In the Matter of the Complaint Against

COSVETIC LABORATORIES, or any variation thereof at
P.O. Boxes 95543, 95544 and 95545,
Atlanta, GA 30347;

and at P.O. Boxes 14092, 49024, 49087, 49303 and 49425
Atlanta, GA 30329;

and at P.O. Boxes 11627 and 53098
and at 470 E. Paces Ferry Road
Atlanta, GA 30305;

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Box 10064,
Atlanta, GA 30319;

P.O. Box 52977,
Atlanta, GA 30355;

P.O. Boxes 20190, 20429 and 20482,
Atlanta, GA 30325

COSVETIC LABS, or any variation thereof at
P.O. Boxes 1044 and 1097,
Deerfield Beach, Fl 33441;

and at P.O. Box 50135,
Lighthouse Point, FL 33064;

and at P.O. Box 2481,
Pompano Beach, FL 33061

FREE REIN at P.O. Box 12427,
Atlanta, GA 30355

BRASWELL, INC. at
P.O. Box 81345,
Atlanta, GA 30366;

and at P.O. Box 95544,
Atlanta, GA 30347;

and at P.O. Box 10064,
Atlanta, GA 30319;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START CLUB at
P.O. Box 14018,
Atlanta, GA 30324

HEAD START, INC. at
P.O. Box 53141,
Atlanta, GA 30355;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

COSVETIC LABORATORIES, or any variation thereof at
P.O. Boxes 95543 and 95545,
Atlanta, GA 30347

and at P.O. Boxes 14092, 49024, 49087, 49303 and 49425
Atlanta, GA 30329;

and at P.O. Boxes 11627 and 53098
and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Box 10064,
Atlanta, GA 30319;

and at P.O. Box 52977,
Atlanta, GA 30355;

and at P.O. Boxes 95544 and 95545,
Atlanta, GA 30347;

and at P.O. Box 20482,
Atlanta, GA 30325

BRASWELL, INC.
at P.O. Box 81345,
Atlanta, GA 30366;

and at P.O. Box 95544,
Atlanta, GA 30347;

and at P.O. Box 10064,
Atlanta, GA 30319;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START, INC.
at P.O. Box 53141, Atlanta, GA 30324;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START at P.O. Box 14018,
Atlanta, GA 30324

STANDARD RESEARCH LABS, or any variation thereof at
P.O. Boxes 9547 and 9667,
Fort Lauderdale, FL 33064;

and at P.O. Box 852,
Pompano Beach, FL 33061;

and at P.O. Box 5009,
Pompano Beach, FL 33064

STANDARD RESEARCH LABS, or any variation thereof at
P.O. Boxes 9667 and 95547,
Fort Lauderdale, FL 33310;

and at P.O. Box 5009,
Pompano Beach, FL 33064

COSVETIC LABORATORIES, or any variation thereof at
P.O. Boxes 49024, 49087, 49303 and 49425
Atlanta, GA 30329;

and at P.O. Box 11627,
Atlanta, GA 30305;

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Box 95544,
Atlanta, GA 30347;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS, or any variation thereof at
P.O. Box 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at P.O. Box 14092,
Atlanta, GA 30324

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START CLUB
at P.O. Box 14018,
Atlanta, GA 30324

HEAD START, INC.
at P.O. Box 53141,
Atlanta, GA 30355

and at 470 E. paces Ferry Road,
Atlanta, GA 30305

COSVETIC LABORATORIES, or any variation thereof at
P.O. Boxes 14092, 49024, 49087, 49303 and 49425
Atlanta, GA 30329;

and at P.O. Box 95543,
Atlanta, GA 30347;

and at P.O. Box 53098,
Atlanta, GA 30305;

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS, or any variation thereof at
P.O. Box 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at P.O. Box 81345,
Atlanta, GA 30366

and at P.O. Box 95544,
Atlanta, GA 30347

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START, INC.
at P.O. Box 53141,
Atlanta, GA 30355

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

QUEST RESEARCH
at P.O. Box 14009,
Atlanta, GA 30324

VANGAULT LABS
at P.O. Box 851,
Bradenton, FL 33506

STANDARD RESEARCH LABS at
P.O. Box 852,
Pompano Beach, FL 33061

COSVETIC LABORATORIES, or any variation thereof at
P.O. Boxes 14092, 49087 and 49425
Atlanta, GA 30329;

and at P.O. Boxes 95543, 95544 and 95545
Atlanta, GA 30347

and at P.O. Box 53098,
Atlanta, GA 30305;

and at P.O. Box 10064,
Atlanta, GA 30319;

and at P.O. Box 14018,
Atlanta, GA 30324;

and at P.O. Box 81345,
Atlanta, GA 30326;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS, or any variation thereof at
P.O. Box 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at P.O. Box 53098,
Atlanta, GA 30355

and at P.O. Box 10064,
Atlanta, GA 30319;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START CLUB at P.O. Box 14018,
Atlanta, GA 30324

HEAD START, INC. at P.O. Box 53141,
Atlanta, GA 30355;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

COSVETIC LABORATORIES, or any variation thereof at
P.O. Box 53098,
Atlanta, GA 30305

and at P.O. Boxes 10101 and 10064,
Atlanta, GA 30319;

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Boxes 14092 and 49425,
Atlanta, GA 30329;

and at P.O. Boxes 95543 and 95545,
Atlanta, GA 30347;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS, or any variation thereof at
P.O. Box 1097,
Deerfield Beach, FL 33441

PEAK LABS at P.O. Boxes 49024, 49087 and 49303
Atlanta, GA 30329;

and at P.O. Boxes 1097 and 1044,
Deerfield Beach, FL 33441

BRASWELL, INC.
at P.O. Bose 81345,
Atlanta, GA 30366

and at P.O. BOx 95544,
Atlanta, GA 30347

and at P.O. Box 53098,
Atlanta, GA 30355

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START CLUB
at P.O. Box 14018,
Atlanta, GA 30324

HEAD START, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305

QUEST RESEARCH
at P.O. Box 14009,
Atlanta, GA 30324

STANDARD RESEARCH LABORATORY, or any variation thereof at
P.O. Box 9667,
Fort Lauderdale, FL 13310

STANDARD RESEARCH LABS, or any variation thereof
at P.O. Box 852,
Pompano Beach, FL 33061;

and at P.O. Box 5009,
Pompano Beach, FL 33064

COSVETIC LABORATORIES,
or any variation thereof at
P.O. Box 53098,
Atlanta, GA 30305;

and at P.O. Boxes 10101 and 10064,
Atlanta, GA 30319;

and at P.O. Boxes 14092, 49024, 49087, 49303 and 49425
Atlanta, GA 30329;

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Boxes 95543, 95544 and 95545,
Atlanta, GA 30347;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS, or any variation thereof at
P.O. Box 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at P.O. Box 10064,
Atlanta, GA 30319

and at P.O. Box 53098,
Atlanta, GA 30355;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START CLUB
at P.O. BOx 14018,
Atlanta, GA 30324

HEAD START, INC.
at P.O. Box 53141,
Atlanta, GA 30355;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

QUEST RESEARCH
at P.O. BOx 14009,
Atlanta, GA 30324

COSVETIC LABORATORIES,
or any variation thereof at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Boxes 49087 and 49425,
Atlanta, GA 30329;

and at P.O. Box 95543,
Atlanta, GA 30347;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS,
or any variation thereof
at P.O. Boxes 1044 and 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305

and at P.O. BOx 53141,
Atlanta 30355

PEAK LABS
at P.O. Boxes 49024, 49087 and 49303,
Atlanta, GA 30329

COSVETIC LABORATORIES,
or any variation thereof
at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABORATORIES,
or any variation thereof
at P. O. Box 49425,
Atlanta, GA 30329;

and at P.O. Box 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305;

and at P.O. Box 53141,
Atlanta, GA 30355

COSVETIC LABORATORIES,
or any variation thereof
at P.O. Box 10064,
Atlanta, GA 30319;

and at P.O. Box 14092,
Atlanta, GA 30329;

and at P.O. Boxes 95543 and 95545,
Atlanta, GA 30347;

and at P.O. Boxes 20190 and 20429,
Atlanta, GA 30325

COSVETIC LABS,
or any variation thereof
at P.O. Box 49087,
Atlanta, Ga, 30329;

and at P.O. Box 1097,
Deerfield Beach, FL 33441

BRASWELL, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305;

and at P.O. BOx 53098,
Atlanta, GA 30305

HEAD START CLUB
at P.O. Box 14018,
Atlanta, GA 30324

HEAD START, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305

and at P.O. Box 53141,
Atlanta, GA 30355

JOJOBA OIL at P.O. Box 9669,
Atlanta, GA 30329

COSVETIC LABORATORIES,
or any variation thereof
at P.O. Boxes 14092, 49024, 49087, 49303 and 49425
Atlanta, GA 30329;

and at P.O. Box 53098,
Atlanta, GA 30305;

and at P.O. BOxes 10064 and 10101,
Atlanta, GA 30319;

and at P.O. Box 14048,
Atlanta, GA 30324;

and at P.O. Box 20482,
Atlanta, GA 30325;

and at P.O. Box 81345,
Atlanta, GA 30366;

and at P.O. BOxes 95543, 95544 and 95545,
Atlanta, GA 30347;

and at P.O. BOxes 20190 and 20429,
Atlanta, GA 30325;

and at P.O. Box 1097,
Deerfield Beach, FL 33441

COSVETIC LABS,
or any variation thereof
at P.O. Box 1044,
Deerfield Beach, FL 33441

HEAD START CLUB
at P.O. Box 14018,
Atlanta, GA 30324

BRASWELL, INC.
at P.O. Box 10064,
Atlanta, GA 30319;

and at P.O. Box 81345,
Atlanta, GA 30366;

and at P.O. Box 95544,
Atlanta, GA 30347;

and at P.O. Box 53098,
Atlanta, GA 30355;

and at 470 E. Paces Ferry Road,
Atlanta, GA 30305

HEAD START, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305;

and at P.O. Box 53141,
Atlanta, GA 30355

LaFLEUR NATURAL
at P.O. Box 14048,
Atlanta, GA 30324

and at P.O. Boxes 49087 and 49303,
Atlanta, GA 30329

COSVETIC LABORATORIES,
or any variation thereof
at P.O. Box 49424,
Atlanta, GA 30329

HEAD START, INC.
at 470 E. Paces Ferry Road,
Atlanta, GA 30305;

and at P.O. Box 53141,
Atlanta, GA 30355

BRASWELL, INC. at
470 E. Paces Ferry Road,
Atlanta, GA 30305

BIO-GENESIS
P.S. Docket No. 8/163

and cases consolidate therewith -
(8/179; 8/180; 8/181; 9/77 and 9/88);

BIO-GENESIS SHAMPOO P.S. Docket No. 9/36
and cases consolidate therewith -
(9/37; 9/38 and 9/39);

BIO-PRIMA II P.S. Docket No. 8/160;
BIO-PRIMA II SHAMPOO
P.S. Docket No. 9/35;

BIOTIN PRODUCTS LB-49 P.S. Docket No. 9/6 and cases consolidated therewith -
(9/5; 9/7; 9/8; 9/9 and 9/85);

BIO NC-36 P.S. Docket No. 9/2 and cases consolidated therewith -
(9/3; 9/4; 9/5 and 9/87);

BIOTIN GEL P.S. Docket No. 8/177;

BIOTEIN H-3 P.S. Docket No. 9/13 and cases consolidated therewith -
(9/14; 9/15; 9/16 and 9/86);

BIOTEIN H-3 wit NUCLEIC ACID P.S. Docket No. 9/17 and cases consolidated
therewith - (9/ 9/19; 9/20; 9/2 9/22 and 9/83);

NON-BIOTIN PRODUCTS AMINO HAIR FOOD FOR P.S. Docket No. 8/1;
FORMULA 40 P.S. Docket No. 8/196 and cases consolidated therewith -
(8/197; 8/198; 8/199; 9/1 and;

IMPROVED FORMULA 40 P.S. Docket No. 9/10 and cases consolidated therewith -
(9/11; 9/12 and 9/79);

GERMAN FORMULA HAIR VITAMINS an MEDICATED SHAMPO P.S. Docket No. 8/165
and cases consolidated therewith - 8/186; 8/187; 8/188 and 9/80);

NUCLEIC ACID GE P.S. Docket No. 8/167 and cases consolidated therewith -
(8/192; 8/193); 8/194; 8/195 and 9/84);

JOJOBA OIL P.S. Docket No. 8/164 and cases consolidated therewith -
(8/182; 8/183; 8/184; 8/185 and 9/82);

HERBAL HAIR NATURALLY P.S. Docket No. 8/166 and cases consolidated
therewith - (8/189; 8/190; and 8/191)

Duvall, William A.

APPEARANCES FOR COMPLAINANT:
Sandra C. McFeeley, Esq.;
Thomas A. Ziebarth, Esq.;
Frederick I. Rosenberg, Esq.;
Law Department,
United States Postal Service,
Washington, DC 20260-1100

APPEARANCES FOR RESPONDENT:
Jack Paller, Esq.;
John M. Creger, Esq.;
Katz, Paller & Land,
470 East Paces Ferry Road,
Suite 2000, Atlanta, GA 30363

INITIAL DECISION

These proceedings were initiated by Complaints filed by the Consumer Protection division, Law Department, United States Postal Service on July 11, July 15, July 17, August 8, August 11, and October 2, 1980. In the Complaints it is alleged that the Respondent is in violation of § 3005 of Title 39, United States Code in that Respondent is engaged in conducting schemes and devices for obtaining money or property through the mails by means of materially false representations concerning numerous hair and scalp products. The products will be discussed in three groups, as follows:

Group 1. Bio-Genesis; Bio-Prima II; Bio-Genesis Shampoo; and Bio-Prima II Shampoo;

Group 2. Other biotin products; and

Group 3. Non-biotin products.

The parties named in the caption are hereafter referred to in the singular as "Respondent".

Respondent is charged, in substance, with representing that the products, when used as directed, will, among other things, reduce excessive hair fall-out, will cause growth of new hair on bald or balding scalps, will prevent, cure or reverse male pattern baldness, will produce combinations of these results, as more specifically hereinafter set forth, and that the products have been endorsed by a Finnish medical scientist as being capable of producing the aforesaid results.

In the Answers to the Complaints Respondent denied each allegation of the Complaints, and Respondent specifically denied (1) the making of each of the alleged representations and (2) the material falsity of them.

These cases were consolidated in order to obviate the necessity for repetition of testimony and pleadings.

On motion by Respondent the hearing was held in Atlanta, Georgia, November 10 through November 19, 1980. At the close of the hearing, Respondent requested that the record be kept open for 90 days to allow Respondent the opportunity to have 2,600 biopsy slides, which were said to be related to the proceeding, examined by a medical expert who was to prepare to give testimony about the slides. The motion was granted conditioned upon the restriction of Respondent's sale efforts to certain representations and solicitations that remittances be sent to certain addresses. (Order dated December 11, 1980) The testimony in regard to the biopsies was not produced.

Both parties submitted Proposed Findings of Fact, Conclusions of Law and Supporting Reasons, and Respondent filed a Rejoinder Brief which was received and docketed on July 12, 1981. Bio-Genesis, Bio-Prima II, Bio-Genesis Shampoo and Bio-Prima II Shampo

There follows a listing or representations (underscored) which are alleged by Complainant (1) to be made expressly or by implication by Respondent and (2) to be materially false. Each alleged representation is followed by excerpts from, or summaries of, portions of Respondent's advertising material which provide, or may have provided basis for the making of the particular charge to which the excerpts or summaries relate. The exhibits from which the language has been taken are cited. The quotations and summaries are illustrative, only, and they do not purport to be exhaustive of the possible sources. This form of presentation of the products will be followed with the other two product groups.

BIO-GENESIS

a. Bio-Genesis will prevent the hair loss and balding associated with hereditary tendency to baldness 02,12,54ExhibitA-44, p. 3Bio-Genesis is a perfect preventative measure fora man who is not yet balding, but has reason tofear, because of his family history, that hairloss will be a problem in his future.A-40People who are predisposed to baldness due toheredity can use Bio-Genesis to prevent the hairloss previously thought inevitable.

b. 80% of all bald or balding users of Bio-Genesis may expect, as a result of such use, to regrow hair 02,12,50Body ForumIn one study, 80% of all those treated regrewJuly '80,their hair with Bio-Genesis.p. 23A-21,Eight out of ten patients showed folliclerejuvenation after they had been treated.Hair follicles that had previously beenatrophied were now strong and healthy. ButDr. Setala and his associates didn't reallyneed a microscope to see that. Because 80%of those treated had regrown hair. That'sright, regrown hair, even in areas that hadbeen bald for over twenty years.

c. Bio-Genesis will cause growth of new hair on a bald or balding scalp 02,12,46A-52, p. 5Friends who use it rave about the greatresults as their hair loss stops and new$Bhair growth appears.A-4, p. 1Bio-Genesis produces a multiple beneficialaction to stimulate hair growth on baldingor bald scalps.

d. Cholesterol causes the formation of the male hormone, testosterone, and DHT in the scalp; and removal of cholesterol will result in growth of hair on the bald or balding scalp

e. Bio-Genesis will neutralize or remove cholesterol from the scalp 02,12,50ExhibitScientists and dermatologists alike havedetermined that the scalp is subject to the buildup of cholesterol. And cholesterol * * *is the "raw material" from which androgens(male hormones) are synthesized in the scalp.Body Forum BIO-GENESIS attacks the causes of baldnessSept. '80,in several ways. It loosens and softens thep. 14tissue surrounding the hair follicle makingfor better circulation in the scalp. This stimulates important germinating cells and clears the follicle of growth-chokingdebris. But most important, by breakingdown cholesterol before it can be convertedto DHT, BIO-GENESIS revives dormant hairfollicles.Body ForumDr. Setala was years ahead of otherJuly '80physicians by suggesting that cholesterolp. 23is the key ingredient in the synthesis ofmale hormones. So, he formulatedBio-Genesis to neutralize the cholesterollevel, hence, decreasing the hormonelevels. In addition to neutralizingcholesterol in the scalp, Bio-Genesis alsoclears the hair follicles of build-up,allowing hair to regrow to its normal state.

f. Bio-Genesis will cause regeneration of the hair follicle 02,12,56A-4, p. 2Bio-Genesis clears the way for the restimulatedhair follicle to regenerate completely.A-19Bio-Genesis's ability to break down cholesterollevels within the scalp tissues actually helpsthe follicle to regenerate.

g. Topically applied, Bio-Genesis will cause structural changes in the skin elements 02,06,50A-23It penetrates the dermis to affect structuralchanges within the various skin elements.

h. Dr. Kai Setala, A Finnish medical scientist, endorses the use of Bio-Genesis to achieve the results identified in paragraphs a through g above 02,12,38ExhibitA-4, p. 3Dr. Setala recommends Bio-Genesisunequivocally.

