Sec.

23.30 Misuse of the Word "Brilliant" and Full Cut."

23.31 Misuse of Term "Clean," Etc. 23.32 Misrepresentation of Weight, "Total Weight."

NOTE: These rules also have application to diamonds which are sold in the loose and unset state.

Category IV. Rules in this part having application to industry products containing pearls, cultured pearls, or imitations thereof:

Sec.

23.33 Misuse of Word "Pearl." 23.34 Misuse of Terms "Cultured Pearl," "Cultivated Pearl," "Seed Pearl," "Oriental Pearl," "Oriental,” “Natura," and "Kultured." 23.35 Misrepresentation as to Cultured Pearls.

NOTE: These rules also have application to pearls, cultured pearls, and imitation pearls sold in the loose (unstrung and unset) state.

Category V. Rules in this part having application to industry products containing rubies, sapphires, and emeralds and other precious or semi-precious stones, and synthetic and imitation stones:

§ 24.3

Defamation of competitors.

The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, with the tendency and capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice.

§ 24.4 Disparagement of competitors' goods.

The false disparagement of the weight, substance, strength, grade, or quality of the goods of competitors, with the tendency and capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice.

25.9.

25.10

25.11 25.12

25.13

25.14

25.15

Deceptive use of seals.

con

Misrepresentation as to character of business.

Deceptive use of trade or corporate

names, trade-marks, etc. Substitution of products.

Misuse of terms "custom built," "made-to-order," etc.

Defamation of competitors or false disparagement of their products. Imitation of trade-marks, trade names, etc.

Coercing purchase of one product as a pre-requisite to the purchase of other products.

Procurement of competitors' confidential information.

Unfair threats of infringement suits. Inducing breach of contract. Commercial bribery.

25.16

25.17

25.18

25.19

25.20

Prohibited forms of trade restraints

Prohibited discrimination.

COMMITTEE ON TRADE PRACTICES

25.201 Industry committee.

AUTHORITY: The provisions of this Part 25 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45.

SOURCE: The provisions of this Part 25 appear at 22 F.R. 1165, Feb. 28, 1957, unless otherwise noted...

§ 25.0

Definitions.

As used in this part, the terms "industry member" and "industry products" shall have the following meanings, respectively:

(a) Industry member. Any person, firm, corporation, or organization engaged in the manufacture, sale, or distribution of industry products as defined in paragraph (b) of this section.

(b) Industry products. Industry products consist of combination storm windows and doors. The storm windows are designed for permanent attachment and are either the self-storing type or the interchangeable type. The windows basically consist of a frame with channels, and glass (or other transparent material) inserts and screen inserts. The storm doors basically consist of a frame and glass (or other transparent material) inserts and screen inserts.

§ 25.1 Deception (general).

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to make any representation which, directly or by implication, or through failure adequately to disclose additional relevant information, has the capacity and tendency to deceive purchasers or prospective purchasers in any material respect, including, but not limited to, representations relating to construction, design, model, origin, manufacture, quality, strength, utility, durability, or life expectance, of such products, or the benefits to be derived from the use thereof, or with respect to the need for repair or maintenance of such products or any service or services to be supplied to purchasers or prospective purchasers of the products.

(b) Among the practices inhibited by this section are the following:

(1) Representing that savings in fuel, or reduction in heat loss, will result from the use of storm windows or doors, when such representation is false or misleading in any material respect.

(2) Representing or implying contrary to fact that a building equipped with combination storm windows and/or doors affords positive protection against prowlers, burglars, or other individuals unlawfully attempting entry into such building.

(3) Representing or implying that combination storm windows or doors will not shrink, rot, rust, warp, twist, sag, or

otherwise become unserviceable, when such is not the fact.

(4) Representing or implying that the metal portions of storm windows and/or doors are made of "aircraft aluminum," or are of extruded metal, when such is not the fact.

(c) The inhibitions of this section are applicable with respect to every species of advertisement or form of representation, whether in a newspaper or other periodical, telephone directory, sales catalog, sales promotional literature, radio or television broadcast, or other media, or whether in the form of a mark, tag, or label on, affixed to, or accompanying, the product.

It is an unfair trade practice for an industry member to offer for sale any industry product when the offer is not a bona fide effort to sell the product so offered.

