The respondent is using, on packages of snuff made and sold by it, this label

The Commission made an order to cease and desist which, inter alia, provided:

(3) It is further ordered, That the respondent, its officers, agents, representatives, servants, and employees, cease and desist from

(a) Using the word "dental" and the depiction of a tooth, or either of them, alone or in connection with any other word or words, in the brand name or on the labels on the containers of any of its snuff products to represent, describe or define such product, when its said product contains no ingredient, other than tobacco.

(b) Making, publishing, or circulating written or oral statements or representations in connection with the sale or distribution of any of its snuff products that such product will cure toothache, pyorrhea, bleeding gums, neuralgia, or other like maladies, when such product contains no ingredient other than tobacco.

To this the respondent answered:

With respect to paragraph 3 (a) of the said order, respondent asserts that the Commission has erred, exceeded its authority, and acted beyond its jurisdiction in ordering respondent to cease and desist from "using the word 'dental' and the depiction of a tooth, or either of them, alone or in connection with any other word or words, in the brand name or on the labels on the containers of any of its snuff products to [549] represent, describe, or define such product, when its said product contains no ingredient, other than tobacco", and respondent respectfully declines to comply with this part of the Commission's order.

It appearing, therefore, that the respondent has not obeyed the order, it remains for us to decide the question of law whether in view of the proofs, the order is lawful. The jurisdiction of this court to review orders made by the Trade Commission was considered by this court in Curtis Publishing Co. v. Federal Trade Commission, 270 Fed. Rep. 881, 909. We there said that Congress, in enacting that circuit courts of appeal "shall have jurisdiction of the proceeding and of the question determined therein, and shall have

power to make and enter upon the pleadings, testimony, and proceedings set forth in such transcript, a decree affirming, modifying, or setting aside the order of the Commission" was using language which aptly described the customary jurisdistion and power theretofore exercised by circuit courts of appeal in reviewing cases of alleged unfair business competition.

Considering the case in that light, we note that whatever may have been the possible interest of the public in the matter litigated, it clearly appeared, as the case proceeded, that the case was one between two competitors in the snuff business. From the proofs it will appear that the American Snuff Co., about 1900, by buying Ivey, Owen & Co., and continuing it as a subsidiary, acquired the latter's right to make a brand of snuff known as Dental Snuff, which the latter company had made since 1879 and sold thus labeled. At the time this snuff was originated, and for some time thereafter, it contained some ingredient, other than tobacco, calculated to preserve or be beneficial to the teeth and gums, and was so represented to the purchasing public. The labels on the containers of this snuff contained the word "dental ", together with a depiction of a tooth, and the words dental panacea 66 and It possesses a virtue that will

66

preserve the teeth".

After the Spanish-American War the Government placed a tax on proprietary medicines, and to avoid such liability on its snuff as a medicine, the respondent ceased to use any other ingredient in its snuff that had any supposed medicinal effect, and indeed shortly thereafter stopped using a flavoring extract, which of course had no medicinal property, and at once stopped using its earlier label and thereafter used its present one, depicted above, in which it will be noted that instead of the words "preserve the teeth" or the statement "It possesses a virtue that will preserve the teeth", there were used the words " preserves its flavor ". It will also be noted that it contains the statement that it is "made from select leaf and preserves its flavor". It also contains the statement that it is "made of pure tobacco ".

Referring to the composition of Scotch snuff, of which the snuff in question is made and is labeled as such, the Commission says it "consists of tobacco leaf and stems finely powdered or ground and is divided into several classes, the most important of which is strong Scotch snuff, which consists of powdered tobacco leaf and stems with nothing whatever added". It will thus be noted that respondent's statement on its label that the snuff is Scotch snuff and that it is "made of pure tobacco" was truthful and was, in effect, an averment that the snuff contained no other ingredient and necessarily that it had no medicinal quality. Such being the uncontroverted facts of the case, the Commission held that "this new label is so like the original label on said brand of snuff in arrangement of lettering and design, in coloration and general appearance, as to cause the one to be mistaken for the other, and to confuse and mislead purchasers familiar with the former product as to the character of the contents of the present containers".