BIO-GENESIS SHAMPOO

a. BIO-GENESIS SHAMPOO promotes healthy normal hair growth for bald or balding persons.

b. BIO-GENESIS SHAMPOO will strengthen and enhance the capacity of Bio-Genesis to:

1. prevent the hair loss and balding associated with hereditary tendency to baldness;

2. cause the growth of new hair on a bald or balding scalp;

3. cause the regrowth of hair for 80% of all users of Bio-Genesis;

4. cause structural changes in the skin elements;

5. cause regeneration of the hair follicle.

c. Dr. Kai Setala, a Finnish medical scientist, endorses the use of BIO-GENESIS SHAMPOO to achieve the results identified in paragraphs a and b above. 02,12,50ExhibitsA-35, p. 2BODY FORUM: So that means the Bio-Genesisshampoo, because it does not contain suchsubstances [cholesterol, lanolin, alkali] issupporting the effect of the Bio-Genesis$Bformula?PUROLA: Exactly. Dr. Setala and Iformulated the Bio-Genesis Special Shampooto complement the action of Bio-GenesisLotion. Together they produce the bestresults. If either is used without theother, the results will not be as great.A-38, p. 2. . . they [Drs. Setala and Schreck-Purola]devised a two-step program: a shampoo thatcould reduce the presence of cholesterol andDHT, and a lotion that stimulates the hairfollicle. . . . The tandem effect of the lotion and shampoo regimen provides aneffective means of cleaning the hair andscalp (reducing cholesterol and DHT) withoutcausing irritation and promoting activity inthe hair follicle by means of the topicalintroduction of the proven patented formula.A-44, p. 3Bio-Genesis shampoo works effectively tostrengthen your topical Bio-Genesisapplication.

BIO-PRIMA II

a. 80% of all users whose baldness is hereditary or genetic may expect new hair growth as a result of using Bio-Prima II. 02,12,52B-4, p. 3One study showed that 80% of all thosetreated regrew hair from using Bio-Prima$BII. Every one of those cases suffered frompattern baldness, a malady which many hadpreviously thought irreversible.B-10, p. 4Bio-Prima II provides a totally newprognosis for pattern baldness. In recentclinical tests made by Dr. Setala 80 out of100 people have new hair growth as a resultof Bio-Prima II treatments.

b. Bio-Prima II prevents hair loss and balding. 02,11,48B-5, p. 8Bio-Prima II is a completely new deep porescalp cleanser effective for the preventionof thinning hair and excessive hair loss.

c. Bio-Prima II restores hair growth by metabolizing or removing cholesterol from the scalp 02,06,48B-16Bio-Prima II can reverse the balding patternbecause of its ability to neutralize scalplevels of cholesterol.

d. Bio-Prima II strengthens the hair fiber 02,12,46B-10, p. 7. . . Bio-Prima II strengthens the hairfiber. . . .

e. Dr. Kai Setala, a Finnish medical scientist, endorses the use of Bio-Prima II to achieve the results set forth in paragraphs a - c above 02,11,50B-7, pp.This exhibit is a pamphlet from Standard9, 15, 18Research Labs which indicates in many placesthat Dr. Kai Setala endorses Bio-Prima II.B-5, p. 8All preparations and products marketed underthe trademark BIO-PRIMA II are authenticatedby us, Dr. I. Schreck-Purola and ProfessorK. Setala, M.D. . . .

BIO-PRIMA II SHAMPOO

a. Bio-Prima II Shampoo increases the efficiency of Bio-Prima II in obtaining new hair growth from 80% of the users of Bio-Prima II whose baldness is hereditary or genetic.

b. Bio-Prima II Shampoo increases the efficiency of Bio-Prima II in preventing hair loss and balding.

c. Bio-Prima Shampoo increases the efficiency of Bio-Prima II in restoring hair growth by metabolizing or removing cholesterol from the scalp.

d. Bio-Prima II Shampoo increases the efficiency of Bio-Prima II for strengthening the hair fiber.

e. Dr. Kai Setala, a Finnish medical scientist, endorses the use of Bio-Prima II Shampoo for increasing the efficiency of Bio-Prima II in achieving the results set forth in paragraphs a - d above. 02,12,50ExhibitsB-7, p. 14Bio-Prima II "Special" Shampoo was developedby Drs. Setala and Schreck-Purola toincrease the efficiency of the Bio-Prima IIHair Lotion. . . . It is, therefore, recommended that Bio-Prima II Shampoo beused to obtain maximum benefit fromBio-Genesis [sic] Hair Lotion.B-9, p. 3The Bio-Prima II Shampoo (8 oz. bottle) isdesigned to work in conjunction withBio-Prima II. Its patented formula . . . allowsa special cleansing action that enhancesBio-Prima II's effects. Dr. Setala highlyrecommends its usage during the time ofBio-Prima II treatments.

The Witnesses

Postal Inspectors Michael Flynn and William F. Powers testified on behalf of Complainant in respect to certain investigative matters hereinafter more fully set forth. Complainant called as expert witnesses Dr. Sorrell Lee Schwartz, a Pharmacologist, who is Professor of Pharmacology at Georgetown University, Washington, D.C., and Chief Toxicologist for the National Capital Poison Center (Tr. 67-68); and Dr. Karl Jules Kramer, Miami, Florida, who is Board Certified in the fields of Internal Medicine and Dermatology. (Tr. 272) Articles which each of these witnesses have written, or to which they have substantially contributed, have been published in recognized, reputable professional journals which require peer review prior to the acceptance and publication of such articles. Curricula vitarum of both witnesses are found at C EX. U-2.

Respondent called as an expert witness Dr. Ilona Schreck-Purola, Espoo, Finland, a Doctor of Medicine and Surgery, licensed in Finland, who is Assistant Pathologist in the 1st Department of Pathology, University of Helsinki. Dr. Purola's curriculum vitae is Respondent's Exhibit 5. (Tr. 504) Respondent also called Dr. Rolf Nordstrom, Helsinki, Finland, a medical doctor in private practice in which he is principally engaged in different types of surgery for hair problems. Dr. Nordstrom's professional qualifications are stated at Tr. 571-572. Exhibit R-8 consists of a list of 28 articles written or contributed to by Dr. Nordstrom, of which some are in the Finnish language, but more than half of which relate to the hair and scalp. (Tr. 573, Additional qualifications of Dr. Nordstrom appear at Tr. 574, 576, 577-581) The next witness called by Respondent was Dr. Norbert Gollnick, Zantkup, Oldenburg, West Germany, a medical doctor who specializes in dermatology, allergies and venereal diseases. (Tr. 652-655) A list of Dr. Gollnick's writings is set forth in Exhibit R-2. Dr. Irwin I. Lubowe, New York, NY, Fellow, American Academy of Allergists, Diplomate, American Board of Dermatology and Syphilology, and Member, American Society of Pharmacology, was the next witness called by Respondent. (Tr. 745-6) Dr. Lubowe's curriculum vitae and a list of his writings are set forth in Exhibit R-21. Finally, three lay witnesses were called by Respondent, as follows: Peter G. Morrison, 32, financial consultant, of Washington, Iowa; Vincent N. Messina, 44, executive art director, Atlanta, Georgia; and Dante Ruccio, 45, hairdresser, of Newark, New Jersey. (Tr. 686, 693, 701)

FINDINGS OF FACT

BACKGROUND

The Investigation

1. Postal Inspector Michael Flynn at the time of hearing had been Complainant's principal investigator of Respondent's activities for just over a month, succeeding Inspector Gary Boxeth of the Special Investigations Division ("SID") in that assignment. (Tr. 26-27) Inspectors Boxeth and Flynn had prepared a chart (CX-1) showing, as to some seventy test names, (1) products ordered from Respondents, (2) issues of Body forum received, and (3) the receipt date in SID of various pieces of direct mail advertising sent to each test name. (Tr. 26-27, 47, 49) Each different direct mail piece ("DM # ") was assigned a number by the inspector and used to identify that advertisement on the outside envelope and on CX-1. (Tr. 33-34) For example, the test name Judd received DM #50 on August 28, #57 on August 20, 1980, and DM #62 on November 13, 1980. (Tr. 34, 52, 836, 838) Test name Porter, received DM #58 on October 6, 1980, along with Body Forum magazines for September through November 1980. (Tr. 36-38) Test name Selby received DM #50 on August 18, 1980 and #59 on October 10, 1980, plus Body Forum for June, July, and September through November 1980. (Tr. 38, 40) Test name O'Connor received DM #50 (Tr. 39), #57 on September 26 and November 13, 1980, along with Body Forum for June and October through December 1980 (Tr. 832-33); and test name Butters received DM #50 on August 25, #57 on October 2 and 9, and #62 on November 17, 1980, plus the August through December Body Forum. (Tr. 40, 836, 838) The direct mail pieces appear among the exhibits as follows: 02,05,46$GDM #Exhibit50K-8; Flynn 2-17-81 affid., Ex. 1, CX-1, p. 257G-18; Flynn 2-17-81 affid., Ex. 2, CX-1, p.258J-6; CX-1, p. 759A-59; CX-1, p. 262CX-17; Flynn 2-17-81 affid., Ex. 3

2. Mr. Flynn was unable to tell the date on which some of the above listed exhibits were received by the postmasters maintaining the test names. Exhibit A-59 was received October 8, 1980 in the test name O'Connor at Lake Jackson, Texas and in Mr. Flynn's office October 10, 1980 (Tr. 60, 62); and CX-17 was received by the Lutz, Florida postmaster on November 7, 1980 and 1 by Mr. Flynn on November 13, 1980.

3. Inspector Flynn's own experience and his review of Inspector Boxeth's records indicated that Body Forum magazine is generally received at the test name addresses during the first weke of the month preceding the issue date; that is, the April issue would be received early in March. (Tr. 188-89, 191-92) In the occasional case of delayed delivery, such as may occur around Christmas time, the magazine is sent by third-class bulk mail whose low delivery priority is made relatively even lower by the heavy seasonal volume of first-class and fourth-class parcel mail. (Tr. 461-462)

4. By affidavit filed February 20, 1981, Inspector Flynn testified about Braswell's solicitation of orders for affected hair products to post office boxes 1097, 1044, 50135 and 2481 in Deerfield Beach and Pompano Beach, Florida. Exhibit 7 of that affidavit is the same chart shown at CX-1 with new data added between the mid-November 1980 hearing and February 20, 1981. Mr. Flynn stated that five test names received a number of issues of Body Forum containing representations alleged to be false about 8 of Braswell's products. They also received between August 1980 and February 1981 two to six direct mail pieces that offer for sale those same products but do not expressly make the challenged representations. (Flynn affid. dtd. Feb. 20, 1981, pp. 3 and 4)

5. Mr. Flynn also testified that Respondent Standard Research Labs appears to have been created by Braswell and, at least insofar as setting up the latter's Florida post office boxes, appears to be acting as its agent and on its behalf (Flynn affidavit, pp. 5-7).

The Interview of Dr. Setala and Dr. Schreck-Purola

1. In June 1980, Postal Inspector William F. Powers interviewed Drs. Setala and Schreck-Purola in Finland in regard to the products Bio-Genesis and Bio-Prima II. Both interviewees appeared voluntarily and both were fluent in English. (Tr. 201) Both doctors had been connected with the University of Helsinki and Dr. Purola was still so connected at the time of the interview. In the early 1970's they had collaborated in research in regard to the growth of human hair. They indicated that they had developed or discovered a formula that did promote hair growth, but both of them emphatically stated that the substance did not affect male pattern baldness (MPB). The interviewees indicated that cholesterol blocks dormant follicles and causes them not to grow hair. They said that their product removes cholesterol from the scalp and allows the dormant hair follicles to grow hair in some cases. MPB is easily distinguished from excessive hair loss, but everyone loses hair at a certain rate. Some people lose hair at a more rapid rate than others do, but Dr. Schreck-Purola said that Bioscal would decrease the excessive rate of loss in certain cases. The results of their studies had been issued in a report written by them, but their report, so far as they knew, had not been published in any medical or scientific journal (Tr. 209-211).

2. Doctors Setala and Schreck-Purola obtained a Finnish patent on the product they developed, but they no longer hold that patent. The world marketing rights were sold to a West German Company named Bioscal located in Flensburg. Upon comparing the labels of Bio-Genesis and Bio-Prima with the contents of their product, the doctors said they are substantially the same, there being only two minor differences. (Tr. 212-215)

3. During the course of the interview a copy of an advertisement for Bio-Genesis taken from page 4 of the June 10, 1980, issue of The Star Newspaper was shown to Drs. Setala and Schreck-Purola. (Ex. C-4; Tr. 215-216) Dr. Setala was asked to indicate language in the advertisement which he would question as to truthfulness and accuracy. Generally, he eliminated or changed, with a blue marker, anything suggesting a cure for MPB, and he removed his name wherever it appeared in the advertisement. (Tr. 218; Ex. CX-4) After making the foregoing changes, Dr. Setala signed and dated the advertisement.

4. Some notes by Inspector Powers as to points discussed at the interview (CX-12) are as follows:

(a) Dr. Schreck-Purola identified "sorbimacrogal stearate 300" as polyoxyaethylene sorbitan monostearate. That ingredient was stated to produce a change in the growth stage of hair follicles when topically applied. Biotin is an active ingredient in the preparation used by Drs. Setala and Schreck-Purola. Both individuals identified biotin as Vitamin H. Another active ingredient in the product was identified as nicotinic acid which is claimed to enhance blood circulation. (CX-12, p. 3)

(b) Both doctors steadfastly denied that they ever agreed to endorse or sponsor or contribute to the advertising of the product in the United States. (CX-12, p. 3)

(c) ***Both doctors advised that they have never claimed that their product would cure baldness. Dr. Schreck-Purola stated that she believes the product will definitely decrease the rate of loss of hair and might stop excessive hair loss in certain cases. She was quick to elaborate that the product should be used before someone begins to experience excessive hair loss, when it would definitely increase the chances of being effective. Also, both doctors repeatedly mentioned that the product would enhance the growth of hair but not cure baldness. They thought that, when used in the very beginning of hair loss, it might prevent excessive loss. (CX-12, p. 4)

(d) While hair growth from a dormant hair follicle can be caused by their product, it will not help anyone already suffering from excessive hair loss; it will not have any effect on dead hair follicles; it will not act as a cure for baldness, and if it is advertised as such, it is being misrepresented. (CX-12, p. 5)

5. At the close of the interview Dr. Setala was shown a number of advertisements (Ex. C-5 through C-10) and he was asked to comment with respect to them. (Tr. 220-222) He indicated that because of the number of advertisements and because of previous appointments he would like to comment, in writing rather than orally, at greater length in regard to certain matters, some of which are only peripherally related to the issues in this proceeding. (Tr. 226-227) On July 16, 1980, Dr. Setala did write a nine-page letter to Inspector Powers setting forth his views on certain matters. (CX-14) In pertinent part, the letter (1) underscored the fact that Drs. Setala and Schreck-Purola did not ever claim in their scientific writings to treat "bald" people or to "cure baldness"; (2) the "open letter from Professor Kai Setala, M.D. and Ilona Schreck-Purola, M.D." which appeared in Body Forum (p. 4 of CX-10) is false in that the doctors neither wrote nor authorized the writing of the letter; the claimed interview of Dr. Setala by Louis Rinaldi, which appeared in Body Forum (CX-9, pp. 3-5) is false in that Dr. Setala never gave this alleged interview and, in fact, Dr. Setala does not know a Louis Rinaldi. (CX-14)

6. It is interesting to note that Respondent published a story (CX-9, pp. 3-5) in which it is said that "Bio-Genesis, the Setala formula, and the only U.S. trade name for Bioscal, is available now for the first time, in this country." Finally, in his letter Dr. Setala specifically denied the report in CX-8, that either he or Dr. Purola has ever written that they have, or that either of them has, developed a cure for baldness that is "effective in restoring hair in 80% of all patients treated". (CX-14, p. 7)

7. On cross-examination, Inspector Powers identified a document captioned "Interview Questions Re: Bio-Genesis and Bio-Prima II, Drs. Kai Setala and Ilona Schreck-Purola (Ex. R-1) and a four-page document bearing the initials WFP, 6/16/80 in the top left-hand corner (Ex. R-2). Both of these documents contain handwritten notes made by Inspector Powers at the time of the interview of Drs. Setala and Schreck-Purola. Insofar as they are pertinent and material, Ex R-1 and R-2 support Inspector Power's testimony concerning that interview (Tr. 238-269).

The letter

1. Exhibit C-14 consists of excerpts from the letter mentioned above, dated July 16, 1980, from Dr. Kai Setala, Helsinki, Finland, to Postal Inspector W. G. Powers. As received in evidence, this exhibit contains the following historical information:

"About 10 years ago Dr. Schreck-Purola and [Dr.] Setala developed a hair preparation and a shampoo. The former product was called 'Bioscal Original Hair Preparation', the latter 'Bioscal Shampoo'. In Finland, the company Oy Suomen Bioscal Ab, SF - 00100 Helsinki 10, the rights belong to the company Bioscal GmbH (changed later to Bioscalin GmbH), D-239 Flensburg, Alter Kupfermuhlenweg 100.

* * *

"Bioscalin GmbH has in addition the rights of marketing the products e.g. to USA. However, in case this company carries out marketing utilizing our names and our results, it must in advance show us the text of the advertisement.* * *

"Bioscalin GmbH told us [Drs. Schreck-Purola and Setala] that the company some years ago made an agreement with Mr. Bar-Tur concerning marketing of the said preparations in the USA.

* * *

"It is to be underlined here that we never utilized the words 'bald' vs. 'baldness' vs. 'cure of baldness' in our scientific articles."

