section 5 of the Federal Trade Commission Act, where such trademark is in fact used falsely and as a part of an unfair method of competition. Assuming that respondent has registered his trademark as above indicated, the test of his methods of competition is not whether a trade-mark may have been registered, but whether his methods fall within the condemnation of the Federal Trade Commission Act, which declares, "unfair methods of competition in commerce are declared unlawful ". Brougham et al. v. Blanton Mfg. Co., 249 U. S. 495.

Ra

The evidence does not disclose how extensive a business respondent has done, but it is aparent that he has been, and is engaged in, advertising and distributing his product in interstate commerce. dium is used largely for the treatment of disease, and especially cancer, and it can hardly be gainsaid that any misrepresentation with respect to the identity of respondent's product is a matter of public interest with which the Commission is, by section 5 of the Trade Commission Act, empowered to deal.

Respondent Kay relies largely upon the testimony of a number of patients who had various ailments, and who testified to beneficial results from the use of respondent's product contained in plaques and tubes, and applied, presumably, as radium is. Witnesses for the Commission accounted for such results and testimony as due to mental suggestion. Whether that be correct or not, the proneness of lay patients to err in accrediting responsibility for benefits to health is well understood.

The substance known to science as radium, so the evidence indicates, is expensive to produce, often requiring reduction of a ton of ore to produce a milligram of radium, sells in the market at around $110 per milligram, requires a large ore refining plant for its production, and invariably responds positively to the photographic film and electroscopic tests, while the Kay product is negative under the two tests last mentioned, is produced in a laboratory in his home, and offered for sale at $10 per milligram. Granting that discovery of a new source and comparatively inexpensive method of extraction might account for some of these differences, the fact that the Kay product fails under the scientific tests, together with the other dif ferences noted, strongly indicate a different substance rather than a difference in source and methods of extraction of radium. Opinion evidence that the [163] Kay product is not radium was also adduced. It is apparent from the foregoing, without further discussion of detail, that the findings of the Commission were amply sustained by evidence.

A considerable period of time elapsed between the time when the Commission filed its original findings and order to cease and desist, and the filing of its modified findings and order. After the original findings and order were filed a stay was applied for, which was denied on March 29, 1924. The record does not disclose any report by the respondent Kay to the first order to cease and desist, and the matter seems to have remained dormant until June 21, 1928, when the modified findings and order were made, to which response was made by the respondents as above indicated. The transcript of the record was not filed in the court until October 9, 1928. While we withhold

approval of so long delay, the question is apparently covered by the provisions of section 5 of the Trade Commission Act, which provides: Until a transcript of the record in such hearing shall have been filed in a Circuit Court of Appeals of the United States, as hereinafter provided, the Commission may at any time, modify or set aside, in whole or in

part, any report or any order made or issued by it under this section.

If more prompt action was desired by the respondent, the same section of the act permits the respondent to petition for review and requires the Commission to certify and file in court the required transcript.

Paragraph 4 of the modified order of the Commission is somewhat indefinite and uncertain, and, we believe, susceptible of a construction broader than the facts warrant. It is ordered that the said paragraph 4 be eliminated from the order of the Commission and that in lieu thereof there be inserted the following:

Selling, offering for sale, or advertising, as and for radium, or as containing radium or possessing radioactive properties, or applying, employing, or using descriptively the word "radium" or any compound thereof implying radioactivity, in connection with the sale, offering for sale, or advertising of any such product, or making or causing to be made in any advertising matter or otherwise any representations, statements, or assertions that the product advertised or sold is radium, or contains radium or radioactive properties, unless such product is in fact radium and possesses the radioactive properties of radium as ascertained by photographic and electroscopic tests applied by generally recognized authorities such as the United States Bureau of Standards at Washington, D. C.

With the order of the Federal Trade Commission thus modified the prayer of the petition is granted.

FEDERAL TRADE COMMISSION v. GRAND RAPIDS VARNISH CO.1

(Circuit Court of Appeals, Sixth Circuit. October 8, 1929.)

No. 5195

CONSENT DECREE AFFIRMING Order of the COMMISSION Requiring RespONDENT TO CEASE AND DESIST FROM THE PRACTICE OF COMMERCIAL BRIBERY, AS IN SAID ORDER SET FORTH."

Application for enforcement of an order of the Federal Trade Commission.

Robert E. Healy, Adrien F. Busick, and James T. Clark, all of Washington, D. C., for petitioner.

Ring & Cobb, of Washington, D. C., for respondent.

PER CURIAM:

Consent decree affirming modified order of Federal Trade Commission.

141 F. (2d) 996.

See 10 F. T. C. 339.

