U. S. Court Affirms Federal Trade Commission Forbiddin$ Calling Philippine Hardwoods "Mahogany"

The United States Circuit Court of Appeals, in New York City, has sustained the decision of the Federal Trade Commiision in the now famous "Philippine Mahogany" case, and decides that Philippine Hardwoods may NQT be described, advertised, sold, or offered for sale as "Mahogany)'

While this is not definitely announced, the general feeling in California is that the case.will not be carried farther, although there is some sentiment expressed that it be taken to the still higher courts.

The case was known as Indiana Quartered Oak Company, Petitioner, against Federal Trade Commission, ResFondent, was decided by Judges Manton, L. Hand, and Sawn, and was designated as follows:

"Petition to review an order of the Federal Trade Commission. The Indiana Quartered Oak Company petitions to review an order of the Federal Trade Commission'requiring the Petitioner to desist from advertising, describing, or selling or ofiering for sale under the term "Mahogany" or "Philippine Mahogany", woods which are imported from the Philippine Islands. ORDER AFFIRMED."

Judge Swan, in signing the decision, wrote the following dissenting opinion, which is very interesting, and practically recites the stand of the Petitioners, when he says:

"I reluctantly concur in the result because the Commission has made findings of deception of the public, which there is some evidence to support, though in my opinion it is greatly outw€ighed by contrary evidence. The purchasing public knows little, and cares less I think, about the botanical characteristics of mahogany. The Philippine Government, our own Departments of 'War, Commerce, and Agriculture, and The Interstate Commerce Commission, have been accustomed for years to refer to the woods in question as "Philippine Mahogany." The National Hardwood Lumber Association, since 1916, establishqd rules for grading "Philippine Mahogany." This term is used in foreign countries also. Combined with the word "Philippine", "mahogany" is used in its commercial as distinguished from its botanical sense. Suc! usage is common in the lumber industry, witness: Douglas Fir or Oregon Pine, which is a false hemlock; red cedar, which is a juniper; and many other instances which might be gited- Interference with such commercial usage does not seem to me justifiable, but in view of the Commission's findings the Court is powerless'"

The main order recites briefly the findings of the Federal Trade Commission in this case, which findings have been previously reported in these columns, and are well known, and goes into the matter of the botanical history of mahogany] and aPproves the finding that while not all branches-of ine Uetiiceae family are tiue mahogany, still all true mahogany comes from that family, and fr-om the Swietenia braichi and that this branch is not found in the Philippines.

These facts, of course, the defendants in this case have never disputed.

The deiision goes on to state that it has been shown that in the furniture industry there has been deception, and that both buyers and the consuming public have been deceived into thinking they were buying true mahogany, when they bought Philippine. "The trade as a whole does not underltand that that "Philippine Mahogany" is not mahogany, but such understanding is limited to dealers who actually sell the rough lumber."

Again: "If the term deceives the purchasing public its use may not be continued."

"Falie advertising," says the decision again, "and selling the commodity for and as a different commodity, has been denounced by the courts as a method of unfair competition within the meaning of the statute here invoked."

"It is not necessary fbr the Commission to establish intent to deceive the purchasing public. For the test of unfair competition was whether the natural and probable result of the use by the petitioner of such words was deceptive to the ordinary purchaser and made him purchase that which he did not intend to buy."

"It is argued that there is a want of public interest and that the Federal Trade Commission was not justified in assuming jurisdiction under Par. 5 of the Federal Trade Commlssion Act. That Act provides that "if it shall appear to the Commission that a proceeding by it in respect ihereof would be of benefit to the general interest of the public," jurisdiction may be taken by the Commission. The practices here involved affect the public who buy furniture and other products manufactured from mahogany wood as well as intermediate dealers in mahogany, and this was sufficient to sustain the trade commission in assuming jurisdiction. Order affirmed."

No announcement has yet come from the Philippine Mahogany Association as to what steps shall be taken next in the matter. The question of a trade name will immediately arise, if no further contest of the old trade name use is made.

Developments will be watched with much interest, and will undoubtedly be immediate si,nce the use of these Philippine woodi is growing very fast, and will undoubtedly continue to do so, regardless of this name decision.