* * *

2. In the report of the development of the above hair preparation and shampoo, it is stated that the products when tested on the skin in 1974 (a) did not produce any adverse results; that they inhibited (b) excessive hair loss and (c) accumulation or retention of immature keratin scales [dandruff] on the cutaneous surface of the scalp, and (d), in addition to (b) and (c), initiated a regeneration of the hair growth in about 60% of the subjects who had treated the scalp skin with the preparation continuously 6-12 months once or twice a day. (Ex. C-3, p. 32) With regard to the Bio-Genesis and Bio-Prima II products, Respondent relied on this 1974 report. (Res. Br., p. 7)

3. In 1978, Drs. Setala and Schreck-Purola, reported on a further study in which they had been joined by Bjorn Lindroos, B.So., and Rolf E. A. Nordstrom, M.D. This study initially comprised more than 350 adult male volunteers. For a variety of reasons over 50% of these volunteers were excluded. After this preliminary screening, about 250 (sic) subjects remained. The series was further reduced when histological examination of the specimens revealed that the scalp biopsy was inadequate in any way. The final series comprised 167 subjects. The series was then divided into two groups. Group I was intended for evaluation of the general mode of hair growth - whether mosaic or wave-like. The mode of progression of the excessive hair loss was determined partly on physical examination, and partly on the test subjects personal opinions. In group II, 24 subjects were treated topically on the scalp with the Setala/Purola formulation, in which one of the most active ingredients is sorbimacrogal stearate 300, for a period of 9 months. The effect of the therapy was followed by means of serial biopsies in which the growth of the hair both outwards and also into the dermal interior was evaluated. The sum of the growth in both directions was regarded as the real hair growth. They 1978 study included the patterned removal, at about three-month intervals, of biopsies from the scalp of some fo the subjects, slicing the biopsies into 5-micrometer sections, mounting every 5th section on microscopic slides and comparing the conditions therein revealed with other, but similar, biopsies taken after different intervals of treatment within the overall 9 months with the Setala-Purola products. (Ex. C-2, pp. 5-6) Among the conclusions reached in this experiment were the following:

A. In males, hair growth is in principle synchronized, and not mosaic as claimed before. * (Ex. C-2, p. 32)

B. In assessing this [A, above] and related problems, it is imperative to examine numerous biopsy specimens simultaneously removed from several difference scalp regions, and on several successive occasions. Examination of only 2, 3, or 9 scalp biopsies does not necessarily guarantee reliable results. (Ex. C-2, p. 33)

C. It is in principle possible to stimulate the growth of hair follicles. (Ex. Cx-2, p. 34)

D. When applied to the cutaneous surface, the preparation rapidly penetrates the epidermis proper and enters the area surrounding the hair follicles. A high rate of cell division is induced both in the epidermis and in the hair follicles. Because of the preparation's detergent effects remnants of keratin and dust particles are removed from the follicular mouths. Because it decreases the viscosity of intracellular fluids, it stimulates blood and lymph circulation. (Ex. C-2, p. 35)

E. The preparation removes any excess of cholesterol and other oily compounds from the cutaneous surface.

F. Earlier it was believed that the male sex hormones (androgens) are produced exclusively in the testes. Now, however, it is known that the human skin, with its sebaceous glands and hair follicles, is itself an important site for the biosynthesis of androgens. Thus, cholesterol - when synthesized in the human skin - is metabolized in situs in the scalp to androgens; consequently if androgens are responsible for MPB (sometimes even termed "androgenous baldness"), the cholesterol formed in the skin must also be responsible for the condition. (Ex. C-2, p. 35)

G. In part II [of the study] the behavior of hair growth was followed during a period of 9 months while the 24 test subjects treated the balding/bald area of the scalp topically with the hair preparation. It appeared that in 89% of the 13 statistically representative cases, hair follicle growth in the treated area increased. Although the absolute number of hair follicles within the fully haired occipital area was naturally higher, the hair follicles within the treated balding/bald areas of the scalp showed clear signs of growth. (Ex. C-2, p. 40)

* This claim is modified somewhat at Ex. C-2, p. 28, when it is stated that "hair growth pattern in man is not necessarily mosaic***." (emphasis supplied)

The Testimony of Dr. Schwartz

1. Dr. Schwartz defined pharmacology as the study of drugs. It is the study of drugs from the viewpoint of their mechanism of action, their fate in the body and their use as therapeutic agents; it includes toxicology, clinical pharmacology and veterinary clinical pharmacology. (Tr. 68)

2. The design of a method of testing the efficacy of a product for human use and consumption is a complicated procedure because of the number of variables that must be considered. First, there must be a theory; the theory must be tested; and if it is validated, it must be subjected to valid clinical trials. (Tr. 95) Tests with animals must be conducted first before tests are performed using human subjects. The most important variable in testing with humans is the variation in test subjects in such matters as age, sex, environmental differences, and various degrees of unconscious and innocent bias, or expectation. The substance to be tested must be administered in such a way that the people who receive the test material and those who do not receive the test material can not determine which group gets which substance. The most accurate test and the one which is widely accepted is the double-blind, in which the persons measuring the subjects' responses, as well as the subjects themselves, do not know which group of subjects is getting the test material. (Tr. 77-79)

3. In certain tests self-reporting by test subjects as to compliance with the regimen and as to the results obtained is a necessity. In such situations the self-reporting must be controlled at such a level that the subject is following a precise set of instructions. Since self-reporting is subjective, it is avoided when possible since subjective reporting is used only when there is no objective measurement to use. (Tr. 81-82)

4. Prior to the hearing Dr. Schwartz had become familiar with typical examples of the advertising matter for, and with the ingredients of, Bio-Genesis and Bio-Prima II, the ingredients of which the parties had stipulated to be identical in formulation. Also prior to the hearing he had conducted a search of the scientific literature to determine whether any of the ingredients which are the subject of this and the related proceedings have ever been, either singly or in combination, found to be capable of promoting the growth of hair on bald heads or in bald areas of the head. he also checked to see whether certain papers cited in the Setala reports (CX-2) and CX-3), and another paper, contained the statements attributed to them in the Setala reports and elsewhere. (Tr. 84-86)

5. A search employing the system known as Med-Line, in use at National Library of Medicine, and the Citation Index brought forth no support in the scientific literature for the proposition that the ingredients of Bio-Genesis or Bio-Prima II and of the other products which are the subjects of these proceedings would case hair growth. Complainant's Exhibits 2 and 3, being Dr. Setala's and Dr. Purola's reports of their studies, of course support the theory, but these reports are not listed in the retrievable scientific literature. (Tr. 86-88) A cosmetic preparation probably would not be written up in a scientific journal (Tr. 168) but because of the claimed ability of these products to cause cell growth, they are drugs and not cosmetics. (Tr. 148, 168)

6. The 1978 report (CX-2) is "not by any means" a report of a valid clinical study for the following reasons:

a. The definitions of the questions to be resolved by the study are diffuse and imprecise;

b. The paper is so written that the investigators' preconceived notions as to what is going to happen are so interspersed with factual statements that it is impossible to separate the notions from what actually happened;

c. There is no foundation that demonstrates the validity of the statistical method by which it was determined that there was increased growth of hair;

d. Assuming that the pathology slides look exactly as the paper indicates they do, they are without significance;

e. There is no discussion of randomization procedures or the frequency of self-administration of the test substance;

f. Pathological changes, some of which were hyperplastic responses or increased cell division, occurred which can induce various indications, including precarcinogenic responses;

g. The paper clearly indicates a conscious (not used in the pejorative sense) bias; and

h. The basic theory - that removing cholesterol from the membrane will stimulate hair growth - is described by the witness in terms that make it clear that the theory is utterly devoid of credible support. (Tr. 90-980

i. The findings presented in the study have no statistical significance because there is no control group. (Tr. 180)

7. With respect to the 1974 study (CX-3), it must be stated at the outset that the material being tested is not identified. No reputable journals will accept the discussion of a new substance unless it is identified. Code names and the like are impermissible. Further, the 1974 paper is subject to the same infirmities as are found in the 1978 pape. It is not a report of a controlled clinical trial; it is almost anecdotal in its reportorial form; there is no support for the stated conclusions; and as the report, itself, states in regard to "Re-generation of hair growth" (CX-3, p. 23) "the present test period is thus too short." (Tr. 100-102)

8. With respect to both the 1974 and the 1978 papers there was no sound theoretical basis for the exercise conducted which led to the issuance of CX-2 and CX-3. Even if such a theoretical basis did exist, the steps taken as reported in CX-2 and CX-3 would not constitute valid clinical trials. (Tr. 102)

9. Dr. Schwartz found no evidence that Bio-Genesis and Bio-Prima II will prevent hair loss and balding associated with hereditary tendencies to baldness; he found no evidence that these products will cause the growth of new hair on a bald or balding scalp; and he found no evidence to support the proposition that these products would cause regeneration of the hair follicles. (Tr. 105)

10. The absence from Med-Line of supporting data for the claim of efficacy of a substance is proof of the falsity of the claim. (Tr. 142) Med-Line searches the foreign, as well as the United States, scientific literature. (Tr. 142)

11. Because of the claimed biological and pharmacologic activity of Bio-Genesis and Bio-Prima II, these products are by definition drugs and not cosmetics. (Tr. 148, 182) Claims that include increased cell growth and converting follicles that were in the resting stage into the growth phase (Tr. 166) and unsupported in the scientific literature.

12. In the 1978 Setala/Purola study, Dr. Nordstrom, a surgeon, examined the subjects and determined that they had male pattern baldness. The test involved taking biopsies of various areas of the scalp of a group of people, both before and after a certain amount of unmonitored application of Respondent's products to the scalps of the subjects. It does no good to find, using this evaluation technique, that the study reflects statistically significant results if the evaluation technique, itself, is not valid or is of questionable validity. Both prior to and since the Setala/Purola tests there is no reference in the scientific literature to the use of the biopsy technique used in their tests and, in fact, the authors state in the report that they invented it. (Tr. 155, 159; CX-2, p. 3, last complt. para.)

The Testimony of Dr. Kramer

1. About 15 percent of the patients Dr. Kramer sees in a week in his practice as a dermatologist have complaints related to hair or scalp problems. Dr. Kramer keeps himself currently aware in the file of dermatology by reviewing the major dermatologic journals, most of which are published monthly; he attends rounds at the Dermatology Department, University of Miami for two or three hours each Wednesday, on one of which days each month he also attends a research conference; for several months each year he is attending physician in the Dermatology Clinic at Jackson Memorial Hospital; he attends monthly meetings of the Miami Dermatological Society, at which times cases are presented and discussed for a full afternoon; he attends one or two national dermatological meetings each year at which new developments are discussed. (Tr. 273-274)

2. The living part of the hair is called the hair follicle and it is in this structure that cells are alive, reproduce, and the cells themselves form or transform eventually into the dead, inert product on top of our heads commonly referred to as hair. From the dermatologist's point of view, the hair follicle is the real hair. (Tr. 278)

3. There is a generally accepted cycle in which the hair grows. Specifically one can follow a single hair follicle through several stages, and every hair follicle in humans goes through these stages. The first stage is referred to as anagen. During the anagen phase the hair follicle is growing and producing hair. In humans this stage lasts approximately four years, although there is a lot of individual variation. After this period of anagen or growth, there is a period of degeneration in a particular hair follicle during which time the hair is transformed into the resting state. The transition period is referred to as catagen. Finally, after the hair goes through this cycle or this stage, it comes into what is called the resting state, and the resting state is referred to as telogen. The resting state for the human scalp hair lasts approximately four months. After that four-month period, the hair follicle again begins to grow a new hair, and the old hair falls out. In the human, approximately 50 to 100 hairs will fall out during the course of the average day, and that is a perfectly normal number. There are approximately 100,000 hairs on the human scalp, of which approximately 80 to 90 per cent are in a growing state, and the remainder are in a resting state at any one time. (Tr. 278-279)

4. The accepted pattern of human hair growth is called asynchronous or mosaic. This means that the hairs on the scalp are randomly distributed between the growing stage and the resting stage. By contrast, in certain animals, particularly laboratory animals, all the hairs on the animal may grow at the same time. Then they all begin to rest at the same time and when they start to regrow --this particular animal will lose all its hair so that the phenomenon referred to as shedding would be a manifestation of the synchrony of the cycle of all the hair follicles in these animals. This, however, to the best of present medical knowledge, does not occur in humans, except under certain pathologic or abnormal circumstances.

5. Although there are peculiarities and specificities of the protein or amino acid content of hair, there is no special need for certain nutrients specific to the hair. Amino acids are small molecules which are the building blocks of all the protein materials in the body, and there are probably over 20 amino acids. Many of those amino acids are metabolized or changed by the human organism from one kind of amino acid to another kind. There are, however, seven amino acids which the body requires from external sources, or through the diet, because the body can not produce or synthesize them. on the other hand, hair problems or symptoms which are the only result or manifestation of a nutritional deficiency and which occur in the absence of some other disease are exceedingly rare in the United States population. (Tr. 282-284)

6. Excessive hair loss (EHL) is the loss of hair in excess of the normal 50 to 100 hairs per day. Baldness is the actual, visible absence of hair on the scalp. There can be a variety of causes for both conditions. The most common cause of EHL is called telogen effluvium. Any situation that can severely shock the human organism can change the usually asynchronous hair follicle cycle into a synchronous cycle. Some examples of such situations are childbirth, certain medications, severe emotional stress, scalp surgery, and hair transplantations. When these situations occur, it is possible that telogen effluvium will ensue. If so, most of the hair will rest for approximately four months, after which time the hair will begin to grow again, causing the old hairs to be forced out in unusual numbers by the growth of new hairs. In due time, the new hair will replace the old, and the normal loss rate will resume.

7. Baldness is sometimes caused by a condition known as alopecia areata in which randomly spaced bald spots may appear. Baldness may be caused, also, by various infections and certain illnesses and some drugs. By all odds, however, the most common thing that one experiences as baldness is MPB. (Tr. 284-6)

8. MPB is more accurately referred to in medical parlance as androgenetica, or androgenic, baldness. It is a hereditary disease that may progress for 10 to 40 years. It requires a genetic predisposition plus circulating levels of androgens or male hormones. (Tr. 287, 395, 401) Adding "age" to these conditions adds very little because the required level of testosterone does not occur until puberty. One cannot with certainty predict male pattern baldness merely by looking before it occurs. (Tr. 395) It may occur in women, usually after menopause, owing not to a change in the level of testosterone but to a reduced level of estrogen. (Tr. 398)

9. The mechanism seems to be that both men and women have testosterone or other androgens, primarily testosterone, circulating in the blood stream. Certain genetically predetermined hair follicles are able to metabolize, or to change testosterone into a super mail hormone, which is called dihydrotestosterone (hereinafter DHT). DHT, which is produced right in these hair follicles, seems to cause the eventual destruction of the hair follicle. To the best of current medical understanding, the hair follicles that are genetically predetermined to self-destruct are able to produce larger amounts of DHT than the hair follicles which are never lost, even in bald men. These are the hair follicles in the back of the scalp, or in the occpital region, which are not able to produce this super male hormone. (Tr. 288-289) Thus, castration before puberty will effectively prevent baldness, and castration during the course of balding will halt its progress. However, castration will not result in reversal of the balding process or in the regrowth of any significant amount of hair. (Tr. 287-288, 403) Dandruff or excessive oiliness was thought 30 years ago to be a cause of baldness or excessive hair loss, but that belief is not accepted today. Severe scalp conditions such as seborrheic dermatitis and psoriasis may rarely cause hair loss that is reversible with treatment of the condition. (Tr. 291-292) Androgenic baldness is progressive but at rates that may be highly irregular over time in any individual. There may also be another kind of baldness superimposed on androgenic baldness in the same person. Telogen effluvium caused perhaps by a severe automobile accident may, after four months, appear to the person as if his androgenic baldness is accelerating rapidly. Again, however, most of the hairs lost as a result of the telogen effluvium will return over the next few months. (Tr. 289-290) Patients' self-reports on the course of hair loss, although never wholly dismissed, are taken only with great caution and should not be relied upon. This is especially so when the condition observed is as irregular in progression as male pattern baldness. (Tr. 290-291)

10. Dr. Kramer conducted a search in a number of ways, including the use of Index Medicus, on a number of subjects including hair, hair growth, treatments for baldness, and information pertinent to the specific products and substances in the instant and related products which are putatively claimed to grow hair. Studies that he examined included those involving humans and some others involving animals. In regard to the latter, the texts he consulted cautioned that when one is evaluating a loss of hair or hair-growing preparations, one essentially must dismiss any results based upon growing hair on any animal other than man. The reason for this precaution is that it is well known that there are numerous stresses which will cause hair loss in animals which will not do so in humans. In addition, there is a variety of substances which, when rubbed on animals that that have lost their hair, will grow hair on those animals, but those substances will not grow hair when they are applied to the human scalp. Hence, any conclusions of the efficacy of hair-growing preparations in humans based on animal studies are essentially spurious in nature. The product of Dr. Kramer's search of the scientific literature confirmed his opinion that there is no effective treatment for MPB. (Tr. 292-295) The only contrary information was the information supplied to him by representatives of the Complainant and this information included Complainant's Exhibits 2 and 3, and the 1974 and 1978 Setala/Schreck-Purola studies, some advertisements and some other written articles.