Said decree follows:

The Federal Trade Commission having filed its verified petition for a decree affirming a modified order to cease and desist, made by it on July 19, 1926, against Grand Rapids Varnish Co., and for a decree requiring compliance by the said Grand Rapids Varnish Co. with said modified order of the Commission: notice of the filing of said petition having been duly served upon said Grand Rapids Varnish Co.; petitioner having therein alleged failure and neglect by respondent to obey said modified order and the respondent having

FEDERAL TRADE COMMISSION v. KLESNER 1

(Supreme Court. Argued and submitted April 10, 1929. Decided October 14, 1929)

No. 8

AS

TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 802-PROCEEDING TO PROHIBIT DEFENDANT FROM USING WORDS "SHADE SHOP" IDENTIFICATION OF BUSINESS NOT INVOLVING PUBLIC INTEREST, ACTION BY FEDERAL TRADE COMMISSION WAS UNAUTHORIZED (FEDERAL TRADE COMMISSION ACT SEC. 5; 15 USCA SEC. 45).

Proceeding to restrain defendant from using words "Shade Shop" as identification of business conducted by him held to involve private controversy, so that filing of complaint before Federal Trade Commission was not in public interest, and action by Commission was unauthorized under Federal Trade Commission Act section 5 (15 USCA sec. 45).

TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 802ONE DEEMING HIMSELF AGGRIEVED BY UNFAIR COMPETITION MAY REQUEST FEDERAL TRADE COMMISSION TO FILE COMPLAINT (FEDERAL TRADE COMMISSION ACT SEC. 5; 15 USCA SEC. 45).

Person deeming himself aggrieved by use of unfair method of competition can not, under Federal Trade Commission Act section 5 (15 USCA sec. 45), Institute before Commission complaint against alleged wrongdoer, nor may Commission authorize him to do so, but he may bring matter to Commission's attention and request it to file complaint.

TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 801⁄2REQUIREMENT THAT PROCEEDING BY FEDERAL TRADE COMMISSION MUST BE TO INTEREST OF PUBLIC IS NOT SATISFIED BY PROOF OF MISAPPREHENSION AND CONFUSION OF PURCHASERS (FEDERAL TRADE COMMISSION ACT SEC. 5; 15 USCA SEC. 45).

denied the same and no evidence thereon having been submitted to the court; and this court having jurisdiction of the proceedings; and the said Grand Rapids Varnish Co. having filed with this court its duly authorized and attested consent to the affirmance by this court of the said modified order of the Federal Trade Commission and to the entry of a decree so affirming said modified order and requiring the said Grand Rapids Varnish Co. to comply therewith; and notice of a motion by the Federal Trade Commission, for the entry of such a decree having been duly served on said Grand Rapids Varnish Co., by its president.

It is hereby ordered, adjudged and decreed, Upon the motion of the said Federal Trade Commission, due notice of the said motion having been served upon the respondent, said Grand Rapids Varnish Co., that the said order of the Federal Trade Commission, to wit: "It is now ordered, That the respondent, Grand Rapids Varnish Co., its agents representatives, servants, and employees do cease and desist from directly or indirectly secretly giving, or offering to give, employees of its customers or prospective customers, or those of Its competitors' customers or prospective customers, without the knowledge or consent of their employers, as an inducement to cause their employers to purchase or contract to purchase, from the respondent, varnish and kindred products, or to influence such employers to refrain from dealing, or contracting to deal, with competitors of respondent, without other consideration therefor, money or anything of value, be, and the same is hereby affirmed."

And it is hereby further ordered, adjudged and decreed, That the said Grand Rapids Varnish Co., its agents, representatives, servants, and employees, forthwith comply with the said modified order of the Federal Trade Commission; and that it, the said Grand Rapids Varnish Co., its agents, representatives, servants, and employees do forthwith cease and desist from directly or indirectly secretly giving, or offering to give, employees of its customers or prospective customers, without the knowledge or consent of their employers, as an inducement to cause their employers to purchase or contract to purchase, from the respondent, varnish and kindred products, or to influence such employers to refrain from dealing, or contracting to deal, with competitors of respondent, without other consideration therefor, money or anything of value.

1 Reported in 280 U. S. 19, 59 Sup. Ct. Rep. 1. The case before the Commission is reported in 5 F. T. C. 24.

24925°-31—VOL 13- -38

Under Federal Trade Commission Act section 5 (15 USCA sec. 45), providing that complaint may be filed only if it shall appear to Commission that proceeding by it would be to interest of public, such requirement is not satisfied by proof that there has been misapprehension and confusion on part of purchasers, or even that they have been deceived.

TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 80%1⁄2FEDERAL TRADE COMMISSION EXERCISES BROAD DISCRETION IN DETERMINING WHETHER PROCEEDING WILL BE IN PUBLIC INTEREST (FEDERAL TRADE COMMISSION ACT SEC. 5; 15 USCA SEC. 45).

