The makers of Formica are scared to death that their product is on the verge of becoming another aspirin or cellophane or even shredded wheat.
Those are just three of the names that were once protected trademarks. But now, thanks to the federal govenment, they are considered the common name for a certain type of product.
On May 31, 1978, the Federal Trade Commission's Denver office petitioned the Trademark Trial & Appeals Board to cancel the Formica trademark, alleging that the word Formica has become the common word for all high-pressure, decorative laminates.
What else does a customer ask for if he or she wants a high-pressure, decorative laminate for the kitchen counter, besides . . . Formica? the FTC asked.
The FTC cited the 1946 Lanham Trademark Act, which states that once a trademark stops serving its purpose, i.e., distinguishing the product's origin, and begins to describe the type of product, the owner of the trademark foreits exclusive rights to that word.
When that subtle shift occurs and people begin to regard the name as the actual product, as happened with aspirin, the trademark begins to breed confusion in the marketplace and actually gives its owner an unfair advantage, according to the FTC.
That is now the case with Formica, the FTC contends. In fact, Formica has parlayed this confusion into a leading market position (more than 40 percent of the market) and used it to charge 15 percent more for its product than it otherwise would be able to charge, FTC lawyers claim.
That means that consumers are paying approximately $10 million more each year than if Formica were competitively priced, the FTC claims.
In recent months, FTC Chairman Michael Pertschuk and his top antitrust officials, Daniel Schwartz and Alfred Dougherty, have contended that they are, first and foremost, advocates of increased competition.
If anything, cancelling the Formica trademark would be likely to spur competition, the FTC says. Seven producers of the plastic laminate are left, and four of them now account for 80 percent of the industry output. Four companies have left the business, and none have entered it in the past two decades.
There has been speculation in the trade press of a major price war and renewed competition if the FTC effort is successful.
Formica took its defense to the Supreme Court, which earlier this month ruled that the FTC did have authority to pursue this petition.
But Formica, and now dozens of other firms, are taking their battle to Congress.
Lobbyists for such prominent firms as Procter & Gamble, General Foods, Westinghouse, 3M Corp., Eastman Kodak, U.S. Gypsum, Ocrning Glass, Pfizer, Johnson & Johnson and Dow Chemical have been knocking on doors on the Hill in an effort to stop the FTC proceedings one way or another.
Rep. Thomas Luken (D-Ohio) has introduced an amendment to the FTC authorization bill that would prohibit the agency from using funds to pursue canceling a trademark solely on the grounds that it has become generic. And it is rumored that Sen. S. I. Hayakawa is planning to introduce a similar amendment to the Senate authorization bill.
That is not the first time opponents of FTC actions have tried to stop them by cutting funding, and the agency has garnered some support on the Hill to oppose such action. The agency contends any such policy changes should come through policy committees where they can be debated openly.
For its part, Formica has lambasted the FTC and Pertschuk, calling the proceeding "amateurish."
Formica President Martin B. Friedman also called the proceeding "a landmark case with severe ramifications for business and carrying a high cost to the taxpayer.
"Consumers are not stupid," Friedman said. "Unlike Mr. Pertschuk and his agency, who seem to view consumers as confused, gullibel, helpless and in need of his guidance, we believe consumers are intelligent and discerning in most of their purchasing, and that brand identification of products helps in products selection."
Formica calls the FTC action "unfair, unjustified and a prelude to similar FTC actions versus other famous trademarks."
It also claims that 90 percent of all decorative laminate is sold to or specified by professionals such as distributors, furniture manufacturers and designers.
"It is ridiculous to suggest that these professionals do not know there are many brands of laminate and that Formica is both a trademark and a company name," Formica claims in a brochure entitled: "The FTC Attack on Formica: A Challenge to Free Enterprises."
"Formica Corp. is being punished for marketing success and that alone," the company states.
American Cyanamid, the parent company of Formica Corp., has said it does not know what the economic impact would be if the company lost its trademark, nor does it know how much it has spent to try and keep it.
The names of Formica's competitors, by the way, are Dart Industries' Wilson-Art, Chagrin Valley's Nevamar and Westinghouse's Micarta.
None of those companies, however, appears concerned that its trademark is in jeopardy.