11. Dr. Kramer had examined a number of Respondent's advertisements for the four products presently under consideration. Some of these claims, for example from C EX B-5, p. 5, are that Bio-Prima II is an effective preparation for use in treating and preventing MPB which, by definition, indicates that the preparation is a medication or a drug. In CX A-22, it is indicated that cholesterol is "the key ingredient to the synthesis of male hormones," much of which "takes place in the skin." It is then stated that "Dr. Setala reasons that by reducing the cholesterol present in the scalp, hormone levels would also decrease." Dr. Kramer said with regard to the foregoing statements that while testosterone is changed (metabolized) in the scalp into DHT and other androgens, in all of the textbooks and references he consulted it is clearly stated that cholesterol is synthesized into testosterone and other androgenic clones in only three tissues of the body --the testes in males, the ovaries in females, and in the adrenal glands of both sexes. He concluded on this point by saying: "There is absolutely no evidence whatsoever that cholesterol *** directly leads to the production of any androgenic or male hormone in the hair follicle or the scalp tissue or in any other tissue in humans other than the tissues that I just described. I think that this is just a false statement." (Tr. 294-302) Therefore, removing cholesterol from the scalp has no effect on testosterone. (Tr. 318)

12. The parties agreed that the formulations of Bio-Genesis and Bio-Prima II are identical. Dr. Kramer identified the ingredients of Bio-Genesis (CX A-1-B and B-2) and he stated what the action, if any, of each is, with the exception of an ingredient called "Bio-concentrate (Germany)." (Bio-concentrate (Germany) was identified by Dr. Purola as a "Vitamin mix." (Tr. 553) The sorbimacrogal stearate 300 which is referred to in the eighth line, page 6, of the 1978 report as "one of the most active ingredients" of the Finnish product, and, hence, of Bio-Genesis and Bio-Prima II, is the same as polysorbate 60, also known as Tween 60 and other commercial names, and it is an emulsifier that is freely available in the cosmetics industry. (Tr. 321) In his search of the literature he saw nothing that would give any validity to the claim that the product's ingredients, singly or in combination, if applied topically would have any effect on hair growth. (Tr. 302-304)

13. Dr. Kramer saw in the advertisements mentioned above, and in others, statements concerning studies about hair growth conducted by Dr. Setala and Dr. Schreck-Purola. He identified Complainant's Exhibits 2 and 3 as being the studies to which he referred. In regard to the 1974 study, he mentioned the large number of studies in which a variety of detergents and other substances were applied to rats, mice and other animals over a many-year period. There are photographs of biopsies showing changes within animal skin. Another part of the study using detergents, and particularly the Bio-Genesis formula on both human volunteers and animals, showed that no untoward effects were produced. A small part of this study dealt with the results of trials of what he called this "hair-growing or whatever" preparation in humans. One problem was that it was an uncontrolled study, the results of which were determined by questionnaires which the patients themselves filled out. There was a smaller number of patients who allegedly were more carefully observed by the physicians in charge of the study. He said, however, that "by no stretch of the imagination" could the human studies for the hair-growing preparation "have any claim to being a valid scientific study." (Tr. 304-307)

14. Dr. Kramer described a valid scientific study as being one that is a double-blind controlled study in which the objective is defined, the participants must be chosen, they must be controlled, and in the case of a test of a product claimed to grow hair, the two groups - test and control - must be comparable in the degree of baldness, age and other characteristics. The preparations given to each of the two groups would have to look alike, and neither the physician administering the preparation or the patients themselves would be able to determine which group is getting the "active preparation" and which is getting the inactive or placebo preparation. Next, it must be decided how one is going to evaluate whether or not something grows hair. The end point of that hair preparation has to be that it grow hair and it does snot matter what a biopsy shows or what one sees under the scalp if it does not grow visible, long hair on the scalp because that is really what is sought to be learned. Finally, one would have to do a scientifically valid statistical evaluation of the results. It is very important in a good scientific paper that anyone reading it is able to go through it and determine what the experimenters did and what they were trying to do. (Tr. 307-311)

15. Dr. Kramer also read the 1978 Setala/Purola study and found it complicated to read, with a great deal of biopsy data, graphs, charts and so forth. As far as its relevance to the matter presently under consideration is concerned, and that is whether a certain preparation will grow hair, the only relevant part of this study consists of a group of 24 patients who were treated with this particular preparation over a nine-month or 12-month period of time. All the other information in this tudy, including, among other items, that related to the 167 patients, bears no relationship to efficacy studies of this particular preparation. Just looking at those 24 patients and the way the information was handled would absolutely invalidate any conclusions whatsoever that could possibly be drawn as to the efficacy of this particular preparation for a very simple reason. They treated this group of 24 patients over a period of between nine and 12 months. Then what they did, which flies in the face of any valid scientific technique, was that they eliminated 11 of those 24 patients. Their excuse for eliminating those patients from further consideration is that the statistical data were not enough, or were inadequate. There is no one who would evaluate a drug study who could possibly eliminate essentially half of the patients he tested and draw any valid conclusions from the other half of the patients. This is a crucially important point. In this study the decrease in the number of participants was from 350 to 250, to 67, to 24 (who were actually treated with the product), to only 13 who are reported in the results. This study does "absolutely not" represent any valid scientific evidence in support of the proposition that the products in question will grow hair on the scalps of bald men. (Tr. 311-313)

16. Other serious deficiencies of the 1978 study include (1) the use of multiple scalp biopsies as an attempt to provide a quantitative measure of human hair growth, when there has been no validation of the procedure; (2) the "discovery" that hair growth is synchonous rather than mosaic most probably results from the methods used because the multiple biopsies taken at three-month intervals shocked all the hairs in the affected locations into the resting stage, as described in Dr. Kramer's earlier testimony dealing with telogen effluvium: an (3) the results reported in CX-2 cast a great deal of doubt on the method the experimenters used, and if the method used is not any good, then one can not attribute scientific validity to the result. (Tr. 313-316)

17. Finally, Dr. Kramer referred to page 35 of CX-2 where the authors speak of cholesterol synthesizing, or being synthesized into, testosterone. The authors of the report cite a number of references in notes 40-49, several of which references were written by persons known to Dr. Kramer as being associated with the Department of Dermatology at the University of Miami. All of those references are directed to the idea that testosterone is metabolized in the scalp. Testosterone is changed to dihydrotestosterone in the scalp but nowhere in those references is there any evidence, nor is the statement made, that cholesterol is directly changed into any androgenic hormone in the scalp. This is the basis for this entire study, and it is fallacious. Hence, removing cholesterol from the scalp have no effect on testosterone. (Tr. 317-318) Further deficiencies of the 1978 study are located on Table II on page 16 as follows:

(1) Case No. 113 is shown to be 20 years old and age 20 is also shown to be the age at which he started to lose hair. In the next column it is indicated that the patient had been losing hair for 19 of his 20 years before he noticed he was becoming bald. The next column shows him to be a Type VI, which means that he is really quite bald. The figure in the next column shows the 20 year old subject to have been losing hair for 24 years.

(2) Case No. 112 is a patient who is age 20. The age at the onset of hair loss is age 18. On the other hand, it says that the duration of hair loss before involution of male-pattern baldness is 18 years, so he has been losing hair for 18 years, and the duration of hair loss before the first biopsy was 20 years. Here there is a 20-year-old man, and it is claimed that he has been losing hair for the first 20 years of his life.

These, and other similar instances, including the 20-year-old male who had been losing hair for 24 years before he had his first biopsy, served further to destroy any claim that the 1978 paper constituted the report of a scientifically valid controlled study. (Tr. 318-320)

18. Dr. Kramer stated that the 1974 and 1978 studies did not prove that the test product does not work. What he said was that neither of the studies contains any evidence to prove or support the claim that the product will produce the results stated in the advertisements. The standard to be applied to establish the efficacy of a treatment agent such as a drug is that the drug must be both safe and effective, and the method by which these factors are established is by controlled, repetitive, reconfirmed studies of the type previously described by Dr. Kramer. The 1974/1978 Setala/Schreck-Purola studies do not provide a basis for any conclusions in respect to the efficacy of Bio-Genesis and Bio-Prima II. (Tr. 323-325)

19. Based on his research and on discussions with respected members of his profession, it is Dr. Kramer's opinion that Bio-Genesis and Bio-Prima II will not produce the results indicated in the representations allegedly made by Respondent in its advertisements related to these products with the exceptions that (1) they might remove cholesterol from the hair, but they would not neutralize the cholesterol, and (2) insofar as there is concerned the charge that the product "will cause structural changes in the skin elements" (Bio-Genesis, chng. g.; Bio-Prima II, chg. b. 4.) the charge is so vague as to make it uncertain what is meant, but it is possible that the scalp might become irritated. If so, it might be said in that sense to cause a structural change in the skin. (Tr. 325-326)

20. With respect to Bio-Genesis Shampoo and Bio-Priam II Shampoo, there was also a stipulation that, except for the names, the products are identical. (Tr. 326; CX A-1-A and B-1) Dr. Kramer identified and described the action, if any, of each of the listed ingredients. The detergent in the product does not have a positive or negative charge and it is of a class commonly found in shampoo preparations. (Tr. 327-329) Bio-Prima II will not strengthen the hair product and it will not metabolize cholesterol in the scalp. It might remove cholesterol from the scalp. (Tr. 330)

21. Dr. Kramer stated that he found no support for the proposition that the shampoo products mentioned above will produce the results stated in the representations alleged to be made by Respondent in respect to those products. It is his opinion that those products will not perform in accordance with those representations. (Tr. 328-330)

22. Dr. Kramer's published articles do not deal with hair growth, hair restoration, baldness or anti-baldness remedies. He has conducted no studies on any of the products involved in these and the related proceedings. He has reviewed no controlled studies by other scientific investigators of the involved products. (Tr. 382-383) In fact, he stated that his review of the scientific literature, produced no such studies. (Tr. 292-295) On the other hand, he found nothing that indicated that Bio-Genesis and Bio-Prima II either will or will not work. (Tr. 386-387)

23. The factors involved in MPB are genetic predisposition, availability of an adequate level of testosterone or other androgenic hormones, and, perhaps, age, although this latter factor may be subsumed under "genetic predisposition." Females can have MPB, generally after menopause, in which there is a change in the female's chemical make-up. Female testosterone levels ordinarily do not change, but female-like hormones are no longer produced in large quantities. If Bio-Genesis, contrary to fact, prevented the testosterone to DHT, it probably would be an effective treatment or preventative for MPB. (Tr. 399)

24. The only time at which MPB can be diagnosed is after the condition manifests itself in the patterned loss of hair. Dr. Kramer uses some of the ingredients of Bio-Genesis in his practice, e.g. polysorbate 60, but it serves only as an emulsifier. (Tr. 396-397)

25. It would require one and one-half, to two years to do a scientifically, controlled, double-blind study to determine whether a substance is an effective treatment for MPB, although such a study would be relatively easy to do. It would take three or four years to get approval of regulatory agencies, but the scientific community would accept it in less time. (Tr. 414-417) There is no acceptable scientific proof that Bio-Genesis or Bio-Prima II work, but the lack of articles proving or substantiating the efficacy of a product does not prove to Dr. Kramer that the product does not work. (Tr. 421, 422)

The Testimony of Dr. Schreck-Purola

1. Dr. Purola narrated more details of her professional experience, most of which relate to the hair and scalp. (Tr. 504-509) The doctor's attention was directed to the 1974 study she conducted with Dr. Kai Setala (CX-3). The study insofar as it involved humans began with the selection of volunteers, of whom there were 173. These men were examined to determine whether they had early baldness and a history of baldness in the family. The effect of a hair preparation called Bioscal (same ingredients as Bio-Genesis, Tr. 518) was to be determined by its effect on (1) dandruff, (2) hair loss and (3) possible increase of the growing of hair. The volunteers reported their views as to whether they had more or less hair and they also reported their own observations as to whether they had more or less dandruff on their scalp, neck and shoulders on those days when the person had not shampooed their hair. About once a month it was a laboratory assistant or the doctor who made the observations. Every person recorded his own observations on a card which he maintained and kept in his possession. Several photographs were taken of 41 of the subjects. The same photographer took all the pictures, but he did not use the same camera each time. The preparation used on the volunteers was comprised of the same ingredients as those used in Bio-Genesis. The volunteers were instructed to use the preparation "once or twice a day." (Tr. 513-519)

2. The 41 subjects who were photographed came to the doctor's office "regularly every two or three months." There was not enough money available to include all the volunteers in the study, so each of the other 132 relied on the notes which he himself made of his own condition. Each counted the hairs on his pillow the first thing in the morning, on his comb when he combed his hair during the day, and in the wash basin when he washed his hair. He estimated the number of hairs lost, and a loss of over 120 in a 24-hour period would be excessive. The volunteers kept records at first on a daily basis, later on a weekly basis, and when the excessive hair loss diminished, they stopped counting. (Tr. 519-521)

3. The 41 volunteers who came to the pathology department on a monthly basis in the 1974 study were men whose baldness was diagnosed by Dr. Purola as MPB. Dr. Purola made a mark of about one square centimeter on a plastic hood worn by the volunteer, and she then made an estimation of the number of hairs in that particular area at the time of each visit. Based on (1) records kept by the patients and reported to the doctors, (2) Dr. Purola's personal observations and (3) photographs appearing on page 25 of CX-3, Dr. Purola stated that in a 6-weeks period in May-April 1974, there was short, new hair on the subject of those photographs and she said, also, that there appear some longer hairs in the anagen stage. (Tr. 521-524) Similar testimony was elicited in regard to photographs appearing on pages 26 and 27 of RX-7. (Tr. 525-528 Doctors Setala and Schreck-Purola concluded as a result of the study that the product is safe, that it is possible to provoke new hair growth, and that the loss of hair diminished. (Tr. 524, 529, 532)

4. Another test employed in the 1978 study involved biopsies taken at three four-month periods. Dr. Purola said that "all these eight cases" [in which biopsies were compared] showed definite regrowth of hair follicle activity. (Tr. 534-535) The Bioscal Company in Germany, to which Drs. Purola and Setala sold the patent on the product, acquired the right to use their names in conjunction with the results of the tests. (Tr. 535-536)

5. Dr. Purola stated that there was no control group used in the 1974 study because it is a known fact throughout the medical world thus far that there is no substance that can have any effect on the progressive nature of MPB. (Tr. 544) The volunteers were told that the product presented a possibility of increasing the growth of hair, that it might lessen the loss of hair and that it would alleviate a dandruff condition. There is no way of knowing with certainty that the patients kept accurate records. (Tr. 545)

6. Dr. Purola acknowledged that between the photographs in Figures 15a and 15b in RX-7 there is a difference in the lighting, the camera, hair-styling, and grooming, and there are some similar differences in the photographs which appear as Figures 18a and 18b. (Tr. 545-552)

7. Biotin is one of the ingredients of Bio-Genesis, according to Dr. Purola, because, taken internally, it is needed in the growth of hair for the function of cells. In this product there is a substance which acts as a carrier to take the biotin into the cellular structure even though it is topically applied. Dr. Purola knew of no study to support the last statement insofar as it relates to humans, but Dr. Setala has reached the conclusion that, using a vehicle referred to by Dr. Purola as "wine", biotin penetrates the skin and goes into the cells of mice. (Tr. 556-557) Biotin is more fully discussed in the section of this decision which deals with products of which biotin is said to be a "principal" ingredient. The evidence applicable to biotin in the next section of this decision is equally the products in this section.

8. Dr. Purola's doctor's dissertation, which was a study published in a Finnish publication, Acta Radiology, contains the conclusion that Polysorbate-60 increases mitosis, or cell reproduction, in animals. (Tr. 557)

9. Despite the fact that Dr. Purola recognizes that it is widely recognized that MPB is irreversible and can not be cured, she, nevertheless, stated that it is her unqualified opinion, based on the studies she described in her testimony, that the use of Bio-Genesis would either cure or reverse the progress of that condition, and she stated that she had discussed the subject with the head of the Dermatological Department at Helsinki University. (Tr. 560) After making the foregoing statement, however, she said that Bio-Genesis would not "completely" or "absolutely" cure the condition; it will stop it; in certain cases, regrowth of new hair has been proved; if used early in baldness or on a young person, "it may help". (Tr. 561, 563, 566) Dr. Purola cited particularly a young man of twenty whom she treated, in "her personal opinion" effectively, with the Setala formula. (Tr. 564-65) Although she did not identify the proof of regrowth of hair, she indicated that the 1978 study "gives further evidence" of it. (Tr. 562)

10. Dr. Purola said that her opinion of the efficacy of the preparation was not generally shared by other physicians and dermatologists, the sole partial exception being Germany where "social med-care" in some cases pays for the treatment. (Tr. 568-69)

The Testimony of Dr. Nordstrom

1. Dr. Nordstrom agreed with Dr. Kramer's testimony that hereditary baldness is the product of genetics, normal levels of testosterone, and age sufficient to produce the necessary hormones. The condition is irreversible as indicated by the balding man's failure to regrow hair after castration. (Tr. 582, 583)

2. Dr. Nordstrom's testimony covered principally the design and conduct of the 1978 study of the Setala preparation (Tr. 618), for which Dr. Setala had asked him to locate subjects (called "volunteers" by the witness) and to do the biopsies. (Tr. 585, 594) He said that he selected twenty-four of his patients with male pattern baldness too advanced for "hair reconstructive surgery" as a sufficient number to be treated with the test substance. (Tr. 586, 624-25) Eleven of the 24 subjects were dropped from the study due to problems with motivation, local adverse effect of the biopsy procedure, or lack of uniformity in the procedure. (Tr. 626) The volunteers were told that the test substance might influence hair growth in a positive way after some months or years, if any results at all would appear. (Tr. 635) They were instructed to use the preparation once or twice a day, a variance that Dr. Nordstrom agreed might affect the results. (Tr. 636)

3. Dr. Nordstrom described the biopsy procedure and indicated the location of serially done biopsies on RX-17. (Tr. 594-95) The distance between the first and second biopsy was about 4 cm; between the second and third, about 3 cm; and between the third and fourth, about 3 cm. The time intervals between biopsies were three months, three months, and six to nine months, respectively. (Tr. 616) It was intended to repeat the procedure and to record the data at the taking of each biopsy, but this was not always done. (Tr. 608) Although the design called for 3 biopsies to be taken on 4 separate occasions from each of the 24 volunteers, or a total of 288 biopsies, only 123 biopsies were actually reported as taken. (1978 study, p. 11, P1; Tr. 628) Even for the 13 test subjects remaining in the study, some biopsies were omitted. Only 9 to (or 75% to 80%) were taken from each. (Tr. 628-29)

4. Dr. Nordstrom said that it is his opinion that Bio-Genesis has an effect in that it reverses MPB to some extent. (Tr. 620) There is no study, so far as he is aware, that shows a positive effect on MPB with any product, but he said that the information derived from this study shows a very high probability of a positive result with this product. (Tr. 650) He knows of no other study in which the biopsy technique has been used to measure hair growth, but some parts of the technique have been used in other types of studies that have been published. His agreement with the conclusions reached in the 1978 study are based on his clinical judgment and not on the analysis of the biopsies. (Tr. 633-640) He has seen no complete cure of MPB which he can attribute to the Setala/Purola product and he does not use that product in treating any of his patients. To have achieved more impressive results, the study should have continued much longer. (Tr. 642-646)