We find no proof in the record which warrants any such finding. We have been referred to no testimony of a purchaser of the old snuff-one who bought prior to 1900-who avers that he or she was misled when they bought the snuff with the new marking upon it,

and, as said in Coca Cola Co. v. Koke Co. of America, 254 U. S. 143, "The plaintiff's position must be judged by the facts as they were when the suit was begun, not by the facts of a different condition and an earlier time". And it is very clear purchasers could not be misled by the present label which differs in several particulars from the old one. The old label stated it was a "dental panacea and averred that "It possesses a virtue that will preserve the teeth". The new label makes no such statement. The old label would seem to have left the impression that there was some element or virtue in its product that had a medicinal effect. The new label makes no such statement. In addition to the above, the back of the present label negatives any possible medicinal qualities. It [550] states that the snuff is "refined tobacco "; that "it is absolutely pure that "it has no artificial flavor "; that it "required no artificial flavoring because it is made of the best tobacco, which is aged for two or three years and then manufactured by a process that preserves the delightful flavor of the tobacco ".

We can see no unfairness in the respondent using the word "dental" and the picture of a tooth on its packages. Snuff users used it in two different ways. One class inhales it through the nostrils, and on that account it is properly styled nasal snuff. The other kind of users is under the word "dipping", described in the dictionary as "the practice of taking snuff by rubbing the teeth or gums with a stick or brush dipped in snuff".

It is quite clear from the literature quoted in the record that in "dipping" snuff simply serves as any other paste or dentifrice, as an abrasive of a desired flavor. Indeed, the derivation of the word, "dens-dentis", a tooth, and "fricure " to rub, friction, shows that the word "dental" as contrasted with "nasal" truly describes the mode of use which the respondent's product answers. In the Journal of the American Dental Association, January, 1928, it is said: "The modern toothbrush may not be perfect, but its present status is a matter of evolution from the 'chew stick'. One end of a wooden twig was beaten to a soft, fibrous condition in those days, and the primitive brush was ready for use."

Moreover, the proofs show that the market for dipping snuff is in the remoter regions of the South. It is described by the writer of "The Carolina Mountains":

Nor is snuff taken after the manner of former generations of snuff takers. Here the people "dip", that is to say, a stick chewed into a brush at one end and kept for the purpose is dipped into the snuff and rubbed over the gums and teeth. It is not a pretty practice, but it seems to afford peculiar satisfaction, enormous quantities of snuff being consumed in this manner. When a mountain woman refers to her “toothbrush" the snuff stick is what she means. She says that to dip snuff preserves the teeth and strengthens the constitution.

It will thus be seen that the word "dental" as used in connection with snuff occupies substantially the same relation as the word "nasal" does, and both equally and truthfully represent the particular use to be made of the snuff.

We accordingly hold that the order to cease and desist heretofore granted was unlawful and will be so adjudged.

FEDERAL TRADE COMMISSION v. CASSOFF1

(Circuit Court of Appeals, Second Circuit. February 17, 1930)

No. 192

TRIAL KEY-No. 368-STIPULATION THAT DEFENDANT'S SHELLAC WAS NOT ENTIRELY GENUINE DID NOT JUSTIFY REQUIREMENT THAT DEFENDANT STATE PERCENTAGES OF OTHER INGREDIENTS, BUT MERELY THAT DEFENDANT ADVERTISE SAME AS IMITATION SHELLAC NOT 100 PER CENT SHELLAC (15 USCA SEC. 45). Stipulated statement of facts wherein it was agreed that "shellac" was composed solely of genuine shellac gum dissolved in alcohol, that defendant manufactured and sold in interstate commerce product not composed wholly of genuine shellac gum dissolved in alcohol, but advertised product as white shellac and orange shellac without indicating that product contained any other gum, and that defendant was in competition with manufacturers whose shellac was composed solely of shellac gum dissolved in alcohol, did not Justify finding that defendant was engaged in unfair method of competition in violation of 38 Stat. 719 (15 USCA sec. 45), nor require defendant to state percentages of other ingredients making up content of its shellac, but merely justified requirement that defendant label goods as "shellac substitute", or "imitation shellac ", accompanied by statement that it is not 100 per cent shellac.

