multiplicity of items of different fiber composition, it is not feasible to have the fiber content of the different numbers or items set out on the face or back of the invoice or otherwise specifically listed therein, a statement in lieu of such specific listing of fiber content in the invoice may be set forth therein to the effect that the seller warrants each and every item coming under these rules and covered by such invoice to be properly marked and labeled as to content in full conformity with the provisions of applicable trade practice rules: Provided, Such products are labeled and marked properly as to fiber content, yardage, and in such other respects as required by these rules: And provided further, That no false or misleading designations or representations are used, nor any other deception, direct or indirect, is practiced in or by means of such invoice.

(b) The following is an example of such warranty statement which may be used under this section when the foregoing conditions are met:

The seller hereby warrants that the ribbons covered by this invoice are clearly and truthfully labeled and marked as to fiber content and yardage. Truthful labels or marks disclosing such information should not be removed or concealed.

(c) In invoices covering any ribbons which are "cut-edge," or "pasted-back," or "seconds," the warranty statement in the invoice under this section shall also include a warranty that the ribbons are properly marked in these respects, as for example:

The seller hereby warrants that the ribbons covered by this invoice are clearly and truthfully labeled and marked as to fiber content and yardage, and as to their being "cut-edge," "pasted-back,” or "seconds,"

where such is the fact. Truthful labels or marks disclosing such information should not be removed or concealed.

Nothing in this section shall be construed as providing for the omission of disclosure in the invoice of yardage or of the fact that products are cut-edge," "pasted-back," or "seconds," as the case may be.

(b) For purposes of this section, "Seconds" shall be considered as including all ribbons which are defective by reason of containing flaws, irregularities, or imperfections, in material, construction or finish, or which are otherwise not of first quality.

(c) The marking provided for in this section shall be made in a conspicuous and nondeceptive manner on the spool, bolt, card, or other form of immediate packaging of the ribbons, or on the ribbons themselves, whichever method of marking is appropriate under the circumstances, and with sufficient permanency as to carry through the channels of trade to the ultimate consumer in clearly legible condition. Letters which are of full face type and at least 14 inch in height may be used for this purpose.

(d) It is an unfair trade practice to fail or refuse to make the disclosure provided for in this rule in respect of ribbons which are "Seconds," or to fail or refuse to disclose the presence in ribbon products of any cuts, tears, burns, or that the product is otherwise damaged, with the capacity and tendency or effect of thereby misleading or deceiving the purchasing or consuming public.

§ 138.18 Promoting the use of deceptive marketing methods in the sale of cutedge ribbon products.3

In the course of, or in connection with the marketing, offering for sale, sale, or distribution of ribbon products in the trade and to the consuming public, it is an unfair trade practice, directly or indirectly, to cause, aid, abet, or promote the display, offering for sale, or sale of "cut-edge" ribbon products, through any means or device, or under any conditions or circumstances, which have the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public; as for example,

(a) By using the device of removing "cut-edge" ribbon products from their packages and displaying them for sale in retail stores without mark or sign plainly informing the purchaser that such products are "cut-edge," with the capacity and tendency or effect referred to above;

or

(b) By using the device of intermingling "cut-edge" and "woven-edge" ribbons in such manner as to mislead or deceive the purchasing public; or

(c) By using any other means or deIvice which involves the deceptive con

cealment or nondisclosure of the fact that such ribbon products are "cut-edge," with the deceptive capacity and tendency or effect mentioned.

NOTE: To promote and facilitate observance of this section, it is deemed proper practice for manufacturers and others marketing "cut-edge" ribbon products for resale in retail stores to supply their customers with counter markers and signs clearly indicating that the ribbon products displayed at such counters are "cut-edge" and to otherwise assist in making such disclosure and segregation as is necessary to avoid deception and to fully inform the purchasing public.

GROUP II

§ 138.101 Unwarranted return of merchandise.

The practice, by members of the industry, of selling ribbons and later permitting the purchaser to return the same for credit or refund of purchase price, without just cause, creates waste and loss, increases the cost of doing business to the detriment of both the industry and the public, and is condemned by the industry, subject, however, to requirements and limitations set forth in the provisions of Rule 14 (§ 138.14) Group I, and subject also to the general limitation that members of the industry shall not engage in any combination or conspiracy in restraint of trade or use any other illegal methods in the regulation, control or prevention of the return of merchandise.

of

§ 139.1 Misrepresentation as to character of business.

It is an unfair trade practice for any person, firm or corporation to represent, directly or indirectly, that he or it is a manufacturer, producer or importer of wines or that he or it owns or controls a vineyard or vineyards wherein are grown the fruits from which his or its wines are produced, when such is not the fact, or in any other manner to misrepresent the character, extent or type of his or its business.

§ 139.2 False invoicing.

Withholding from or inserting in invoices any statements or information by reason of which omission or insertion a false record is made, wholly or in part, of the transactions represented on the face of such invoices, with the effect of thereby misleading or deceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice.

§ 139.3 Substitution of products.