5. If the 1974 or 1978 study had been published in a recognized medical journal or listed in Index Medicus, he would know of it. Neither study has been so published or accepted for publication or listed. (Tr. 636-637) If a product should be formulated which would bring about the reversal or the arrest of MPB, it would be so popular in the medical field that journals would ask to be permitted to publish the report of such a finding. (Tr. 648)

The Testimony of Dr. Gollnick

1. Dr. Gollnick said that he has treated over 300 cases of alopecia androgenetica, which is the term used in Germany for MPB. In his treatment of these patients the treatment has included the use of Bioscalin with 38 patients. (Tr. 656-657, 680) When a new patient comes to him for treatment of hair loss or baldness, he does a complete medical history, followed by a complete physical examination. He does a blood test in which he checks for cholesterol and the entire fat content of the blood. He asks about the patient's dietary habits, the cosmetics used and he then examines for infections in the body. (Tr. 657-661)

2. Dr. Gollnick learned for Bioscalin in 1976 and when he then began to use it he had a success rate of about 55 per cent. Later, taking aspects of nutrition into account he achieved an approximate 80 per cent success rate. (Tr. 661-663) His measure of "success rate" involves looking at the patient and seeing how the hair grows, its composition, how it feels, whether it is shiny, and a primary determinant is the reaction and comment of the patient. (Tr. 676, 727-728)

3. Dr. Gollnick gave brief summaries of 8 of his patients he treated for baldness. In connection with his narration of the treatment of these patients, he mentioned the fact that they suffered with various illness, for example: Arens-hypertension; Bocker-Tonsillitis and dental problems; Eilers - gall bladder problems, weakness of circulation, allergy to pollen, and presumably, tonsillitis, since the tonsils were removed during the course of the treatment; Lippisch - Dr. Gollnick had Lippisch's tonsils removed, "But X-ray pictures showed that he had a dental problem." (Tr. 674-680)

4. Dr. Gollnick stated that if a person has a hair problem or a disease, one must determine the focus [of the infection or other malaisel] within his body first and diagnose this; and there is a large number of such inhibiting factors." (Tr. 662) He said, also: "We must recognize that a medicine can not *** help by itself, but that all other impediments have to be eliminated." (Tr. 660) When Dr. Gollnick was asked whether the total of 38 cases, including those summarized, represented his experience with Bioscalin in MPB cases, he demonstrated his faith in his arsenal of therapeutic procedures by answering: "Yes. Using, in addition, my own methods." (Tr. 680)

5. Dr. Gollnick has not used double-blind tests for the past four or five years. He said that he has used no control group because his vast experience makes it unnecessary for him to do so. Because of this experience, however, he knows how to administer these tests (but see pp. 721-722). In any event, he said, a control group would be required only for internally administered drugs - not externally, or topically, administered drugs. He declined to state or define the pharmacological activity of Bioscalin. (Tr. 724-727)

The Testimony of Messrs. Morrison, Messina and Ruccio

1. Respondent also introduced the testimony of lay witnesses who testified with respect to personal experience with Bio-Genesis and its effectiveness. The witnesses and their statements are summarized as follows:

(a) Peter Morrison found that the use of the product caused a substantial decrease in hair loss (Tr. 689), and also discovered the growth of new hair which he had not seen before in an area in which he had not recognized earlier hair growth. (Tr. 689-690) Mr. Morrison also attributed a substantially thicker growth of hair to Bio-Genesis. (Tr. 690)

(b) Victor Messina testified, that after using several bottles of Bio-Genesis, he found that his amount of hair loss was diminished. (Tr. 695) After 6 months' experience with Bio-Genesis, Mr. Messina noticed a marked difference in hair fall, and, in addition, noticed new hair growing on his scalp. (Tr. 695) The newly grown hair is now covering the crown of his head and the rear center portion of the scalp. (Tr. 696) In Mr. Messina's experience, no other product produced the results which he obtained from Bio-Genesis. (Tr. 697)

(c) Dante Ruccio testified that he has been diagnosed as suffering from "male pattern baldness - alopecia areata ***." (Tr. 701) Mr. Ruccio, at the time of the hearing, had used Bio-Genesis for about thirteen months. (Tr. 703) Prior to that time, he had used a number of remedies in attempts to cure his baldness. However, he had no success with any other product. On the other hand, Mr. Ruccio has found Bio-Genesis to be effective and he is starting to get his hair back. (Tr. 704-706)

Other Biotin Products LB-49, BIO-NC36, Biotin Gel, Biotein H-3 and Biotein H-3 With Nuclein Acid

The Alleged Misrepresentations

LB-49

a. Topical application of LB-49 will reduce excessive loss of hair due to male pattern baldness. 02,12,54ExhibitsBody ForumIn a recent study involving 300 subjects, agesAug. '8020 to 60, with a one to ten year history ofp. 22hair loss, some very impressive statistics cameto light. LB-49 was able to reduce hair fall outand regenerate new hair growth in 40% of allcases.A-20, p. 5After treatment with LB-49, hair loss was reducedin subjects whose fathers and grandfathers hadmale pattern baldness.

b. Topical application of LB-49, will generate new hair growth on the bald or balding scalp. 02,06,54C-4It's a totally unique topically applied solutionthat has been shown to reduce excessive levels ofhair fall out and regenerate new hair growth.C-3Headline: New Formula Grows Hair On Bald Heads

c. Topical application of LB-49 will prevent testosterone accumulation on the scalp. 02,06,58C-6LB-49 was formulated with an androgen fightingagent to reverse testosterone accumulation on the scalp.

d. Topically applied, LB-49 will penetrate the scalp tissue and hair follicle to neutralize DHT. 02,11,52C-2, p. 4In addition to the potent anti-androgeningredient, LB-49 contains a unique penetratingagent to insure that the anti-hair loss$Bingredients in LB-49 are absorbed through the skin and penetrate the scalp.

BIO-NC36 (tablet and liquid form)

a. BIO-NC36 will cause the regrowth of hair on a bald or balding scalp. 02,10,56ExhibitsE-2Headline: The formula for new hair growth.Text: It could very well be the answer to yourhair loss problem.E-6BIO-NC36. THE EXTRA-STRENGTH BIOTIN COMBINATIONTO START NEW HAIR GROWTH. The message in the text is that BIO-NC36 will cause regrowth of hair.

b. BIO-NC36 will reverse male pattern baldness. 02,12,54Body ForumModern medical research has discovered three ofJuly '80the ingredients most beneficial to hair growth.p. 11And they are now available in a concentratedformula developed to reverse male pattern bald-ness. This fabulous new formula is called Bio-NC36.E-7BIOTIN, NIACIN, AND CYSTINE --NEW CONCENTRATEDFORMULA DEVELOPED TO REVERSE MALE PATTERNBALDNESS.

c. BIO-NC36 will stop excessive hair loss, and prevent hair fall out. 02,05,52E-2By combining niacin and cystine with an alreadypotent biotin solution, Bio-NC36 provides astimulus that other biotin lotions can't. Itcould very well be the answer to your hair lossproblem.E-7BIOTIN, NIACIN AND CYSTINE --NEW CONCENTRATEDFORMULA DEVELOPED TO REVERSE MALE PATTERNBALDNESS.

d. Cystine and Niacin are integral and essential parts of BIO-NC36, when ingested or applied topically will make a significant contribution to achieving the results identified in a, b, and c. 02,12,54Body ForumNiacin is important to hair growth because ofSept. '80,its role as a vasodilator. . . .Cystine is thep. 35single most important amino acid in stimulatinghair growth.E-3, p. 2When carried by dimethylacidamide to insurepenetrability, Biotin is clearly effective notonly in treating hair loss but actually stimu-lating new growth in living but unproductive haircells.

e. The Biotin contained in BIO-NC36 will cause the growth of new hair on a bald or balding scalp. 02,12,54E-13, p. 3Then some scientist discovered that topical appli-cation emulsions containing the co-enzyme biotin(a B complex vitamin) could control and evenreverse male pattern balding.E-17, p. 3By combining cystine and niacin with biton, astimulus to hair growth is provided that's notavailable in traditional biotin formulations.

BIOTIN GEL

a. Topical application of BIOTIN GEL will stop excessive hair loss. 02,11,54ExhibitsD-5, p. 5Extensive case studies have proven topical biotinpreparations have an 89% success rate in stoppingexcessive hair fallout in men afflicted withpattern baldness.

b. Topical application of BIOTIN GEL causes the growth of new hair on the bald or balding scalp. 02,05,50D-6Dermatologist confirms Biotin regenerates hairgrowth.

c. Topical application of BIOTIN GEL will diminish the length of the normal dormant phase of hair growth. 02,05,54D-6If your hair is only "sleeping," Biotin Gel willwake it up, and you'll be on your way to the mostfabulous head of hair you can possibly have]

d. Most individuals are deficient in biotin. 02,05,54D-7Although Biotin exists freely in many foodsubstances, most individuals have an insufficientsupply.

e. Topical application of BIOTIN GEL will significantly reduce excessive hair loss. 02,05,50D-6 *** Biotin brought excessive hair loss undercontrol in 9 out of 10 cases]

BIOTEIN H-3

a. The use of Biotin H-3 will reduce testosterone build-up on the scalp and enable hair to grow again. 02,10,52Exhibits F-2Applied topically, Biotein in H-3 is able topenetrate the scalp and neutralize harmfultestosterone build-up . . . reactivate dormantfollicles and actually stimulate new growth.

b. The use of Biotein H-3 will stop excessive hair loss. 02,05,56F-3Now we'd like to tell you how to use Biotein H-3in order to best realize its effectiveness inregenerating new hair growth and stopping hairfall out.

c. Testosterone is produced at the scalp. 02,05,56F-6. . . much male pattern baldness is the result ofover-production in the male hormone testosteroneright on the scalp.

d. Topical application of Biotein H-3 will prevent DHT accumulation on the scalp. 02,05,54F-6Applied topically, Biotein H-3 has the fortunateability to penetrate the scalp's surface coatingand go deep into hair follicles, where itneutralizes hairchoking DHT.

BIOTEIN H-3 with NUCLEIC ACID

a. Topical application of Biotein H-3 with Nucleic Acid will cause growth of new hair on the bald or balding scalp.

b. Biotein H-3 with Nucleic Acid will stop and reverse hereditary baldness. 02,11,52ExhibitsH-7, p. 2The product acts as a stimulus to hair growth,providing the spark to get dormant hair rootsproducing again.H-8Finally, there's Biotein H-3 with Nucleic Acid.It contains biotin proven effective in reducinghair fallout and even regenerating new growth.And to further enhance biotin's effectiveness,there's a full complement of nucleic acid toprovide the spark needed for hair growth.

c. Topical application of Biotein H-3 with Nuclein Acid will neutralize the excessive build-up of male hormones in the scalp. 02,12,56ExhibitsBody ForumBiotein H-3 with Nucleic Acid negates the effectAug. '80of Dht, so hair can begin growing again.p. 6H-3The product is effective in neutralizing the baldness-inducing effects of the male hormonetestosterone.

d. Nucleic Acid stimulates hair follicles to grow new hair on the bald or balding scalp. 02,12,54Body Forum Nucleic Acids (genetic material) rejuvenate Aug. 80 and stimulate hair follicles into hair growth.p. 6

FINDINGS OF FACT

The Testimony of Dr. Schwartz

1. Because Respondent's chief witness with respect to the products in this group was Dr. Lubowe, who designed the formula for LB-49 and who uses it in his practice, the attention will be focused primarily on that product. The testimony and the comments will be applicable to all of the above products, however, since the principal ingredient in all of them is biotin (Pre-Hrg. Conf. Tr., pp. 41-42, 47-48).

2. Dr. Schwartz was familiar with the advertising materials and the ingredients of all the products in this group. He conducted a search of the scientific literature in an effort to locate evidence as to the effect the ingredients, taken singly or in combination, would have on hair loss or hair growth. With respect to LB-49, he found nothing that would indicate that the product would bring about hair growth, or that it would reduce excessive hair loss due to male pattern baldness. The product, so far as the scientific literature is concerned, contains no anti-androgen substance, and topical application of it will not prevent testosterone accumulation on the scalp. (Tr. 106-111) There is no scientific basis for the proposition that biotin, ingested or topically applied, generates new hair growth in cases of male pattern baldness (Tr. 111). There is no basis in the literature for the proposition that Biotin Gel will diminish the normal length of the growth phase of hair (Tr. 117). There is no basis in the scientific literature that either niacin or cystine, taken internally or applied topically, contributes to hair growth or to stopping hair fallout (Tr. 114, 115). The scientific literature is devoid of any indication that Biotin H-3 with Nucleic Acid will stop or reverse hereditary baldness, neutralize the accumulation of male hormones in the scalp, or stimulate hair follicles to grow new hair on a bald scalp (Tr. 122).

The Testimony of Dr. Kramer

1. Biotin is a vitamin or a chemical which is necessary for the functioning of living cells. There are two sources of biotin. Once is through the diet. The other is that there are certain bacteria which live in the human gastro-intestinal tract, which also produce biotin. A large percentage, if not a sufficient daily quantity, is produced by these bacteria. A biotin deficiency is very rare in the human, but it has been produced experimentally in the past by feeding patients large quantities of egg whites. Egg whites contain a substance called avidin which combines with biotin and renders it unavailable to the human organism. For the average person no such thing as biotin deficiency exists. A biotin deficiency has not been associated with male pattern baldness. In his search of the literature, he found no evidence that biotin helps to promote hair growth. Inquiries among his colleagues also failed to lead to any valid scientific studies supporting the use of biotin for arrest or reversal of excessive hair loss accompanying male pattern baldness. (Tr. 342-344)

2. One paper that he was aware of was a study of the use of biotin in stopping male pattern baldness by Edward Settel. It is not a valid clinical study because, by the admission of the author in the article, it is a preliminary study. It is stated that the results are incomplete, and, while the results are encouraging, more research is needed. The results postulated in Settel's study have not been confirmed. In this study, two preparations were used to treat both excessive hair loss and male pattern baldness. One was a female-like hormone for which it was claimed that rubbing it on the head would prevent both conditions. Adverse symptoms resulting from the use of this remedy included the enlargement of the breasts of the male patients. The basic problem with the Settel study was that it was not a double-blind, controlled scientific study. The numerical results presented were presented in such a way that they had no statistical significance. In addition, it was claimed that a special emulsion was used which increased the penetration of some of the substances in the preparation; the experimenters used a special shampoo; and, without a control group it is conceivable that measures used, other than the biotin, contributed to the results (Tr. 345-346).

3. Referring to C EX C-2, an article entitled "Conquering the Threat of Baldness" by Irwin I. Lubowe, M.D., Dr. Kramer said that it does "absolutely not" meet the criteria required of a valid controlled study. He did not even characterize it as a study, but as a conversational discussion of how Dr. Lubowe treats MPB and what he finds as his results. Some of the defects of the exercise conducted and described by Dr. Lubowe are: there is no way to determine what is excessive hair loss; the report is of a totally uncontrolled test; the treatment is a very specialized one with particular high-protein diets, special shampoos, vitamin supplements, a pre-treatment physical examination, and a variety of laboratory tests. Dr. Lubowe apparently feels that his treatment will reduce EHL and that it will prevent and treat MPB, but nowhere does he give or cite any convincing scientific evidence to substantiate his believe. (Tr. 349-350)

4. Dr. Kramer conducted a search of scientific literature to determine whether there was any evidence to support a claim that LB-49, Bio NC-36, Biotin Gel, Biotein H-3 or Biotein H-3 with nucleic acid are effective in preventing hair loss or in reversing MPB. He could find no support for any of these products as being effective in the treatment of EHL or MPB. It is his opinion that none of these preparations would be effective when used for such purposes. Further, none of the ingredients of the five biotin products under consideration could cause a hair in the telogen stage to change quickly to the anagen stage. (Tr. 351-354) Neither ingestion of Bio-NC-36 tablets or topical application of Bio NC-36 liquid will have any effect whatever on hair growth or the prevention of hair loss. (Tr. 355-356) Niacin rubbed onto the scalp might cause vaso-cilation and, thus, produce a temporary redness of the scalp. If so, that would have no effect on hair growth because lack of hair or hair growth has nothing to do with the local blood supply to the scalp. (Tr. 356) Biotin H-3 has no ingredient which, alone or together with the other ingredients, will reduce testosterone build-up on the scalp. There is no scientific evidence that testosterone is produced on the scalp. Dr. Kramer has seen no scientific or non-scientific evidence that the ingredients of Biotein H-3, taken singly or in combination, would prevent the accumulation of HDT in the scalp. The topical application to the scalp of nucleic acids such as those comprising Biotein H-3 with Nucleic Acids would have no effect on the scalp or on hair growth for two reasons: (1) it has not been established that these ingredients would penetrate the scalp and (2) even if they did penetrate the scalp, they would not affect the scalp or hair growth. (Tr. 357-358)

The Testimony of Dr. Lubowe

1. Dermatology was defined by Dr. Lubowe as the study of diagnosis and treatment of disorders and disorders of the skin and hair. he defined pharmacology as the study of "various new drugs that are used in the material medica and their special function, and also a study of their toxic attributes." He said that since he was board certified as a dermotologist in 1956, patients having disorders or diseases of the hair and scalp constitute forty percent of his patients and the remaining sixty percent have skin disorders. he sees between 40 to 60 patients a week. His curriculum vitae is RX-21. (Tr. 746-748)

2. The basic and most important cause of hair loss is the secretion of testosterone which is converted to DHT, resulting in MPB and female pattern baldness (FPB). Other causes of hair loss are diseases of the scalp, diminished function of the thyroid gland, and alopecia areata (hair loss at random spots on the scalp). The hair loss most often seen is MPB, which he has no difficulty in diagnosing. (Tr. 748-749)

3. The cause of MPB is the overproduction of male hormone known as androgen or testosterone. This produces the effect of the growth of the hair follicle, or hair bulb, and so the hair is lost. The enzyme reductase acts on testosterone and converts it to dyhyrotestosterone, which must be present to produce the hair loss. (Tr. 751-752)

