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C. Howard Hunt Pen Co. v. Federal Trade Commission.

May 27, 1952

C. HOWARD HUNT PEN CO.
v.
FEDERAL TRADE COMMISSION.



Author: Mclaughlin

Before BIGGS, Chief Judge, and MCLAUGHLINand HASTIE, Circuit Judges.

Opinion of the Court

MCLAUGHLIN, Circuit Judge. Petitioner, a pen point manufacturer, seeks to set aside an order of the Federal Trade Commission of March 29, 1951 which ordered it forthwith to cease and desist from:

"(1) Representing, through the use on fountain pen points of the term '14 Kt. Gold Plated' or '14 K. Gold Plate,' or any other term or mark, that such points are coated or covered with an alloy of substantial thickness and not less than 14/24ths by weight of gold, when such is not the fact; or misrepresenting in any manner the quantity or quality of the gold coating or covering on any fountain pen points.

"(2) Representing in any manner, directly or by implication, that fountain pen points are made of an alloy of gold when such points are in fact made of other materials and are merely coated or covered with an alloy of gold.

"(3) Using the word 'Iridium' or the words 'Iridium Tipped,' or any simulation thereof, either alone or in conjunction with other words, to designate, describe or refer to any fountain pen points which are not in fact tipped with the element iridium.

"(4) Using the word 'Waltham' as an imprint on or in connection with the sale of any fountain pen points; or otherwise representing that any of the respondent's fountain pen points are the products of the Waltham Watch Manufacturing Company of Waltham, Massachusetts."

For many years the petitioner, a New Jersey corporation, has been making inexpensive fountain pen points at its Camden, New Jersey, plant and is one of the largest of such manufacturers. Its products are made of stainless steel which are then electroplated with a coating of gold alloy. Concededly these have been and are sold and shipped by it to manufacturers and assemblers of fountain pens all over the United States and in export trade.

Section 1

Petitioner has no objection to the form of Section 1 of the above order but asserts there is no basis for the section because, according to it, for some four years prior to the filing of the complaint in February, 1943, it has only done that which is plainly permissible under the section. The Commission rejected petitioner's assertion and found that petitioner "has continued to represent that its pen points are 14 karat gold plated when in fact they are coated with such a thin covering of such a minute quantity of gold alloy as to not constitute 14 karat gold plate as that term is understood by the purchasing public". The foundation of this statement and of Section 1 of the order is that the representation "14 Kt. Gold Plated" or "14 K. Gold Plate" means that as said in Section 1, "* * * such points are coated or covered with an alloy of substantial thickness and not less than 14/24ths by weight of gold,". That is a single complete representation. For a pen point to be properly designated as "14 K. Gold Plate" it must be covered with not less than 14 karat gold alloy of substantial thickness. If either the requisite fineness or thickness is missing it is not entitled to such description.Nor would it be, of course, though not vital in the present circumstances if both fineness and thickness were absent. The only question for our review of Section 1 is whether on the record as a whole there is substantial evidence in support of the finding of that section.

The findings of the Commission are set out below which deal generally with the necessity of a substantial thickness of gold plating of a fineness of not less than 14 karat on fountain pen points so marked.*fn1 As to certain of petitioner's pen points it was found that they had stamped on them representations as to their composition and quality. Among and typical of the representations were and are the following: "14 Kt Gold Plated" and "14 K Gold Plate". The Commission then found:

"The use by respondent of the inscriptions '14 Kt. Gold Plated' and '14 K Gold Plate' and others of similar import and meaning not set out herein, has the tendency and capacity to deceive and mislead the purchasing public into the belief that said fountain pen points so marked are plated with a substantial amount of 14 karat gold alloy of substantial thickness. In truth and in fact, respondent's fountain pen points so marked are not plated with a substantial amount of gold alloy and the plating on the said points is not of a substantial thickness.Its said points so marked are coated with a gold alloy of a thickness of less than seven millionths (.000007) of an inch. Certain of said points manufactured by respondent prior to 1938 were tested by the National Bureau of Standards and were found to be coated with a gold alloy of a thickness of from approximately 3.6 millionths (.0000036) to less than two millionths (.000002) of an inch, which gold alloy had a value of approximately five cents per gross of pen points. The coating of gold alloy on the pen points so tested consisted of such minute quantity that its actual karat fineness could not be determined. There is no evidence that respondent's methods of gold plating their pen points have varied from the time of manufacture of the pen points so tested."

It is true that the pen points of petitioner marked "14 Kt. Gold Plated" or "14 K Gold Plate" which were examined by the Bureau of Standards were from the period prior to 1939.Apparently they were manufactured in 1937. The testimony of the president of petitioner shows that it had continued with at least one of its objectionable imprints to sometime in September 1938. That type of imprint not only specified the fineness of the gold alloy sued in covering the pen point but by its legend that the point was "Gold Plate" or "Gold Plated" it affirmatively indicated that the gold alloy covering because of the amount of the gold alloy present Gold Plate' only on pen points which are labeled "Gold Plate" or "Gold Plated". Petitioner's claim that at least since April, 1939 (when its consultant, Davidoff, hereinafter mentioned, began his association with the firm) it has "* * * consistently stamped the term '14 Kt. Gold Plated' or '14 K. Gold Plate's only on pen points which are covered with an alloy of 'substantial thickness and not less than 14/24ths by weight of gold' * * *" implies a willingness to concede that prior to April, 1939 its pen points so marked were not plated with a substantial thickness of not less than 14 karat gold alloy. As to those pen points tested by the Bureau of Standards there is substantial evidence in the record that they had thin coatings of gold running from 1.4 to 3.6 millionths of an inch. They did not have even sufficient gold coating from which their karat fineness could be determined by the usual tests.

It is not seriously disputed that the representations "14 Kt. Gold Plated" or "14 K Gold Plate" mean to the purchasing public that pen points so marked are covered with a substantial thickness of gold alloy of not less than 14 karat fineness. One Government expert testified to a trade practice standard that the gold must be from a minimum of seven millionths of an inch thick before they can call it gold electroplate. The question of what would constitute a substantial thickness of gold alloy in gold plating is not before this court for the reason that the petitioner contends that the testimony of its witness, Davidoff, a consulting chemical engineer, shows that since April, 1939 the thickness of its pen point coating has been from ...


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