TRADE-MARKS, TRADE-NAMES AND UNFAIR COMPETITION KEY-No. 80%1⁄2-FEDERAL TRADE COMMISSION ACT IS INTENDED TO PREVENT FRAUD ON PURCHASING PUBLIC (15 USCA SECS. 41-51).

Purposes of Federal Trade Commission Act (15 USCA secs. 41-51) and the enforcing power of the Federal Trade Commission are directed to prevention of fraud on the purchasing public.

(The syllabus is taken from 38 F. (2d) 790)

Application by the Federal Trade Commission to enforce its order against L. F. Cassoff, as individual doing business under the names and styles of the Central Paint & Varnish Works and the Central Shellac Works, under Federal Trade Commission Act section 5 (15 USCA sec. 45). Order modified, and, as modified, enforced.

Meyer Kraushaar, of New York City, for respondent.

Robert E. Healy, chief counsel, Federal Trade Commission, Martin A. Morrison, assistant chief counsel, and James T. Clark, all of Washington, D. C., for petitioner.

Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

PER CURIAM:

The petitioner seeks, under section 5 of the Federal Trade Commission Act, to enforce an order issued against respondent, requiring him to cease and desist from using the word "shellac " in labels or advertisements of varnish which he manufactured and sold and

1 Reported in 88 F. (2d) 790. Case before the Commission reported in 7 F. T. C. 382.

which was not composed entirely of shellac gum dissolved in alcohol. The order permitted the use of labels and advertisements in the sale of such shellac if it were accompanied by the words clearly indicating the other ingredients used and setting forth the percentage of each.

The controversy was submitted to the Federal Trade Commission upon a stipulated statement of facts wherein it was agreed that "shellac ", as commercially known, is a product composed solely of genuine shellac gum dissolved in alcohol and is thus commonly known amongst jobbers, dealers, and the purchasing public; that the respondent manufactured and sold in interstate commerce, a product not composed wholly of genuine shellac gum dissolved in alcohol and that he advertised and labeled his product as "White Shellac" and "Orange Shellac ", without indicating in any way whatever on such labels, brands, and advertisements that the prod uct contained any other gum, ingredient, or substitute for gum than genuine shellac gum. It was further stipulated that the respondent is in competition with other manufacturers of shellac varnishes whose products are branded and advertised as shellac or shellac varnishes and are composed solely of shellac gum dissolved in alcohol. The Commission found that the advertising and sale of respondent's shellac with the words "White Shellac or "Orange Shellac " was false and had the capacity and tendency to and did mislead the purchasing public into the belief that the product so labeled, branded, and advertised was composed solely of genuine shellac gum dissolved in alcohol and that this induced the purchasers to buy in that belief. It concluded that this was an unfair method of competition in commerce and constituted a violation of the act of [791] Congress approved September 26, 1914 (38 Stat. 719). The order to cease and desist thereupon entered forbids such labeling and advertising unless accompanied by words clearly and distinctly indicating that such product contains other substances, ingredients, or gum of which the varnish is composed with the percentages of all such substances, ingredients, or gum therein used clearly stated on the label, brand, or other containers. The respondent's answer asked leave to introduce additional evidence, to be taken before the Federal Trade Commission, to show that there was no violation of its order and that there was no necessity for requiring respondent to disclose the percentages of the ingredients in his product. He argues that there is no evidence to support this requirement.

The stipulation entered into by the parties does not justify the findings and there is no evidence which requires a statement as to the percentages of the other ingredients which make up the respondent's substituted shellac. If the respondent labels his goods and advertises the same as "shellac substitute or "imitation shellac ", accompanied by the statement that it is not 100 per cent shellac, that would be sufficient to prevent a fraud upon the purchasing public. It would constitute a statement that the respondent was not selling genuine shellac and that is as far as the findings justify an order to cease and desist. The purposes of the Federal Trade Commission Act and the enforcing power of the Commission

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