4. Biotin was defined as a member of the B-complex and it is occasionally known as Vitamin H. It is manufactured in small doses in the intestine of the human being. It is found in some foods and it is synthesized in the intestinal tract from vitamins and amin acids. There are "not too many" foods rich in biotin; biotin is usually difficult to obtain; and, based on his experience and the experience of the medical profession, together with various medical reports, there is "not too much" biotin - in fact very small amounts - found when the blood is studied by chemical analysis. When asked whether biotin is essential he said "It's not --It's considered of a minute essentiality. It doesn't figure in the physiology of the human being." On the other hand, there may be patients with infection of the sebaceous glands of the scalp for whom large quantities of biotin may be prescribed to be taken internally. The substance causing the infection, known as avidin, is neutralized and the scalp condition clears. (Tr. 753-754)

5. Dr. Lubowe has known about biotin for approximately 10 years, and in a book on hair care he wrote about 15 years ago, he mentioned the use of biotin. He has used for about five years a preparation of his own design containing 1 per cent biotin and 1 per cent keratin and made of carbopol 640 which produces a fine thin gel which is easily absorbed when rubbed into the scalp. It does no leave any residue and it thickens the hair. He has used this preparation on about 500 patients. (Tr. 754-755)

6. When a new patients comes to see him Dr. Lubowe does a medical history on him. This history is very important because hair loss may be affected by the general health of the body. He also gives the new patient a physical examination, including checks of the heart beat, urine, blood pressure, body masses, weight and other matters. If the patient complains of hair loss, he has the patient sit at a table with a white towel or sheet of paper in fornt of him. Dr. Lubowe next combs the hair 50 strokes on both sides of the head and then the number of hairs that have fallen are counted. If more than 50 hairs fall during a 24-hours period, that is considered excessive. The normal loss is 25-50 hairs per day. He tells the patients not to use a hot blower or dryer, or a hair brush. The patient is told to use a comb with widely spaced teeth and to use it very gently. Women are told not to use any rollers, bleaches or dyes. (Tr. 756-758)

7. The patients are then given instruction sheets. These records are very important because they give an evaluation by the patient of the hairs that are lost during the three weeks before the next office visit. The patient's figures are noted on an office record. The patient is told that he is not to shampoo his hair for five days before he combs it, either at home or in the office. If the patient should shampoo his hair ont he same day he combed it, most of the hair that would fall would fall out during the shampoo, so he advises waiting five days before the hair fallout is counted. he estimates that 80 to 90 percent of his patients follow his instructions. (Tr. 758-759)

8. On the occasion of the first visit the patient is examined for anemia and hypothyroidism and, if either is present, he is given either an iron or liver dietary supplement. next, the causation of the disorder or disease is discussed and it is suggested that he use the biotin gel topically. Patients are told, also, that they may not see any improvement for from six to eight months and that they must be motivated. They are instructed to use the biotin gel, which, incidentally, is comprised of the same ingredients as are contained in LB-49. Dr. Lubowe applies it to the scalp and demonstrates and explains how they are to use it twice per day. Also, they are advised to use a special shampoo once or twice a week depending on the oiliness of the scalp. The shampoo, alone, would not cure MPB, but some of the protein in the shampoo is absorbed into the hair shaft, which becomes thicker and smoother. When the patient comes back for the monthly visit, Dr. Lubowe again combs the hair and notes the state of the health of the hair and scalp. (Tr. 761-764)

9. Dr. Lubowe sees patients of all ages who have MPB. It may occur at age 15 or at age 50. The longer the condition has been present, the more difficult it is to see positive results. The best results are obtained when patients between the ages of 20 to 30, especially those who have lost hair for only one or two years. In that group, after six to eight months hair fall of Over 100 per day is brought down to within a normal of 25 to 50 per day. It takes longer to get positive results with patients who are over 30 years of age, but such results are obtained. (Tr. 765)

10. With the 20-30 year age group, if the EHL is stopped in six to eight months, in another three to six months those patients notice hair regrowth. This is not vellus hair, but it is hair that is from one to three inches long and of the same pigmentation as the other hairs of the scalp. Dr. Lubowe's testimony on this point, i.e., with reference to reduction of EHL and arrest and reversal of MPB is predicated on his clinical experience. (Tr. 766-768)

11. Dr. Lubowe identified the ingredients of LB-49, Biotein H-3, Biotein H-3 with Nucleic Acid, Bio NC-36, and Biotein Gel, and stated the function each ingredient serves. (Tr. 768-775) He is aware of other medical doctors who utilize biotin for the treatment of MPB. There is an organization in New York City called the Pilo Genic Corporation, 250 West 57th Street, which is headed by a Dr. Settel. Dr. Settel licenses 30 organizations headed by dermatologists or physicians throughout the country to treat patients with MPB and to distribute his pilogenic lotion which contains one percent biotin. Dr. Settel had written an article entitled "Control of Excessive Hair Loss Through Topical Enzyme Therapy," which article was presented in October 1976, in Boton, MA, at The Scientific Assembly of the American Academy of Family Physicians. Dr. Lubowe was present at that meeting. Dr. Lubowe has spoken with Dr. Settel on several occasions on matters relating to the use of biotin therapy for MPB. The results obtained by Dr. Lubowe and by Dr. Settel are quite similar. Dr. Settel's successful results in visible hair growth were said to be as follows: ages 17 to 30 - 74 percent; ages 31 to 40 - 69 percent. In regard to reduction of EHL, Dr. Settel reported 89 percent success with the biotin study. (Tr. 783-786)

12. Dr. Lubowe stated that: biotin acts as an anti-androgen, which is to say that it metabolizes or neutralizes the testosterone in the scalp; if HDT is metabolized and therefore is not present, the hair fall will diminish to a normal fall out rate; and if DHT is neutralized, in a certain percentage of the population there will be regrowth if the earlier hair loss was not too great. Dr. Lubowe's success rate was again said to be greatest with those patients between the ages of 20 adn 30. (Tr. 786)

13. Concerning certain specific ones of the biotin products, additional parts of Dr. Lubowe's testimony are summarized as follows:

Biotin Gel. It will decrease hair fall since it contains polysorbate 60, biotin and carbomer, which helps penetrate the scalp tissues. The product will bring the telogen phase of the hair growth cycle to the androgen phase more rapidly, and it will, therefore, shorten the "dormant" phase. Biotin deficiency is not uncommon in the human because if there were enough biotin in the body it would act as an anti-androgen and this would prevent hair fall and it would "also stop hair growth" (The last four words probably should read "also promote hair growth.") He said this product will significantly reduce excessive hair loss. (Tr. 789-790)

Bio NC-36. This product will reduce hair fallout to 25-50 hairs per day, which he said is the normal hair fall rate. This product would be effective in reversing MPB. The use, together, of the cream and liquid versions of the product would be more effective than the use of either singly. (Tr. 790-793)

Biotein H-3 with Nucleic Acid. Biotin is the "active ingredient" in Biotein H-3. (Tr. 770) This product would be helpful in (1) producing new hair growth and (2) reversing MPB. The same percentages of age groups that would be benefited would apply as have been previously stated. The product would neutralize testosterone and reduce excessive testosterone in the scalp. Once the anti-androgen effect of the product is diminished and the RNA and the DNA are added there would be a more rapid cell growth.

LB-49. The testimony given with respect to previous biotin-containing products is applicable to this product. LB-49 contains a penetrant, methyl acetamide, which would help bring the biotin into the deeper tissue of the scalp and thus reduce MPB. It neutralizes DHT. (Tr. 795-796)

Biotein H-3. The testimony given in regard to Biotein H-3 with Nucleic Acid is applicable to this product, except that there is no nucleic acid in this product. (Tr. 796-797)

14. On cross-examination Dr. Lubowe repeated that biotin is an anti-androgen. In support of this statement, he cited the Settel report (Ex. R-22), which appeared in the October 1977 issue of the publication Drug and Cosmetic Industry, although the witness said that the report appeared in the July 1976 issue of Medical World News, no copy of which was available at the hearing. In andy event, Dr. Lubowe was aware of no other Settel study. The Settel study was not a controlled study. While he said Medical World News is a reputable medical journal, it is a giveaway published by McGraw-Hill and distributed nationally to the physicians of the American Medical Association. When asked whether the medical community generally considers biotin to be anti-androgenic he said he could not give that opinion for the medical profession, but the doctors in Dr. Settel's group are of that opinion. These doctors get their information from Dr. Settel, the head of the Pilo Genic Institute. Dr. Settel is a family practitioner and he is neither a dermatologist, a pharmacologist, nor a research chemist or biologist. (Tr. 801-803)

15. Asked whether his testimony in this proceeding is in conformity with the consensus of informed medical opinion, he said: "Well, I don't have any opinions of the medical profession. What I'm concerned with here today is my opinion." (Tr. 804)

16. Dr. Lubowe uses only one of Respondent's products and that is LB-49, although he is an honorary member of the Editorial Board of Respondent's publication Body Forum. (Tr. 824-825) He developed this product for Cosvetic Laboratories. When asked whether the "LB" stands for Lubowe he first answered "I don't know," but added "I believe so." (Tr. 805) There should have been no doubt as to the answer to the question in view of the statements in an article by Dr. Irwin I. Lubowe, M.D. on page 34 of the January 1980 issue of Body Forum in which the writer said:

"As a consequence, I developed my own special formulation for use in the treatment of patients with male pattern baldness. I call if LB 49 because it is a result of my 49 years in the practice of dermatology; a time during which I have treated literally thousands of patients with male pattern baldness. LB 49 is an advanced topical water-soluble gel that contains a specific anti-androgen ingredient, the same ingredient used by the physician I have referred to above, but in LB 49 this ingredient is more potent and penetrating. In addition to the potent anti-androgen ingredient, LB 49 contains a unique prenetrating agent to insure that the anti-hair loss ingredients in LB 49 are absorbed through the skin and penetrate the scalp." (Comp. Ex. C-2, p. 4).

17. A few cases of biotin deficiency in humans have been reported and the symptom of this condition was seborrheic dermatitis. In all reported cases except those produced in a laboratory or metabolic ward, the biotin deficiency has been due to the eating or large amounts of raw egg whites. It was suggested then that, unless a person has a peculiar diet and eats large amounts of egg whites, the possibility of a biotin deficiency is remote. To this suggestion the witness replied that biotin is not available in large amounts in dietary supplements and, therefore, there may be deficiencies that are not manifest on the skin, but which may manifest themselves by male pattern baldness. The use of the word "may" indicates a large area of doubt and speculation, particularly since no support was stated or cired for that proposition. (Tr. 805-806)

18. Dr. Lubowe has a problem identifying the place or places in the body at which testosterone is produced. At one time (Tr. 811) he said that it is "produced in the testes and the adrenal glands, and they migrate through the circulation through all parts of the body and into the scalp." Shortly thereafter (Tr. 812) he was asked whether he agreed or disagreed "with the view that testosterone is produced in the hair follicles in the scalp." His answer was short and direct - "I agree with it."

19. Dr. Lubowe stated that lanolin contains cholesterol, and he agrees with those who say that cholesterol in the scalp produces testosterone in the scalp and that this is one of the factors contributing to MPB. He was unable to explain why lanolin is included in a number of these products which are being sold to decrease EHL and to arrest or reverse MPB. (Tr. 812-813)

20. The avoidance of the use of hot air hair dryers, brushes, rollers, bleaches and dyes would, in itself tend to drastically reduce hair fallout and hair breakage. This result could be achieved without the use of any of Respondent's products. (Tr. 814)

21. In discussing the diet of his patients he said that roughly 20 percent of them consume diets with an inadequate protein content. He was asked if he knew the recommended aily allowance of methionine or the sulfur containing amino acids. he said he did not have it at the moment but he has it in his [presumably, RDA] book. He was then asked whether it would surprise him to know that 50 grams of protein of high quality per day would provide all of the methionine needed for a 220-pound adult. He replied: "I believe that, but I am not familiar with the RDA." (Tr. 815)

22. Dr. Lubowe has conducted no double-blind, controlled studies involving the use of biotin. He had stated that biotin makes a contribution to cellular mitosis in the follicle, and he was asked to describe the mechanism by which this occurs. The witness was uncertain, but he said that "We do know that it's a healing agent, and in that manner it causes a more rapid reproduction of cells. But, basically, I refer to biotin more as an anti-androgen, as a cellular adjuvant." (emphasis supplied) The mechanism of biotin's anti-androgenic activity is that "it metabolizes the DHT and neutralizes it, changing it to other compounds," but he did not know what those other compounds might be. Dr. Lubowe, Dr. Settel and the 30 followers of Dr. Settel are in agreement on this point, but he does not know the views of other doctors. (Tr. 8181-819)

23. Dr. Lubowe's previous statement that he is not familiar with the RDA, despite the fact that he has "the book" (Tr. 815) is borne out by his testimony with respect to biotin. The "book" is a compilation of the Recommended Dietary Allowances (9th Ed. 1980) prepared by a Committee of Dietary Allowances, Food and Nutrition Board, Division of Biological Sciences, Assembly of Life Sciences, National Research Council, and it was publishes by the National Academy of Sciences, Washington, D.C. A "Notice" on page ii of the Report sets forth the following comment concerning the composition of the Committee.

"NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the Councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competencies and with regard for appropriate balance.

"This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the Academy of Engineering and the Institute of Medicine."

24. It will recalled that early in his direct testimony Dr. Lubowe made the following statements (each statement is underscored). The RDA comment on the same subject immediately follows:

It (Biotin) is "usually difficult" to obtain. (Tr. 753) RDA - "Biotin occurs widely in foods. Good sources include liver, kidney, egg yolk, and some vegetables. (p. 120)

It "is manufactured in small doses in the intestine of the human being." (Tr. 753)

RDA - The vitamin is synthesized by many different micro-organisms and certain fungi. It is believed that intestinal microflora make a significant contribution to the body pool fo available biotin; ***" (p. 120)

"No. It's not (essential) --It's considered of a minute essentiality." (Tr. 753)

RDA - "Biotin is a water-soluble, sulfur-containing vitamin that is widely distributed in nature and essential for the health of many animal species, including man." (P. 120)

"It doesn't figure basically in the physiology of the human being." (Tr. 753)

RDA - "It plays an important role in the metabolism of both fat and carbohydrate." (P. 120)

As opposed to the vague references to unknown authors, and the phrases "it may", "we believe", and "it is thought" with which Dr. Lubowe's testimony is sprinkled, the statements in RDA are just as liberally endowed with references to specific authors, and specifically designated page numbers in professional journals and in text books.

25. There are additional instances such as those noted above, but further elaboration is unnecessary.

Rebuttal Testimony of Dr. Kramer

1. Dr. Kramer was recalled to the stand as a rebuttal witness. The topics concerning which he was examined and his testimony thereon are shown below.

2. Dr. Gollinick had testified that he based some of his treatment decisions and scientific conclusions on his vast experience. While experience is valuable, evaluation of a particular treatment or the effectiveness of a therapy or a drug on that basis is inferior to modern methods of measuring efficacy. (Tr. 853-854)

3. The importance of inhibiting factors such as tonsillitis or dental problems as contributing to MPB represents a theory of medicine called the focus of infection theory which has been largely discarded. It is not listed in the scientific literature as being applicable to MPB, nor did Dr. Kramer encounter it in his discussions with his colleagues or in his training. (Tr. 854-855)

4. There is absolutely no evidence to support the contention that biotin is an anti-androgen. (Tr. 855)

5. Medical World News in which Dr. Lubowe claimed the Settel report was published is not critically reviewed and it is not really a medical journal. (Tr. 856)

6. Rather than being a report on a biotin study as claimed by Dr. Lubowe, the Settel paper reports on a study of a topically applied female hormone. Dr. Kramer states that he believes Dr. Lubowe's remarks on that study to be the result of a misreading by Dr. Lubowe. (Tr. 857)

7. Dr. Lubowe referred to a study by a Dr. Fleisch as a human subject study. The report of that study, which was by Fleisch and Goldstone and was published in 1952 in the Journal of Investigational Dermatology, related to a variety of substances, has been far surpassed by subsequent studies, and it was an animal study. (Tr. 857-858)

8. Self-reporting by patients on treatments and their beneficial results are listened to and if something of interest is presented it may be noted for further investigation, but in most cases the results so reported are brought about by the desire of the patients for positive results. (Tr. 858-859)

9. Reports by patients as to their daily hair loss can not be dismissed, but they must be taken with a grain of salt. (Tr. 860)

10. If, as reported by one witness, a person shampoos his hair daily he is going to see fewer hairs on the shower or tub floor than if he shampoos three times a week. (Tr. 860)

11. One of the witnesses reported new hair growth after using Bio-Genesis for a period of time. This event could be attributed to the use of the product or it could be attributed to the stimulation of the scalp by the act of rubbing the preparation on the scalp. This phenomenon is reported in a recognized leading text book written by Montagna. (Tr. 861)

12. If an experienced dermatologist reports consistently good results with the use of a product on about 500 patients, such a record is sufficiently important to warrant a good study to prove or disprove the efficacy of the treatment. There have been certain instances of treatments through the years for MPB and for other conditions which have been proposed by able, experienced and widely respected physicians. Because of the reputations of these physicians these treatments have been widely accepted by other doctors. But there have been instances in which someone among the physicians notes that the treatment was never vigorously tested. Then when the tests were actually done, vigorously and in a double-blind fashion, it was found that the treatments were no better than placebos. On the other hand, the results, in terms of the efficacy of a medication, that are obtained by controlled, scientific testing will be the same results received by other doctors when the tested substance is used by them in their practice. (Tr. 863-866)

13. Respondent agreed that the Settel study involved estradiol rather than biotin. (Tr. 866-867)

General Comment

The grouping of Respondent's products as presented herein is somewhat puzzling. For example, although the products discussed in the present group are called the Biotin products, there are products from the other two groups which contain that ingredient, as follows: Bio-Genesis and Bio-Prima II, from the first group; and Formula 40 from the third group. Since, however, the parties elected to use this grouping, and since it follows, approximately, the order in which the case was presented, the grouping is followed, with some variation, in this decision. The findings in this section of the decision in respect to the efficacy of biotin for the purposes for which it is being represented and sold in Respondent's products, are applicable to all products covered by the decision which contain biotin, regardless of the section of the decision in which they are discussed. Conversely, statements made about biotin in discussing products in other groups are applicable to the same ingredient of products in this group.