The practice of shipping or delivering products which do not conform to specifications provided for in the contract or order or to representations made concerning such products, without the consent of the purchasers to such changes or substitutions and with the tendency and capacity or effect of misleading or de

ceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice.

§ 139.4 Defamation of competitors or 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 the grade, quality or manufacture of the products of competitiors or of their business methods, selling prices, values, credit terms, policies or services, is an unfair trade practice.

§ 139.5 Imitation of trade-marks, etc.

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

§ 139.6 Procurement of competitors' confidential information by unfair means and wrongful use thereof.

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 in such a manner as to injure said competitor in his business or to suppress competition or unreasonably restrain trade.

§ 139.7 Threats of suit.

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 harrassing or intimidating such customers or prospective customers or of unduly hampering, injuring or prejudicing competitors in their businesses, is an unfair trade practice.

§ 139.8 Inducing breach of contract.

Inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers or their suppliers by any false or deceptive means whatsoever, or interfering with or obstructing the performance of any such contractual duties or services

(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits, etc.,' which effect unlawful price discrimination. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to grant or allow, secretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential, where such rebate, refund, discount, credit, or other form of price differential effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination or with customers of either of them: Provided, however, (1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing contained in this section shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

(3) That nothing contained in this section shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade;

1 Paragraph (a) of § 139.10 shall not be construed as embracing practices prohibited by paragraphs (b), (c) and (d) of this section.

(4) That nothing contained in this section shall prevent price changes from time to time where made in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein wherein such intermediary is acting in fact or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(c) Prohibited advertising or promotional allowances, etc. It is an unfair trade practice for any member of the industry engaged in commerce to pay or contract for the payment of advertising or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold or offered for sale by such member, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or by furnishing, or by contributing to the furnishing of, any services or facilities con

nected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section. (Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528; 15 U. S. C. 13, 13a, 13b, 21a)

§ 139.11

Combination or coercion to fix prices, suppress competition or restrain trade.

It is an unfair trade practice for any person, firm, partnership, corporation or association:

(a) To use, directly or indirectly, any form of threat, intimidation or coercion against any member of the industry to unlawfully fix, maintain or enhance prices, suppress competition or restrain trade; or

(b) To enter into or take part in, directly or indirectly, any agreement, understanding, combination, conspiracy or concert of action with one or more persons, firms, partnership, corporations or associations to fix, maintain or enhance prices, suppress competition or restrain trade.

§ 139.12 Selling below cost.

The practice of selling industry products below the seller's cost, when pursued with wrongful intent of thereby injuring a competitor and where the effect of such practice is to unreasonably restrain trade, tend to create a monopoly, or substantially lessen competition, is an unfair trade practice.

This section is not to be construed as prohibiting all sales below cost, but only such selling below the seller's cost as is resorted to and pursued as a monopolistic practice with the wrongful intent referred to and coupled with the effect of unreasonably restraining trade, tending to create a monopoly or substantially lessening competition. Sales below cost by a competitor not in a sufficiently strong competitive position to produce, and not actually producing, the monopolistic or restraining effect mentioned, do not fall within the inhibitions of this section.

SOURCE: The provisions of this Part 140 appear at 4 F.R. 2708, June 30, 1939, unless otherwise noted.

§ 140.1 False advertising.

Making, or causing to be made or published, any false, misleading or deceptive statement or representation, by way of advertisement or otherwise, concerning the grade, quality, quantity, substance, character, size, material, content, origin, preparation, manufacture or distribution of any industry product, or in any other material respect, is an unfair trade practice.

§ 140.2 Deceptive marking, branding, or devices.

The sale or offering for sale of any product of the industry by any false or deceptive means or device, or the false or deceptive marking or branding of products of the industry, with respect to the grade, quality, quantity, use, material, content, preparation, manufacture or distribution of such products, or in any other material respect, is an unfair trade practice.

§ 140.3 Misrepresentation of vehicle.

The marking, branding, advertising or representing of any industry product as "Pure Putty," "Pure Linseed Putty," "Linseed Oil Putty," or by words, signs, abbreviations or other representations of similar import or meaning, as descriptive of putty the vehicle of which is not composed wholly of pure linseed oil, is an unfair trade practice. Nothing in this section, however, shall be construed as prohibiting the use in such putty of necessary or desirable amounts of drier: Provided, The presence of such drier is fully and nondeceptively disclosed on the label and purchasers of the putty are informed of such content of drier.

§ 140.4 Deceptive concealment.

(a) In the case of wood sash putty, in which mineral or other oils are used in the vehicle as an adulterant or as a substitute for linseed oil, in whole or in part, it is an unfair trade practice to conceal or fail or refuse to disclose the presence of such adulterant or substitute oils, with the capacity and tendency or effect of thereby misleading or deceiving the purchasing or consuming public.

(b) Nondisclosure, or concealment from purchasers, of any ingredient of a product offered for sale or sold as or for putty where such nondisclosure or concealment is practiced by the seller with