NOTE: In determining whether there has been a violation of this section, consideration will be given to acts or practices indicating that the offer was not made in good faith for the purpose of selling the advertised product, but was made for the purpose of contacting prospective purchasers and selling them a product or products other than the products offered. Among acts or practices which will be considered in making that determination are the following:

(a) The creation, through the initial offer or advertisement, of a false impression of the grade, quality, make, value, currency of model, size, usability, or origin of the product offered.

(b) The refusal to show, demonstrate, or sell the product offered in accordance with the terms of the offer.

(c) The disparagement, by acts or words, of the product offered.

(d) The showing, demonstrating, and in the event of sale, the delivery, of a product which is unusable or impractical for the purpose represented or implied in the offer.

(e) The refusal, in the event of sale of the product offered, to deliver such product to the buyer within a reasonable time thereafter.

(f) The failure to have available a quantity of the advertised product sufficient to meet reasonably anticipated demands.

It is not necessary that each act or practice set forth be present in order to establish that a particular offer is violative of this section.

§ 25.3 Deceptive pricing.

(a) It is an unfair trade practice for any member of the industry to represent or imply, in advertising or otherwise, that an industry product may be pur

chased for a specified price when such is not the fact; or that an industry product is being offered for sale at a reduced price when such is not the fact; or otherwise to deceive purchasers or prospective purchasers with respect to the price of products offered for sale.

(b) Among the practices inhibited by this section are:

(1) Representing or implying that a stated price is for a complete functional combination storm window or door when in fact the product so priced is deficient as to parts necessary and usual to the proper functioning and appearance of such combination storm window or door (such as hinges, glass, screening, frames, etc.).

(2) Representing or implying that the price of combination storm windows or doors includes certain services, such as installation, adjustments, weather

stripping, etc., or includes parts or accessories such as door closers, grilles, etc., when such is not the fact.

(3) Representing or implying that the selling price of any combination storm window or door has been reduced from what is in fact a fictitious price, or that such price is a reduced or special price when it is in fact the regular selling price of such combination storm window or door, or when over a substantial period of time the alleged "reduced” or "special" price has been the price at which such products customarily have been sold.

(4) Representing or implying that prices applicable only to certain sizes of combination storm windows or doors apply to other or all sizes of such windows or doors.

(5) Making or publishing any false, misleading, or deceptive representation concerning installment sales contracts to be used in the sale of industry products, the terms or conditions of such contracts, the down payment to be required, the rate of interest or financing cost to be charged, or respecting any other matters relative to such contracts.

(6) Representing or implying, contrary to fact, that combination storm windows or doors may be purchased at factory prices ("factory to you," etc.).

(c) It is also an unfair trade practice to sell, or offer for sale, any combination storm window or door at a price less than the cost thereof to the seller as a "loss leader," used in inducing, and sold only in combination with, the purchase of other merchandise and/or services

on which the seller recoups such loss, when this practice has the capacity and tendency or effect of misleading or deceiving the purchasing public.

§ 25.4 Guarantees, warranties, etc.

(a) It is an unfair trade practice to represent, in advertising or otherwise, that any industry product is "guaranteed" unless the nature and extent of such guarantee is conjunctively disclosed and without deceptively minimizing the terms and conditions relating to the obligations of the guarantor.

(b) It is also an unfair trade practice to use, or cause to be used, any guarantee in which the obligations of the guarantor are impracticable of fulfillment, or in respect to which the guarantor fails or refuses to observe his liabilities thereunder.

(c) This section shall be applicable not only to guarantees but also to warranties, to purported guarantees and warranties, and to any promise or representation in the nature of a guarantee or warranty.

§ 25.5

Use of the word "free."

In connection with the sale, offering for sale, or distribution of industry products, it is an unfair trade practice to use the word "free," or any other word or words of similar import, in advertisements or in other offers to the public, as descriptive of an article of merchandise, or service, which is not an unconditional gift, under the following circumstances:

(a) When all the conditions, obligations, or other prerequisites to the receipt and retention of the "free" article of merchandise or service offered are not clearly and conspicuously set forth at the outset so as to leave no reasonable probability that the terms of the offer will be misunderstood; and, regardless of such disclosure:

(b) When, with respect to any article of merchandise required to be purchased in order to obtain the "free" article or service, the offerer (1) increases the ordinary and usual price of such article of merchandise, or (2) reduces its quality, or (3) reduces the quantity or size thereof.

