interest requires mocEfication of the consent order. The record has now been )) ,. , , :::; . :, , , DEVCON CORP. ET AL. 279 272 Opinion certified by the hearing examiner to the COlmnission, together with his recommendation that the consent order be modified. It is clear, as the examiner has found, that respondents' products Plastic Steel " "Devcon Liquid Aluminum " and "Devcon Steel not, after application, have the same physical and chemical properties as these metals. Nor do respondents have any quarrel with the examiner s recommendation for excision of the trade names of the latter two prodnets Devcon Liquid Aluminum" and "Devcon Steel," both of which are single-stage filled vinyl products. The controversy, in its present posture, has been narrowed to the single question whether respondents should be required to excise the trr.cle name of "Plastic Steel " 'ivhich is a two-stage filled epox? product. The issue before us is, thus, one or determining the proper remedy. In dealing 'ivithsuch a question, the public interest comes first. ",Yhatev-er private loss may be, suffered through excision of a trade name paramount consideration must be given to the need for nroteetin.Q'consumers against deception. ,Yhile excision should not be .lordered if a less drastic remedy ,,-ill accomplish the same result, it cannot be voided where "a clear and unarnbiguous false representation (is implicit in the product' s name, and, beca.use of this, the addition of a qualifying phrase denying the truth of that representation would lead to a confusing contradiction in terms Continental '1'1 .1.7? 196 See' .~ I. . 00 , 0 -:t:i!- -:t:l lJ- . :t o Royal JJi7lz:ng Co. 288 U. S. 21:? , 217 (1933) ; Country Tloeeds, Inc. 326 F. 2d144, 148 (2d Cir. 1064).

There is no substantial dispute as to the perrormance characteristics of "Plastic. Steel." As its name suggests, the product contains both plastic and steel. To be precise., it is a steel-filled epoxy resin containing 20 percent epoxy resin and 80 percent powdered steel by weight. :Metal-filled epoxy resins like "Plastic Steel" were developed following vVorld ",Var II. "Plastic Steel" was the first such product to go on the market, and respondents assert that it is probably the world' largest selling steel-filled epoxy.

Since 1953 Plastic. Steel hrls been sold in large volume to industrial users and do-it-yourselfers for llse in bonding, sealing, and filling rigid materials, including metflls~ wood, plastics, and glass. According to the testimony of respnndents~ experts, which is substantially uncontradic.tecl Plastic Steer' does in fact possess, on application, those characteristics or steel ,which are important and significant to consumers in the uses for yrhich the product is recommended and sold, Upon application, it has tensile or breaking strength of 2500 to 3000 pounds pel' Sq1Ull' C inch. Unlike steel, ho'ivever , , , .

.opinion 73 F.

Plastic Steer' does not conduct electricity and cannot withstand the heat of a direct flame.

Plastic Steer' has unquestionably found widespread consumer acceptance. The Navy Department, ",yhic.h has evaluated " Plastic Steel" ill laboratory and use tests, has approved it for use in the construction of naval vessels. The Department also uses it in a great variety metal-to-metal repair applications, including the repair of highspeed cam shafts in diesel engines. In some of its applications Plastic Steel" is superior to a metal weld and can be used where welding would be impossible. Approximately one-half of respondents' sales of Plastic Steer' are to the United States Government and industrial users.

,Ye readily agree ""ith the hearing examiner that the term "Plastic Steel ,:~ standing alone., could confuse or mislead some consumers especially those not knowledgeable in matters of chemistry, engineering, and the like. A housewife shopping in a hardware store may be misled where an expert technician would not; and it is for her protection, no less than his, that "truth-in-labeling~' must be strictly enforced. Conceivably, the trade name "Plastic Steel" might mislead some people into believing that the product consists entirely of steel which has somehow been reduced to plastic form. In other words, such people-if there be any-would read "Plastic" as an adjective, qualifying "Steer'-and not, as is the ease, that the product is a mixture or pI astic. (epoxy resin) and steel.