Non-Biotin Products

Amino Hair Food Formula, Jojoba Oil, Formula 40, Improved Formula 40, Nucleic Acid Gel, Herbal Hair Naturally, German Formula Hair Vitamins and German Formula Medicated Shampoo

The Alleged Misrepresentations

AMINO HAIR FOOD FORMULA

1. Amino Hair Food Formula will cause the regeneration of thick, healthy new hair 02,09,50ExhibitsJ-2It is not a magical baldness remedy, but acarefully researched and formulated blend ofvital amino acids, PROVEN TO PROMOTE NEWHAIR GROWTH. . .This breakthrough in aminoacid research provides your hair with the exact balance of amino acids it needs totrigger the birth of thick, healthy hair]THE AMINO HAIR FOOD FORMULA MAY BE AN ANSWERTO YOUR HAIR PROBLEM. Now you can TRIGGERYOUR OWN HAIR GROWTH CYCLE with this testedand documented hair discovery]

2. Use of Amino Hair Food Formula with stop the progress of balding or thinning hair 02,11,50J-3, p. 4The results of inadequate protein levels areslow growing, slow-to-replace hair. Sad tosay, * * * most Americans' intake of these nutrients is not proportionate to the amountrequired by the body. Which is why AminoHair Food Formula was developed.J-4, p. 4One Amino Hair Food Formula tablet dailyprovides the protein and amino acids neededfor healthy, lustrous hair. And you'll seethe results in just 30 days]

3. The average American's diet provides inadequate amounts of the amino acids needed for hair growth 02,11,50J-3, p. 4Sad to say, because the average diet is lowin the important amino acids (proteinbuilders) for hair growth, most Americans'intake of these nutrients is notproportionate to the amount required by the body. * * * Amino Hair Food Formula containsthe amino acids needed to manufacture hair.

4. Amino Hair Food Formula is proven to cause new hair growth 02,05,50J-2It is not a magical baldness remedy, but acarefully researched and formulated blend ofvital amino acids. PROVEN TO PROMOTE NEWHAIR GROWTH....This breakthrough in aminoacid research provides your hair with the exact balance of amino acids it needs totrigger the birth of thick, healthy hair]THE AMINO HAIR FOOD FORMULA MAY BE AN ANSWERTO YOUR HAIR PROBLEM. Now you can TRIGGERYOUR OWN HAIR GROWTH CYCLE with this testedand documented hair discovery]

JOJOBA OIL

a. Daily use of JOJOBA OIL will guarantee at least one day in a month when no hair is lost 02,12,50ExhibitsF-13, p. 3My Zero Hair Loss Guarantee stands behindJojoba Oil. If there is not at least oneday in a month of daily Jojoba Oil usewherein no hair is lost, I will extend a $50credit from Braswell, Incorporated.F-15, p. 2If you use my Jojoba Oil as your sole hairand scalp cleaner for one month, there willbe one day during that month in which duringthe hair cleaning process you will not loseany hair.

b. A persistent dandruff condition will lead to excessive hair loss. 02,12,56ExhibitsM-3To put an end to dandruff and associated hairloss, . . . you need Jojoba Oil.M-10, p. 3The interaction of sebum, dandruff, and pollution frequently leads to encurstationsthat inhibit the normal activity of these baceous glands. Baldness or excessivethinning is often the final result.

c. Use of JOJOBA OIL will eliminate excessive hair loss. 02,10,50ExhibitsM-7Jojoba Oil will inhibit the production ofsebum. That means a cleaner, healthier scalp.Which in turn means less hair loss, pure andsimple.M-30Jojoba Oil gently but effectively, loosensM-31and dissolves these sebum deposits for acleaner, healthier scalp and therefore, lesshair loss.

FORMULA 40

a. Application of Formula 40 to the hair will add to the cuticle wall surrounding the hairshaft, thereby permanently increasing the diameter of the hair. 02,10,54ExhibitsN-2And with continued use, Formula 40 actuallymakes hair thicker. It adds to the cuticlewall surrounding the hair shaft, resulting inan increase of the diameter of each individualhair.N-19Formula 40 contains polymers and keratinpolypeptides. These coat each strand of hairmaking each hair shaft fatter.

b. The Biotin contained in Formula 40, when applied to the hair and scalp, will prevent excessive hair loss. 02,12,58Body ForumFormula 40 also contains biotin which staysJuly '80on your scalp all day long to provide protectionoutsideagainst abnormal hair loss. Studies have indi-back covercated that biotin has a 40% success ratio inpreventing excessive hair loss and in regrowinghair.N-4Biotin has been successfully used to stopexcessive hair fallout and to stimulate newgrowth in dormant follicles. So becauseFormula 40 works from shampoo to shampoo,you'll benefit from the constant presence ofbiotin.

IMPROVED FORMULA 40

a. IMPROVED FORMULA 40 reduces excessive hair loss

b. IMPROVED FORMULA 40 contains biotin 02,12,54ExhibitsE-17, p. 3New improved Formula 40 combines the Formula 40hair thickening agent with biotin to reduceexcessive fall out.

c. Biotin neutralizes DHT, thereby significantly reducing hair loss 02,11,60E-5, p. 4Topical preparations containing biotin havebeen reported to metabolize or "burn up" scalpaccumulations of DHT thereby unlocking the hairgrowth process. Excessive hair loss subsidesand new growth is seen in balding and inreceding areas.

d. An antibacterial agent in IMPROVED FORMULA 40 makes a significant contribution in preventing hair loss in the average person 02,12,52E-17, p. 5The new improved Formula 40 combines biotin, aknown retardant of hair loss, with an anti-bacterial agent that fights the bacteria and dandruff that often cause excessive hair fallout.

NUCLEIC ACID GEL

a. The amount of nucleic acid present in the scalp decreases with age causing decreased hair production 02,12,54G-2, p. 4In addition to hereditary factors, the naturalaging process is a slowing down of activitywithin the body. Sometimes this slowing downis due to the decreased level and efficiency ofnucleic acid within our cells.Body ForumAs we age, however, the quality of the cellsAug '80decreases, scalp levels of nucleic acidp. 16decrease, and less hair growing activity takesplace.

b. Topical application of NUCLEIC ACID GEL will increase the nucleic acid level in the scalp, thereby causing the resumption of normal hair production

c. Topical application of NUCLEIC ACID GEL will penetrate the skin tissue to be absorbed into the hair follicles 02,12,56Body ForumNucleic acids can penetrate the scalp and beAug '80absorbed into the hair follicle or root.p. 10G-2, p. 4Because nucleic acid can be absorbed through the skin, our follicles actually can be fed topically.

d. Topical application of NUCLEIC ACID GEL will cause the growth of new hair 02,12,54ExhibitsG-3Medical researchers have now discovered it's$Bpossible to supplement nucleic acid directly tothe scalp. In a topically applied solution, itcan penetrate the dermis (skin) and inundate the hair follicle and related growing organs. Asnucleic acid activity returns to normal, hairgrowth becomes improved. Not only does it growfaster, but thicker and fuller, too.*** Itstendency to fall out is reduced.Body ForumTopical application of a nucleic acid-basedAug '80formula can jolt the cycle back into renewal.p. 10

HERBAL HAIR NATURALLY (tablets and liquid)

a. Topical application of Herbal Hair Naturally makes the significant causal contribution to growth of new hair on a bald or balding scalp.

b. Increased blood circulation in the scalp will stimulate growth of new hair on the bald or balding scalp 02,05,56L-3By increasing scalp circulation, certain herbscontribute to the developing of new hair growth.

c. Ingestion of Herbal Hair Naturally Tablets will:

1. Clear the body of parasites.

2. Detoxify and cleanse the blood and lymph systems.

3. Kill unwanted bacteria. 02,10,56ExhibitsL-3The tablets' herbal formula detoxifies your bloodof any harmful poisons. This includes diseaseproducing bacteria, parasites and other growththreatening organisms.

d. Proper habits and incorrect maintenance of the hair and body are passed down from one generation to the next through heredity. 02,11,56L-2, p. 2Hair loss could be hereditary in the sense thatproper habits and incorrect maintenance of the hair and body are passed down from one generationto the next.

GERMAN FORMULA HAIR VITAMINS and GERMAN FORMULA MEDICATED SHAMPOO

a. Ingestion of German Hair Vitamins will make a significant contribution to growth of beautiful healthy hair by the average person. 02,12,58 Body ForumThe German Hair Vitamin represents a great advance in Oct. '80 the hair care field. It is a precise formulation of p. 43 the nutrients needed to make hair grow.

b. Enzymes contained in German Hair Vitamins will make a significant contribution to growth of hair. 02,12,52 Body ForumIt also contains enzymes to increase the proteinAug. '80 synthesis process so crucial to new growth.p. 52

c. German Formula Medicated Shampoo will make a significant contribution to prevention of hair loss in the average person.

FINDINGS OF FACT

The Testimony of Dr. Schwartz

1. Before the hearing Dr. Schwartz had been shown examples of the advertising materials and copies of lists of the ingredients of certain of these products which are identified by exhibits contained in one of the two volumes of exhibits, including the following: 04,21,16,12,08Product Advertisements Ingredients Tr. pp.Amino Hair FoodJ-2; J-3, p. 3;J-1 122-124 FormulaJ-4, p. 4Formula 40,N-2; N-3; N-4N-1 124-127 Improved Formula 40P-2; P-3P-1 German Formula Hair VitaminK-6; K-2; K-4K-1-A127-132German Form. Medi- cated ShampooK-1-BNucleic Acid GelG-3; G-5G-1 132-136

2. With the exception of the SBU-185 shown as an ingredient of Improved Formula 40, which ingredient he had never heard of, and which could not be found in the scientific literature, Dr. Schwartz was familiar with, and knew the function of, all of the ingredients contained in the foregoing products. He found in his search of the scientific literature no information indicating that: any of the ingredients of Amino Hair Food Formula, taken singly or in combination as presented in the respective products, would stop the progress of balding or thinning hair, or cause the regeneration of new hair on a bald scalp; any of the ingredients of Formula 40 or Improved Formula 40 would reduce EHL; any of the ingredients of German Formula Hair Vitamins or German Formula Medicated Shampoo would make any significant contribution to hair growth or to the prevention of EHL; or any basis in science that topical application of Nucleic Acid Gel will increase the nucleic acid level in the scalp and thereby cause the resumption of normal hair production. If the cells remain alive, the amount of nucleic acid, per cell, present in any portion of the body, including the scalp, does not change with age. If the cells die, there would be less nucleic acid at the scalp. The content of the cells of the individual is the result of one's genetic history. (Tr. 122-134)

3. On cross-examination, Dr. Schwartz repeated his statement that there is nothing in scientific literature that (a) indicates that biotin, contained in Formula 40, will prevent RHL, or (b) identifies SBU-185, said to be the special anti-bacterial agent in improved Formula 40. (Tr. 170-171) Commenting on Amino Hair Food Formula Dr. Schwartz identified primary dried yeast as a high source of protein; casein, as a milk protein; cystine, as a non-essential amino acid; and methoinine as an essential amino acid. A deficiency in an essential amino acid would affect the growth of the entire body, including the hair. Similarly, in the event of a body deficiency in any of the ingredients of German Hair Formula, the entire body, including the hair, would be adversely affected. In the presence of a vitamin deficiency, the hair would be associated with individual diseases which are associated with the particular vitamins. The deficiency of the vitamin or other ingredient would result in, among other things, a lessening of the ability of the hair to grow. (Tr. 172-175)

4. In connection with his comments that certain products under consideration are drugs rather than cosmetics, Dr. Schwartz was asked for the standard by which it is determined whether or not a drug is efficacious. He replied that the standard is "a controlled clinical trial." In the absence of such a trial, no conclusions may be drawn and the claim for efficacy would be considered to be untrue. This point is considered at some length and he said that his testimony on this point is in the mainstream of current scientific thought. (Tr. 181-186)

The Testimony of Dr. Kramer

1. In preparation for his testimony in this proceeding Dr. Kramer had reviewed the advertisements for the products in this group and the lists of ingredients listed above concerning which Dr. Schwartz testified. In addition, he had reviewed similar materials related to Jojoba Oil and Herbal Hair Naturally, including the following: 02,31,17Product Transcript pagesAmino Hair Food Formula359-361Formula 40361-365Improved Formula 40361-365German Formula Hair Vitamins365-370German Formula Shampoo365-370Nucleic Acid Gel370-373Jojoba Oil373-377Herbal Hair Naturally377-381 (Tablets and liquid)

Dr. Kramer was familiar with, and stated the function of, the ingredients of the products above listed, including the last two for which no testimony had been given by Dr. Schwartz. The testimony of Dr. Kramer was in agreement with that of Dr. Schwartz in regard to those products concerning which Dr. Schwartz testified. Some of the testimony of Dr. Kramer related to the specific products is now summarized:

Amino Hair Food Formula:

There is no scientific evidence to support the statement at C EX J-4, p. 4 that "The average diet is low in the important amino acids (protein builders) needed to promote hair growth." The taking of this product makes no greater contribution to hair growth than one would obtain from an average - or even a poor diet. There is no evidence to support the proposition that this product will cause regeneration of hair growth, stop the progress of balding or thinning hair, or cause new hair growth. (Tr. 359-361)

Formula 40:

This product will so long as it is continued to be used coat the hair shaft and thereby increase its diameter. The increase in the diameter of the hair shaft caused by the use of this product would not last permanently unless the use of the preparation continued permanently. The biotin as presented in this product will not prevent EHL. (Tr. 361-364)

Improved Formula 40:

The SBU-185 contained in the product is an acceptable anti-bacterial agent, but there is no support for the claim that it will make a significant contribution to the prevention of hair loss. Despite claims to the contrary in the advertisements (C Ex. p-3), there is no biotin in the preparation according to its label. (C Ex. p-1) The product will not prevent hair loss or reduce EHL. (Tr. 364-365)

German Formula Hair Vitamins and Shampoo:

Although listed as such in the label, cystine and tyrosine are non-essential amino acids. There is an adequate supply of all of the ingredients of this product in the average American diet. In the past there was a theory that severe dandruff might be related to hair loss, but that theory is no longer supported by the medical profession. (Tr. 369) Statements that (1) oily, sebaceous matter in the scalp, if left untended, can build up, weaken the hair shaft, and eventually cause the hair to fall out; and (2) oily sebaceous matter can block the hair follicles so that no new hair will grow where the old has fallen out are unsupported by scientific evidence. Similarly unsupported is the claim or suggestion that this product will make a significant contribution to the prevention of EHL. (Tr. 370)

Nucleic Acid Gel:

Nucleic acids are related to hair growth in that the hair follicle is a living tissue composed of living cells, and every living tissue contains nucleic acid, just as water is contained in every living cell. Nucleic acid per cell in the scalp remains the same but the number of cells probably reduces with age. Both are essential for the healthy functioning of the cell. Topically applied nucleic acids have no effect on hair growth. Even if there is a decrease in the amount of nucleic acid present on the scalp with increasing age, that would not cause decreased hair production because there is no relationship between the two. (Tr. 371-372) There is no known scientific evidence that, if topically applied this product will penetrate into the scalp, cause resumption of hair production or cause the growth of new hair. (Tr. 373)

Jojoba Oil:

Certain of the ingredients would act to cleanse the scalp, but the product would accomplish this objective if the jojoba oil were not present. Again, dandruff and sebum build-up on the scalp do not cause hair loss, but if the product did cleanse the scalp, it would make no contribution to reduction of hair loss or growth of hair. There is no scientific evidence that this product will eliminate EHL. It is logical that there may be one day in a month on which the average person may lose no hair, but there is nothing to show that this product would contribute to this statistical possibility. (Tr. 376-377)

Herbal Hair Naturally (tablets and liquid)

The liquid version of this product might impart a pleasant smell to the hair, but its application as directed to the scalp will not contribute to the growth of new hair on a bald scalp. Stimulating blood circulation in the scalp will not cause hair to grow. (Tr. 379) With regard to the tablet version of this product, their ingestion will neither clear the body of parasites, nor detoxify and cleanse the blood and lymph systems. (Tr. 379) The statement that proper habits and incorrect hair maintenance are inheritable are trivial and inconsequential. (Tr. 381)

2. On cross-examination with respect to his testimony on this group of products Dr. Kramer stated that if a substance containing essential amino acids is ingested, these would go into the basic metabolic pool of the body and, presumably would be available to all tissues and organs of the body. (Tr. 426)

3. The medical profession does not subscribe to individual hair analysis as being a useful tool, except in the rarest of circumstances. There are some specific things that can be measured in the hair which may reflect certain conditions in the body, but these are very, very limited in nature. (Tr. 427) A marginal deficiency, by definition, does not necessarily have clinical manifestations, and may only be detectable by sophisticated laboratory tests. To produce hair, one must have all of the essential amino acids. If any essential amino acid is missing, the person would not be healthy, and he could not produce hair. If a marginal deficiency existed, and if a person supplemented his diet with essential amino acids, this would be beneficial. (Tr. 428-429)

4. With respect to Formula 40, it is true that the product will coat a particular hair and thereby increase its diameter but it will not enlarge the shaft of the hair itself. (Tr. 430-432)

5. The German Hair Formula Shampoo will cleanse the hair and it might be helpful in treating a dandruff condition if it has enough coal tar to be therapeutic. There is doubt on this point because the ingredients are listed in the order or percentages in the product and coal tar is in the lower half of the list. (Tr. 433, C Ex. K-1-B) Sebum is produced in sebaceous glands. The product of the sebaceous gland enters into the hair follicle and uses it to rise to the top of the scalp where it is dispersed. Sebum can harden from its original liquid state. The flakes on ones shoulders are not dried sebum, but they are dead skin, which may have a coating of sebum. When sebum reaches the scalp, its condition is changed by bacteria. Thus, the statement in the penultimate paragraph on C Ex. K-2 that "In eradicating buildup and leaving hair shiny clean, German Medicated Shampoo creates an environment ideal for maximum hair growth" is not false. (Tr. 437-438)

6. The vitamins in the tablet product have a broad spectrum of application and are necessary for normal growth and development, including that of the hair. Deficiency of these nutrients may possibly lead to slower growing, unhealthy hair as one manifestation among others. (Tr. 434-6)

