Masland Duraleather Co. v. Federal Trade Commission, 4085.

• Decision Date: 18 September 1929
• Docket Number: No. 4085.,4085.
• Parties: MASLAND DURALEATHER CO. et al. v. FEDERAL TRADE COMMISSION.
• Court: U.S. Court of Appeals — Third Circuit

34 F.2d 733 (1929)

MASLAND DURALEATHER CO. et al. v. FEDERAL TRADE COMMISSION.

No. 4085.

Circuit Court of Appeals, Third Circuit.

September 18, 1929.

Robert T. McCracken and C. Russell Phillips, both of Philadelphia, Pa., for petitioners.

Robert E. Healy, Edward J. Hornibrook, and Adrien F. Busick, all of Washington, D. C., for respondent.

Before WOOLLEY and DAVIS, Circuit Judges, and RELLSTAB, District Judge.

RELLSTAB, District Judge.

The Masland Duraleather Company, a Pennsylvania corporation, and W. & J. Sloane, a New Jersey corporation, jointly petition this court to review and set aside an order made by the Federal Trade Commission, commanding them to cease and desist from using the term "Duraleather" as a trade-name on imitation leather, on their stationery, in their advertisements of the product, and "from using the word leather or any other word or combination of words in such manner as to import or imply that such products are real leather."

The respondent hereafter will be called Commission, and the petitioners, when separately referred to, will be termed Masland Company and Sloane, respectively.

The Commission, in that part of its answer which is in the nature of a cross-bill, prays for a decree affirming this order and requiring petitioners to conform thereto.

The challenged order is the result of proceedings instituted by the Commission, pursuant to the act of September 26, 1914, 38 Stat. 717 (15 USCA §§ 41-51), entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," in which it was charged that petitioners were using unfair methods of competition in interstate commerce in violation of the provisions of section 5 of that act (15 USCA § 45).

The decried business methods and their alleged consequences are set out in two counts. Both deal with petitioners' use of an alleged false and misleading trade-name in marking, advertising, and marketing their artificial leather product, and the results thereof. The first relates to competition in the pertinent trade generally, while the second is confined to a particularly named alleged competitor.

The Commissioner's findings underlying this order, pertinent or necessary to be understood on this review, somewhat abbreviated, are:

That the Masland Company is "engaged in the manufacture of a product which it calls `Duraleather,' an imitation or artificial leather"; that Sloane is engaged in selling and distributing this product "to manufacturers of automobiles, automobile bodies, trunks, suitcases, satchels, upholstered articles and other similar products, who manufacture many of said products in whole or in part of said imitation or artificial leather"; that petitioners compete with others making "leather and imitation or artificial leather," who sell the same throughout the United States; that petitioners' product contains no leather, but is painted and embossed with a grain closely resembling genuine leather; that the manufacture of this imitation leather was begun in 1914 by Walter E. Masland, individually, who designated it as "Duraleather"; that since its incorporation (1919) the Masland Company continued this manufacture and designation; that prior to 1924 Masland Company branded its imitation leather with the word "Duraleather" and so advertised it without explanation that it was artificial and in imitation of genuine leather; that since 1924 Masland Company "has used the term `Duraleather' in branding, labeling, designating and advertising its said imitation or artificial leather, which term is printed in very conspicuous type and is also accompanied with the phrase `The Durable Leather Substitute' in letters of less conspicuous type"; that samples of this imitation leather, sent to customers and prospective customers before 1924, "bore the word `Duraleather' without explanation that the product was imitation or artificial"; that since 1924 "these samples have borne the word `Duraleather' in conspicuous letters and the words `A Durable Leather Substitute' in letters so small as to be hardly discernible to the human eye"; that "Duraleather" is frequently billed to customers of petitioners by Sloane, without explanation on the billing or invoice that the same is imitation or artificial; that on orders to imitate samples of genuine leather furnished by persons desiring such imitation, Masland Company endeavors to make this particular imitation; that in 1923 the Virginia Trunk & Bag Company purchased from one of the jobber customers of petitioners a quantity of "Duraleather," which it used in making traveling bags and suitcases, and which it sold in several of our states as "Duraleather" bags, "Duraleather" suitcases, and "Duraleather" overnight bags, without explanation that the same were made of artificial or imitation leather, and that in the same year this company issued more than 10,000 catalogues and circulars "in which some of its bags and suitcases were described as `black cobra grained Duraleather,' without explanation that the same were made from imitation leather"; that the reason this company "used the word `Duraleather,' as above described, was because such name was given to the product by the manufacturers thereof"; that among the competitors of petitioners is A. C. Lawrence Leather Company, which is engaged in the manufacture of genuine leather, which it sells to makers of shoes, luggage, upholstered furniture, automobiles, novelties, and other products, located in several States; that this company for more than 25 years used its registered name, "Duro," as a trade-name for calfskin and veal skin leathers made and sold by it, and advertised this trade-name in connection with its said products as "Duro calf," "Duro veal," and "Duro calf leather"; that this company successfully opposed the registration by Masland Company of the word "Duraleather"; that there is a similarity between the designated products of this company and the "Duraleather" made by the Masland Company; that the use by petitioners "of the trade-name `Duraleather' has the capacity and tendency to mislead and deceive the consuming public into the belief that said `Duraleather' is a product of the aforesaid competitor and to cause the consuming public to purchase articles made in whole or in part from `Duraleather' in such belief"; that petitioners' use of the term "Duraleather" as applied to their imitation leather suggests the use of that term by their customers or the latters' customers "in the marketing and sale of products made in whole or in part of `Duraleather'"; that such uses have "the tendency and capacity to divert trade from those who are engaged in the manufacture of real leather and those who are engaged in the manufacture of imitation leather and selling and advertising the same as such imitation leather"; that such uses also have "the capacity and tendency to deceive the consuming public into the belief that the articles made therefrom are made from genuine leather and to cause the consuming public to purchase the same in such belief"; and that petitioners' recited "acts and practices place in the hands of others the means of committing a fraud upon the consuming public by enabling dealers to offer for sale and sell to the consuming public articles made from `Duraleather' as and for articles made of real leather."

These findings are challenged in the following summarized particulars:

That the name of petitioners' product since 1924 has not been "Duraleather," but "Duraleather, the Durable Leather Substitute," and that this amplified name is clearly legible.

That there is no evidence (a) of competition between petitioners and A. C. Lawrence Leather Company; (b) or between them and any manufacturer of genuine leather; (c) or that the public, or any one, has been, or is likely to be, deceived by such amplified name; (d) or that sales of this product were made without knowledge on the part of, or explanation to, purchasers that it was imitation leather; (e) that any one was, or is likely to be, deceived into the belief that the product was genuine leather; (f) or that the amplified name suggests to customers a product made therefrom as being made of leather or "Duraleather"; (g) or that thereby any trade has been, or is likely to be, diverted from manufacturers of real leather; (h) or that the consuming public has been, or is likely to be, deceived into the belief that articles made from that product are made from genuine leather; (i) or that the consuming public has been misled into purchasing such articles as a result of any such belief; (j) or that petitioners' use of that amplified name, places, or is likely to place, in the hands of others the means of deceiving the public into believing that such articles are made of real leather.

In dealing with these alleged errors, we must bear in mind that by section 5 of the act referred to (15 USCA § 45), "the Commission is empowered and directed to prevent persons, partnerships, or corporations, except banks, and common carriers subject to the acts to regulate commerce, from using unfair methods of competition in commerce," and that its findings as to facts, if supported by testimony, are made conclusive. Federal Trade Commission v. Winsted Hosiery Co., 258 U. S. 483, 42 S. Ct. 384, 66 L. Ed. 729; Curtis Pub. Co. v. Federal Trade Commission (C. C. A. 3) 270 F. 881, Id., 260 U. S. 568, 43 S. Ct. 210, 67 L. Ed. 408.

It is noted that the basic challenge relates to the...