FTC v. Royal Milling Co.
288 U.S. 212 (1933)

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U.S. Supreme Court

FTC v. Royal Milling Co., 288 U.S. 212 (1933)

Federal Trade Commission v. Royal Milling Co.

No. 393

Argued January 20, 1933

Decided February 6, 1933

288 U.S. 212

Syllabus

1. Respondents were engaged in the business of preparing, by a process of mixing and blending, plain and self-raising flour. Although not themselves grinders of the wheat from which their product was made, they were doing business under tradenames which included the words "milling company," or words of like import, and made representations to the trade calculated to convey the impression that they were grinders. Their product was sold in interstate commerce in competition with a similar article marketed by concerns which were, in fact grinders, and also by other "blenders," although the latter did not hold themselves out in any way as grinders. A large number of buyers preferred to purchase the product prepared by grinders, in the belief that the quality or price or both were better. Respondents' representations and tradenames induced many buyers to believe that they were grinders

Proceeding under § 5 of the Federal Trade Commission Act, and upon findings supported by evidence, the Commission ordered respondents to cease and desist from the use of such tradenames and from making such representations.

Held:

(1) The methods of respondents were unfair, and were methods of competition within the meaning of § 5 of the Act. P. 288 U. S. 216.

(2) It sufficiently appeared that the proceeding was in the interest of the public. P. 288 U. S. 216.

(3) While the findings and conclusions of the Commission are sustained, its orders should go no further than is reasonably necessary to correct the evil and preserve the rights of competitors and public, and, in respect of the use of the tradenames, which constitute

Page 288 U. S. 213

valuable assets in the nature of goodwill, this can be done by requiring proper qualifying words to be used in immediate connection with the names. P. 288 U. S. 217.

2. The purchasing public is entitled to protection against a species of deception whereby they are deceived into purchasing an article which they do not wish or intend to buy, and which they might or might not buy if correctly informed as to its origin, and its interest in such protection is specific and substantial. P. 288 U. S. 217.

58 F.2d 581 reversed.

CERTIORARI, 287 U.S. 590, to review a judgment setting aside certain cease and desist orders issued against respondents by the Federal Trade Commission.

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