7. With respect to Nucleic Acid Gel, Dr. Kramer could not say exactly what each of the ingredients does when in combination with the other ingredients, but it is his opinion that the combination of substances presented in that product would have no therapeutic value. (Tr. 439)

The Testimony of Dr. Lubowe

1. Dr. Lubowe stated that Amino Hair Food Formula would be helpful if a person had a deficiency of the free sulphur amino acids, B-complex and protein as seen in casein, lactalbumin. He said that about 20 percent of his patients have such deficiencies and he prescribes vitamins and amino acids for them. He would give a product such as this to patients with thinning of the hair, breakage and loss of sheen of the hair and if the laboratory studies showed these patients to be deficient in vitamins and proteins. (Tr. 798) If there is a severe deficiency of these substances, then it can improve the growth of the hair. Then he was asked whether there are "inadequate amounts of amino acids needed for hair growth in the average American diet." He replied "Yes, there is." (Tr. 799)

2. In regard to German Formula Hair Vitamins, if there is a person who is deficient in Vitamin E, Vitamin B6, or pyridoxine, or who had an excessive amount of fat or cholesterol, the product would be helpful in hair growth. (Tr. 800) He said, also, that if a person is deficient in certain essential amino acids, among which he listed cystine (not an essential amino acid), the product would be beneficial in terms of hair growth. In each case the deficiencies were to be determined by blood level examination. The pancreation extract contains lipase, which digests excessive fats. If "cholesterol is in the body, in the stomach, and has large amounts of cholesterol, since cholesterol helps in the formation of testosterone, we feel it would be helpful in destroying the cholesterol." This, in turn, would benefit the hair. (Tr. 800)

3. When on cross-examination, he was asked for the basis of his belief that exogenously administered nucleic acids can contribute to cell mitosis in the follicles, he replied that he has read it in the literature and he believes it to be true. He cited a book on nutrition (un-named) by Joliffe (otherwise unidentified) in which the author describes the effect of ribonucleic acid. He said, among other things, that nucleic acids are vitamins. (Tr. 810-811)

4. At one point, Dr. Lubowe said it is his position that testosterone is produced in the testes and in the adrenal glands, but a moment later he stated that he agrees that testosterone is produced in the testes, the adrenal glands and in the scalp. (Tr. 811-812)

5. Dr. Lubowe said that unless a person has a deficiency in the nutritional substances contained in Amino Hair Food Formula, German Hair Food Vitamins and the NC-36 tablets, he would derive no benefit from taking these products. (Tr. 822) He was asked whether it is true that dermatologists, generally, regard the loss of 50 to 100 hairs a day as being within the normal range. His reply was that the normal range of loss is 25 to 50 hairs a day, and, further, anyone whose view is different from his is incorrect. (Tr. 823) Dr. Kramer and Respondent agree that "the average person's hair loss (male and female) is between 50 and 100 hairs per day." (Tr. 279, C Ex. D-6)

Evaluation of the Medical Testimony

1. The criterion for determining the weight to be accorded to medical and scientific testimony is whether such testimony is in accord with the consensus of informed medical and scientific opinion. Reilly v. Pinkus, 338 U.S. 269; Original Cosmetic Products, Inc., et al. v. Strachan, et al., 459 F. Supp. 496 (S.D.N.Y., 1978), aff'd. w/o Op. 603 F.2d 214 (2nd Cir. 1979), cert. den. 444 U.S. 915 (1979).

2. Dr. Schwartz stated a number of times that his testimony is in accordance with the mainstream of scientific thought on the subjects about which he testified (e.g., Tr. 103-104, 183).

3. Similarly, Dr. Kramer said that his testimony expresses the views and opinions of those in the mainstream of medical thinking and knowledge in the field concerning which he testified (e.g., 324, 325, 353, 449).

4. Drs. Schwartz and Kramer were confirmed in their testimony concerning the consensus of scientific and medical opinion by the fact that each of them caused a search of the scientific literature to be made, and no information as to the efficacy of Respondent's products for the purposes for which they were being advertised and sold could be found. The testimony of Drs. Schwartz and Kramer relative to the consensus of opinion was not persuasively contradicted.

5. Dr. Schreck-Purola stated that it is a known fact, till today, that there is no cure for MPB; that it is widely recognized that MPB is irreversible and cannot be cured, although such is not her opinion; and that her opinion is not generally held by physicians and dermatologists because its still against the common knowledge, except that her opinion is partly shared in Germany, the extent of such acceptance never being defined. (Tr. 554, 558-559, 568-569)

6. Dr. Nordstrom has a standing order for any articles reported or listed in Index Medicus dealing with the subject of "scalp," "alopecia" and "hair," in more than 2000 leading medical journals of the world. So far as he is aware, neither the 1974 nor the 1978 study (CX-2, CX-3) has been published in any recognized medical journal. Contributions from the First Department of Pathology are not published in Index Medicus, but if either study had been published in a recognized medical journal elsewhere in the world, he would know of it and he has no such knowledge. He has seen no complete cures of MPB attributable to Dr. Setala's preparation, and he does not use the formulation on any of his patients. Although he says the 1974 and 1978 studies show a very high degree of probability, there is no article in the world, so far as he knows, in which it has been shown that re-growth of hair in MPB is possible. (Tr. 580, 636-637, 642, 649-650)

7. Dr. Gollnick engages in medical practice pursuant to a theory which has been discarded. (Tr. 854-855)

8. Dr. Lubowe indicated his disdain in regard to the consensus of informed medical opinion when he said he did not have any opinions of the medical profession ... that all he was concerned with was his own opinion. (Tr. 804) Overall, it is fair to say that Dr. Lubowe's testimony was not in agreement with the consensus of scientific and medical opinion.

9. It is true that Messrs. Morrison, Messina and Ruccio were enthusiastic in their praise of the products of Respondent which they used, but enthusiasm will not serve as a substitute for, and is hopelessly outweighed by competent medical proof.

Complainant's Request Regarding Certain Unopposed Charges

In connection with several advertising claims and other matters alleged in these proceedings, Respondent offered as part of the hearing record no testimony. With respect to these charges, Complainant asks the Presiding Officer to infer that Respondent has no defense to them. (Comp. Br., 84-85)

The Rules of Practice provide that: where no timely answer is filed the Respondent shall be deemed to be in default; when a timely answer is filed, but Respondent fails to appear at the hearing, Respondent may be deemed to have abandoned the intent to defend against the charges; and any facts alleged in the Complaint which are not denied may be considered as proved. (39 C.F.R. § 952.11(a), 952.11(b) and 952.10(c) I know of no authority, and Complainant has pointed to none, under which when a charge in a Complaint has been denied and the Respondent is represented at the hearing, the Complainant's evidence may automatically be uncritically accepted and the Complainant thereby be relieved of the burden of proving the specific charges. The charges concerning which Complainant's request charges. The charges concerning which Complainant's request is made are disposed of in the usual manner in the sequence in which they are presented in this decision, except as to those charges which are gound to be unsupported.

Respondent's Legarl Arguments

Respondent makes five arguments which are said to invalidate the proceeding.

1. Admissibility of Memorandum of Interview with Drs. Setala and Schreck-Purola. (Complainant's Exhibit 12) The memorandum in question was prepared by Inspector Powers from notes he had taken during an interview on June 16, 1980, with the named doctors. Actually, there are three related memoranda of this interview: one, on ruled paper with handwritten notes (EX. R-2); a second, on unruled paper, with handwritten answers or comments with respect to typed questions (EX. R-1); and the third, which is the one complained of. There is no significant inconsistency to be found in these memoranda. They were admitted into evidence pursuant to the provisions of § 803 (8) (B) as public records and reports setting forth matters observed by the Postal Inspector pursuant to duty imposed by law as to which matters there was a duty to report. The portions of the Setala letter of July 16, 1980, received into evidence as Complainant's Exhibit 14 and the oral testimony of Dr. Purola at the hearing served to corroborate the content of the memorandum (C-12) and to add probative weight to it. The other portions were irrelevant as urged by Respondent. Admission into evidence of Complainant's Exhibit 12 was correct, and I adhere to the ruling.

2. The Lack of Subpoena Power and the Right of Cross-Examination. While the Postal Service is not authorized to issue subpoenas, it is pointed out that Respondent did not ask for, and, indeed, appeared to have no desire for, the testimony of additional witnesses to be called by Complainant. Respondent brought two witnesses from Finland and one from Germany, and it is presumed that, assuming his consent, Dr. Ketala could have been present to testify for Respondent.

3. Complainant Has No Power to Require Corrective Advertising by Respondents Under 39 U.S.C. § 3005. This above statement is correct. In addition, the Postal Service now has nothing to do with claims made for products sold by mail until it appears that the seller "is conducting a scheme or device for obtaining money or property through the mail by means of false representations ***." Then, in order to issue the mail-stop order provided for, the existence of such scheme or device must be established by evidence satisfactory to the Postal Service. The determination of what constitutes a scheme or device is one which must frequently be made on an ad hoc basis, depending upon facts and circumstances existing at a particular time, and the same is true with respect to the termination or continuance of a scheme or device.

4. The Standard of Proof. It is true, as Respondent states, that in cases brought by the U. S. Postal Service under 39 U.S.C. § 3005, the Complainant has the burden of proving its case by a preponderance of the evidence. It is equally true that if the Complainant establishes a prima facie case, the Respondent must go forward with competent, credible evidence and overcome Complainant's case. If the Respondent does not do so, the issue is resolved in favor of the Complainant. In order to succeed the Complainant must adduce the preponderance of the competent, credible, probative evidence. See S. Gard Jones on Evidence, Section 30:4 (1972); Accord, Collins Securities Corp. v. S.E.C.m 562 F.2d 820, 823 (D.C. Cir. 1977), Wigmore, Evidence, Section 2498 (3ed. 1940).

5. Materiality of Respondent's Advertising Claims. It is agreed that the falsity of the claims in the advertising matter used by persons who are respondents in misrepresentation proceedings before the Postal Service must be material falsity. It is further agreed that in order for a claim to be material, it must be shown to have at least some influence on the buying decisions made by consumers. Respondent appears to go beyond this point, however, and say that the Complainant must produce victim-witnesses who say that in reliance upon the false representations they remitted the purchase price and obtained something less, or different than, that which they reasonably expected to get.

The cases do not so hold. For example, it has been held many times that an order may issue even though the scheme or device does not succeed. Durland v. United States, 161 U.S. 306 (1895); Farley v. Heininger, 105 F.2d 79; cert. de. 308 U.S. 587 (1939). In the latter case the Court said:

"The decisive factor, therefore, is not whether 'anyone complains of fraud, or was in fact defrauded,' but whether the mails are being used to project a scheme which may result in obtaining money from members of the public by means of false and fraudulent statements."

As Judge Medina said in Lynch v. Blount, 339 F. Supp. 689, 695 (1971): "Good old-fashioned schemes to defraud by false representations are as old as the hills and as easy to recognize once the issues of credibility have been resolved."

Respondent's lay witnesses provided ample evidence of the materiality of the Respondent's representations. They spoke of having used various other remedies in their endless searches for something to cure their hair loss or baldness. The promise of products that would reverse EHL and MPB was sufficient to cause these gentlemen to purchase the products.

CONCLUSIONS OF LAW

1. Respondent using the names and addresses set forth in the caption, solicits remittances of money through the mails for the products, Bio-Genesis, Bio-Genesis Shampoo, Bio-Prima II, Bio-Prima II Shampoo, LB-49, Bio NC-36 (liquid and tablet forms), Biotin Gel, Biotin H-3, Biotein H-3 with Nucleic Acid, Amino Hair Food Formula, Jojoba Oil, Formula 40, Improved Formula 40, German Formula Hair Vitamins, German Formula Medicated Shampoo and Herbal Hair Naturally (liquid and tablets).

2. The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine, 333 U.S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y., 1957); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y., 1959). Express representations are not required. It is the net impression which the advertisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable. G. J. Howard v. Cassidy, 162 F. Supp. 568. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U.S. 748 (1976).

3. Applying the foregoing standards, I find that Respondent in its advertisements makes the representations alleged in the Complaints, with the exceptions lated stated.

4. That Respondent may have ceased making certain representations is no bar to this proceeding. United States v. W. T. Grant Co., 345 U.S. 629, at 632 (1953); Warner-Lambert Co. v. F.T.C., 562 F.2d 749 (D.C. Cir.), cert/ den. 435 U.S. 950 (1978).

4. a. In its advertising program, Respondent does not make, in its entirety, the representation that "application of Formula 40 to the hair will add to the cuticle wall surrounding the hairshaft, thereby permanently increasing the diameter of the hair."

b. A careful check of every exhibit in the C Ex. N series discloses that all or a substantial portion of these documents contain a reference to use of this product "after shampooing" (N-1, 2, 4, 6, 8, 10, 17, 19). The remainder of the advertisements in this series speak of hair looking "fuller," and "thick and full," but there is no suggestion that single or even multiple applications will produce permanent physical results. Also, stress is laid upon the fact that the hair will 'appear" to be fuller e.g., C Ex. H-5, 7, 9, 11). If a product will create a permanent change in the size or texture of one's hair, it would not be necessary to use it after each shampoo.

c. Respondent does not represent that Formula 40 will permanently increase the diameter and the charge in which that language is used will no longer be considered. (Formula 40, charge "a".)

5. a. Respondent does represent that proper habits and incorrect maintenance of the hair and body are passed down from one generation to the next through heredity.

b. Dr. Kramer said that he had difficulty understanding this statement, but, in any event, he characterized the representation as being trivial and inconsequential. I would add, further, that it is not a material representation. No one would be moved to purchase or not to purchase on the strength of this representation.

For the foregoing reasons the representations set forth as charge "d" in connection with herbal Hair Naturally will not be further considered.

6. Testing of the product is not required to sustain a complaint under 39 U.S.C. § 3005. Without it, the opinion of a medical expert is sufficient evidence of falsity of advertising claims. Original Cosmetic Products, Inc. v. John Strachan and United States Postal Service, supra.

7. The offering of a product for use with a given condition implies that it will cure or effectively treat that condition. Aronberg v. F.T.C., 132 F.2d 165, 167 (7th Cir., 1942). See, also, Rhodes Pharmaca Co., Inc. v. F.T.C., 208 F.2d 382, 386 (7th Cir. 1953), modified on other grounds, 348 U.S. 940 (1954).

8. The testimony of Dr. Kramer and Dr. Schwartz bespeaks the consensus of informed medical and scientific opinion. Testimony to the contrary by Respondent's witnesses is unpersuasive.

9. Except as to Court II of the Complaints, to be discussed later, the representations herein found to be made by Respondent are false, or false in part, and they are material representations because a reasonable person would attach importance to the existence or nonexistence of them in determining his choice of whether to buy Respondent's products. (See Attachment 1) While there is authority for administrative law judges to determine materiality of false representations in cases brought under 39 U.S.C. § 3005, there is abundant evidence on this point in this proceeding in the testimony of the witnesses Morrison, Messina and Ruccio. (Standard Research Labs, P.S. Docket Nos. 7/78, 7/86, P.S. Dec. 1980)

10. Complainant has established its case by a preponderance of the competent, credible and probative evidence.

Count II

Respondent has charged that Braswell, Inc., under the name of Head Start, Inc., knowingly seeks remittances of money through the mails by means of false representations made by its retailers and sales representatives at its express direction.

Respondents Braswell, Inc. and Head Start, Inc. offer employment as independent sales representatives for Braswell products to certain of their customers. Respondents send such written offers along with packages of ordered merchandise (Ex. R-1). Persons who respond to the invitation contained in R-1 to ask for more information are sent a further invitation to become a sales representative, an application and an agreement (R-2). Persons who then complete the application and agreement will receive sales representative order forms and mailing envelopes as well as a Home Sales Manual and Product Boo--all as shown at Ex. R-3 and R-4.

Before a finding can be made that Count II encompasses a valid charge, it must be established that Respondent consciously harbored an intent that his agents would deceive prospective purchasers and cause them to purchase Respondent's products.

On this subject the court in Gottlieb v. Schaffer, 141 F. Supp. 7, 17, said:

"Also, it is not without interest that the Supreme Court has held 'an intent to deceive might be inferred from the universality of scientific belief that advertising representations are wholly unsupportable * * *.' In this instance the claimed representations defy universality of experience. The hearing officer found the plaintiff's claims 'so preposterous and opposed to common knowledge and experience as to carry within themselves, without more, evidence of their falsity.' On this record it cannot be said there was no substantial evidence to support the finding so made by the examiner."

The record in this case leads unwaveringly to the conclusions that many of Respondent's claims are so false that Respondent was aware of their falsity and that Respondent may fairly be said not to care what the truth is about stopping EHL and preventing or reversing MPB. In such a case Respondent must be presumed to have been motivated by an intent to deceive. Corliss v. United States, 7 F.2d 455; Durland v. United States, 161 U.S. 306 (1985); Donaldson v. Read Magazine, 333 U.S. 179, 189 (1948); Walling v. Beverly Enterprises, 476 F.2d 393, 396 (1973); Burns v. Paddock, 503 F.2d 18, 23 (1974); United States v. Melvin, 544 F.2d 767, 777 (1977).

Various misrepresentations are contained in these publications, of which the following is but an example: In the "Product Book" it is said of Biotein H-3:

"We can cite case studies where a topical biotin preparation showed an 89% success rate in stopping excessive hair fallout in younger men afflicted with what was reported to be pattern baldness." (Product Book, 16th unnumbered page)

With all that has been said heretofore about the inability of biotin to have any effect on male pattern baldness and its concomitant hair loss, the foregoing quotation fully, supports the validity of the charge expressed in Count II of the Complaints.

Proposed findings of fact and conclusions of law submitted by the parties have been fully adopted. Otherwise, such proposed findings of fact and conclusions of law are rejected for the reasons that they are unsupported by or contrary to the evidence or because of their immateriality or irrelevance.

The Respondent, under the names and at the addresses shown in the caption hereof, is engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations within the meaning of 39 United States Code § 3005. Furthermore, the Respondent Braswell, Inc., under the name Head Start, Inc., knowingly seeks remittances of money through the mails by means of false representations made by its retailers and representatives at its express direction.

An order of the type authorized by 39 United States Code § 3005, substantially in the form attached, should issue against the names and addresses appearing in the caption hereof.