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Federal Trade Commission v. QT

January 3, 2008

FEDERAL TRADE COMMISSION, PLAINTIFF-APPELLEE,
v.
QT, INC., Q-RAY COMPANY, BIO-METAL, INC., AND QUE TE PARK, DEFENDANTS-APPELLANTS.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 03 C 3578-Morton Denlow, Magistrate Judge.

The opinion of the court was delivered by: Easterbrook, Chief Judge.

ARGUED OCTOBER 31, 2007

Before EASTERBROOK, Chief Judge, and BAUER and WILLIAMS, Circuit Judges.

WIRED Magazine recently put the Q-Ray Ionized Bracelet on its list of the top ten Snake-Oil Gadgets. See http://blog.wired.com/gadgets/ 2007/11/10-awesome-gadg.html.

The "Gold Deluxe" Q-Ray Ionized Bracelet

The Federal Trade Commission has an even less honorable title for the bracelet's promotional campaign: fraud. In this action under 15 U.S.C. §§ 45(a), 52, 53, a magistrate judge, presiding by the parties' consent, concluded after a bench trial that the bracelet's promotion has been thoroughly dishonest. The court enjoined the promotional claims and required defendants to disgorge some $16 million (plus interest) for the FTC to distribute to consumers who have been taken in. 448 F. Supp. 2d 908 (N.D. Ill. 2006), modified in part by 472 F. Supp. 2d 990 (N.D. Ill. 2007).

According to the district court's findings, almost everything that defendants have said about the bracelet is false. Here are some highlights:

! Defendants promoted the bracelet as a miraculous cure for chronic pain, but it has no therapeutic effect.

"immediate, significant or complete pain relief" had been "test-proven"; they hadn't.

! Defendants told consumers that claims of

! The bracelet does not emit "Q-Rays" (there are no such things) and is not ionized (the bracelet is an electric conductor, and any net charge dissipates swiftly). The bracelet's chief promoter chose these labels because they are simple and easily remembered-and because Polaroid Corp. blocked him from calling the bangle "polarized".

! The bracelet is touted as "enhancing the flow of bio-energy" or "balancing the flow of positive and negative energies"; these empty phrases have no connection to any medical or scientific effect. Every other claim made about the mechanism of the bracelet's therapeutic effect likewise is techno-babble.

! Defendants represented that the therapeutic effect wears off in a year or two, despite knowing that the bracelet's properties do not change. This assertion is designed to lead customers to buy new bracelets. Likewise the false statement that the bracelet has a "memory cycle specific to each individual wearer" so that only the bracelet's original wearer can experience pain relief is designed to increase sales by eliminating the second-hand market and "explaining" the otherwise-embarrassing fact that the buyer's friends and neighbors can't perceive any effect.

! Even statements about the bracelet's physical composition are false. It is sold in "gold" and "silver" ...


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