NOTE: The disclosure required by paragraph (a) of this section shall appear in close conjunction with the word "free" (or other word or words of similar import) wherever such word first appears in each advertisement or offer. A disclosure in the form of a footnote, to which reference is

66-033-67--12

made by use of an asterisk or other symbol placed next to the word "free," will not be regarded as compliance.

§ 25.6 Deceptive testimonials or depictions.

It is an unfair trade practice for a member of the industry to use any testimonial of a user of any industry product or of any other person, or to use any picture or depiction thereof, which is false or which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers. § 25.7 Misrepresenting products as conforming to standard.

It is an unfair trade practice to represent, through advertising or otherwise, that any product of the industry conforms to any standard recognized in or applicable to the industry, when such is not the fact.

§ 25.8

Deceptive use of seals.

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to use a seal or insignia of any organization without the authorization of that organization, or to use any seal or insignia which is of such form or design, or contains such wording, as to simulate the seals or insignia which are issued by an organization for use with respect to other products, when the use thereof has the capacity and tendency or effect of deceiving purchasers or prospective purchasers.

NOTE: Seals of approval used by industry members should identify the organization issuing and/or authorizing the use of the seal. Such seal should be based on adequate inspection and tests of the industry member's products and not otherwise contravene the provisions of § 25.1 relating to deception generally.

§ 25.9 Misrepresentation as to character of business.

It is an unfair trade practice for any industry member, in the course of or in connection with the sale of industry products, to represent, directly or indirectly, that he is a manufacturer of industry products, unless he owns and operates or directly controls a factory wherein such products are made, or in any other manner to misrepresent the character, extent, or type of his business.

§ 25.10 Deceptive use of trade or corporate names, trade-marks, etc.

The use of any trade name, corporate name, trade-mark, or other trade designation which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public as to the character, name, nature, or origin of any product of the industry, or of any material used therein, or which is false or misleading in any other material respect, is an unfair trade practice.

§ 25.11 Substitution of products.

It is an unfair trade practice to make an unauthorized substitution of products, where such substitution has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, by

(a) Shipping, delivering, or installing industry products which do not conform to samples submitted, to specifications upon which the sale is consummated, or to representations made prior to securing the order, without advising the purchaser of the substitution and obtaining his consent thereto prior to making shipment or delivery; or

(b) Falsely representing the reason for making a substitution.

§ 25.12 Misuse of terms "custom built," "made-to-order,” etc.

In the sale, offering for sale, or distribution of combination storm windows or doors, it is an unfair trade practice to use the terms "custom built," "made-toorder," or any other words or terms of similar import, as descriptive of any combination storm window or door which has not been made in accordance with specifications as to the size, quality, composition, etc., supplied by or on behalf of the consumer-purchaser prior to the manufacture or assembly of the industry product, as distinguished from a combination storm window or door which is a ready-made or stock product.

§ 25.13 Defamation of competitors or false disparagement of their products.

The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of competitors' products in any respect, or of their business methods, selling prices, values, credit terms, poli

cies, or services, is an unfair trade practice.

§ 25.14

Imitation of trade-marks, trade names, etc.

The imitation or simulation of trademarks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice.

§ 25.15 Coercing purchase of one product as a prerequisite to the purchase of other products.

The practice of coercing the purchase of one or more products as a prerequisite to the purchase of one or more other products, where the effect may be substantially to lessen competition or tend to create a monopoly or unreasonably to restrain trade, is an unfair trade practice. § 25.16 Procurement of competitors' confidential information.

It is an unfair trade practice for any member of the industry to obtain information concerning the business of a competitor by bribery of an employee or agent of such competitor, by false or misleading statements or representations, by the impersonation of one in authority, or by any other unfair means, and to use the information so obtained so as to injure said competitor in his business or to suppress competition or unreasonably restrain trade.

The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of competitors, not made in good faith but for the purpose or with the effect of thereby harassing or intimidating such customers or prospective customers, or of unduly hampering, injuring, or prejudicing competitors in their business, is an unfair trade practice.

§ 25.18 Inducing breach of contract.

(a) Knowingly inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers or their suppliers, or interfering with or obstructing the performance of any such contractual duties or services, under any circumstance having the capacity and tendency or effect of substantially injuring or lessening present or potential competition, is an unfair trade practice.