In determining whether proposed proceeding under Federal Trade Commission Act section 5 (15 USCA sec. 45), will be in public interest, Commission exercises broad discretion, but in order to justify filing of complaint public interest must be specific and substantial.

TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 80%RESOLUTION THAT FEDERAL TRADE COMMISSION HAD REASON TO BELIEVE DEFENDANT WAS VIOLATING STATUTE, AND THAT PROCEEDING BY IT WOULD BE TO INTEREST OF PUBLIC, HELD SUFFICIENT TO CONFER JURISDICTION ON COMMISSION (FEDERAL TRADE COMMISSION ACT SEC. 5; 15 USCA SEC. 45).

Resolution declaring that Federal Trade Commission had reason to believe defendant was violating Federal Trade Commission Act section 5 (15 USCA sec. 45), and that it appeared to Commission that proceeding by it in respect thereof would be to interest of public, held sufficient to confer on Commission jurisdiction of complaint against defendant, since such section makes Commission's finding of facts conclusive, if supported by evidence, and preliminary determination that institution of proceeding will be in public interest, while not strictly within scope of such provision, will ordinarily be accepted by courts.

TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-No. 80%FEDERAL TRADE COMMISSION'S ACTION AUTHORIZING FILING OF COMPLAINT IS REVIEWABLE (FEDERAL TRADE COMMISSION ACT SEC. 5; 15 USCA SEC. 45).

Action of Federal Trade Commission in authorizing filing of complaint under Federal Trade Commission Act section 5 (15 USCA sec. 45), like its action in making an order thereon, is subject to judicial review.

(The syllabus is taken from 50 Sup. Ct. Rep. 1)

Petition by Federal Trade Commission against Alfred Klesner, doing business under the name of Shade Shop, etc. Judgment was entered dismissing the petition (58 App. D. C. 100, 25 F. (2d) 524), and the Federal Trade Commission brings certiorari. Affirmed. The Attorney General and Mr. Adrien F. Busick, of Washington. D. C., for petitioner.

Mr. Clarence R. Ahalt, of Washington, D. C., for respondent.

[22]

Mr. JUSTICE BRANDEIS delivered the opinion of the court.

This case is here on certiorari, for the second time. It was brought in the Court of Appeals of the District of Columbia by the Federal

Trade Commission under section 5 of the act of September 26, 1914, c. 311, 38 Stat. 717, 719, to enforce an order entered by it. The order directs Klesner, an interior decorator, who does business in Washington under the name of Hooper & Klesner, to "cease and desist from using the words' Shade Shop' standing alone or in conjunction with other words as an identification of the business conducted by him, in any manner of advertisement, signs, stationery, telephone, or business directories, trade lists or otherwise". That court dismissed the suit on the ground that, unlike United States circuit courts of appeals, it lacked jurisdiction to enforce orders of the Federal Trade Commission. 6 F. (2d) 701.1 On the first certiorari, we reversed the decree and directed that the cause be remanded for further proceedings. Federal Trade Commission v. Klesner, 274 U. S. 145. Then the case was reargued before the court of appeals, on the pleadings and a transcript of the record before the [23] Commission; and was dismissed on the merits, with costs. 25 F. (2d) 524. This second writ of certiorari was thereupon granted. 278 U. S. 591. We are of opinion that the decree of the court of appeals should be affirmed-not on the merits, but upon the ground that the filing of the complaint before the Commission was not in the public interest.

The conduct which the Commission held to be an unfair method of competition practiced within the District had been persisted in by Klesner ever since December, 1915. The complaint before the Commission was filed on December 18, 1920. The order sought to be enforced was entered June 23, 1922. This suit was begun on May 13, 1924. The evidence before the Commission, which occupies 394 pages of the printed record in this court, is conflicting only to a small extent. The findings of the Commission are in substance as follows:

Sammons has for many years done business in Washington as maker and seller of window shades, under the name of "The Shade Shop". Prior to 1914, that name had, by long use, come to signify to the buying public of the District the business of Sammons. The concern known as Hooper & Klesner has also been in business in Washington for many years. Prior to 1915, its trade had consisted mainly of painting and of selling and hanging wall paper. It had dealt also, to some extent, in window shades, taking orders which it had executed either by Sammons or some other maker of window shades. In 1914, Hooper & Klesner leased a new store pursuant to an arrangement with Sammons, and sublet to him a part of it. There Sammons continued his business of making and selling window shades as an independent concern under the name of "The Shade Shop". His gross sales there were at the rate of $60,000 a year. On a Sunday in November, 1915, he removed all his effects from those [24] premises and established his business in another building four doors away.

Sammons's removal was in confessed violation of his agreement with Hooper & Klesner. An acrimonious controversy ensued. Threats of personal violence led to Sammons having Klesner ar

1 Also reported in 9 F. T. C. 650. Also reported in 11 F. T. C. 661. Also reported in 12 F. T. C. 717.