,Ve think the proper, and a sufficient, remedy for any possible deception arising out of the trade name "Plastic Steep' is for respondents to make clear, both on labels and in advertising, exactly what their product is and does. Respondents hate oflered to make whatever disclosures the Commission believes to be necessary as a safeg' uard against L-confusion or deception of the c.onsuming public. At the oral argument. before us, respondents agreed to use: in the same or larger size type and jn dose proximity there.with, the. "ords A Steel-Filled Epoxy, Hesin." ""here vel' and whenever thev0.' use the trade name "Plastic Steel" They also agreed that the labeling or their product should plainly disclose its limitations, i. , that it does not conduct electricity and cannot ",vithstand a direct flame or prolonged heat in excess of 3000 F. In view of these stipulations: as well as the other unique circumstances of this case, the Commission does not believe that the public interest requires excision of a long-established.d trade name for "hat appears to be a useful and inexpensive household product. DEVCON CORP. ET AL. 281 272 Findings The attached final order embodies the vimvs set forth in this opinion. Commissione.r Nicholson did not participate for the reason that oral argument was heard prior to his taking the oath of office. FINDINGS OF FACT, CONCLUSIONS, AND FINAL ORDER The Commission having reopened this proceeding and having issued its order of October 25 , 1965, to show cause why the consent order issued on October 11 , 1963 (63 F. C. 1034), should not be modified, and The hearing examiner pursuant to Commission direction having conducted hearings and having certified the record of said hearings to the Commission too'either with his recommendation that the consent order of October 11 1963, be modified, and The Commission having determined, for the reasons stated in the accompanying opinion, that the public interest requires modification of the consent order of October 11 , 1963, in the respects described in the opinion, now enters its Findings of Fact, Conclusions, and Final Order.

FINDINGS OF FACT AND CONCLUSIONS 1. "Plastic Steel Devcon Liquid Aluminum," and "Devcon Steel" do not, after application, have the same physical and chemical properties of metal or of the particular metal represented. 2. There has been no showing that "Devcon Rubber'~ does not possess the essential characteristics of rubber. 3. Respondents have agreed to the entry of an order requiring discontinuance of their trade names "Devcon Liquid Aluminum" and Devcon Steel."

4. Use of the trade name "PlastJic Steel " standing alone, to describe respondents' steel- filled epoxy product may have the capacity and tendency to deceive. Any such reception, however, may be remedied by the use, in the same or larger size type and in close proximity therewith, of ,the words "A Steel-Filled Epoxy Resin " wherever and whenever the trade. nallle "Plastic Steel" appears in respondents' labeling or advertising, together with a disclosure of the product' s limitations in comparison to steel.

5. The public interest requires modification of the consent order of October 11, 1963 (63 F. C. 1034), in accordance with the above findings of fact.

418-345--7~---- Final Order 73 F, T.

FIN AL Onder It i.s orde-red That respondent Devcon Corporation, a corporation and its officers, and Albert ~1. Creighton, Jr., and E. Leslie Hall, 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 "Plastic Steel Devcon Steel Devcon Liquid Aluminum Devcon '2 Ton' The Epoxy ' Super Glue ' " or any other products in commerce as "coIllll1erce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Using the words "steel" or "aluminum" or any other word or "ords denominating metallic substances in brand names to designate, describe or refer to a product which, after application, does not have the sa.me physical and chemical properties of metal and of any particular metal represented: Pro,v'hled horu;eve' That nothing herein contained shall prohibit truthful representations in advertising and labeling of the percentage of content of any metallic substances in such products: And 7)1' vided, f1.l.J'thel' That respondents' continued use in advertising and labeling of their trademark "Plastic Steel" to designate their steel-filled epoxy resin product shall not he deemed a. violation of the requirements of this paragraph so long as the qualifying language. "A Steel-Filled Epoxy Resin/' and "will not conduct electrieity or withstand a direct flame or prolonged heat in excess of 3000 F." appears clearly and conspicuously in conjunction there,,'ith.

2. Representing, directly or by inlplication, that (a) The product designated "Plastic Steel" or any other product of similar composition or characteristics forms a hardened metal or a substance that has the effectiveness or intrinsic characteristics of a hardened metal or of steel or that is not adversely affected by heat or ehemicals; (b) The products designated "Devcon Steel" and "Deveon Liquid Aluminum" or a.ny other product of similar composition or characteristics are liquid metals or that when used they form hardened metals or substances that have the effectiveness or intrinsic characteristics of hardened metals; ( c) One drop of the product designated "Devcon '2 Ton The Epoxy ' Super Glue' " has an adhesive strength of 2 tons or an adhesive strength in any amount in excess of the true facts.

DEDHAM MILLS, INC. 283 272 Complaint 3. J\1isrepresenting in any manner the nature, composition, effectiveness or characteristics of their products. 4. Furnishing or otherwise placing, in the hands of others means and instrumentalities by and through which they may mislead the public as to any of the matters and things herein prohibited.

It 1-'8 fllPthel' 0-rde1' That the respondents herein shall, within sixty (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. Commissioner Nicholson not participating for the reason that oral argument was heard prior to his taking the oath of office.