Concealed subsidiary, fictitious collection agency, etc.

§ 13.2370 Connections ments with others.

and

§ 13.2375 Foreign status.

§ 13.2380

arrange

Government connection.

§ 13.2480

Devices for lottery selling.

In merchandising.

Subpart-Using Patents, Rights or Privileges Unlawfully

§ 13.2485 Using patents, rights, or privileges unlawfully.

§ 13.2490 Diverting trade in, or exploiting sale of, unpatented products. Fixing prices through licensing agreements exceeding legitimate patent monopoly.

§ 13.2495

§ 13.2500 Fixing resale price of unpatented part, in patent combination sys

tem.

§ 13.2505 Pooling and controlling patents and patent rights restrictively. § 13.2510 Refraining, concertedly, from challenge of one another's.

§ 13.2515 Securing, improperly, noncontesting agreements, etc.

AUTHORITY: The provisions of this Part 13 issued under sec. 6(g), 5, 38 Stat. 722, 719, sec. 2 (a), (c), (d), (e), 49 Stat. 1526, 1527: 15 U.S.C. 46, 45, 13 (a), (c), (d), (e).

SOURCE: The provisions of this Part 13 appear at 24 F.R. 10287, Dec. 19, 1959, unless otherwise noted.

NOTE: In the revision of Title 16 as of January 1, 1960, the listing of individual actions under each section of Part 13 is discontinued. For Federal Register citations to cease and desist orders issued under the various sections of this part from January 1, 1949 through December 31, 1963, see List of Sections Affected, 1949-1963, and from January 1, 1964 to the present, see the List of Sections Affected at the end of this volume. Commencing with the list for 1959, the Federal Trade Commission docket numbers are included. The notation "o" following a docket number indicates an opinion; "c.o." indicates a consent order.

Complete listings of all firms and individ uals named in cease and desist orders are carried in the Annual Indexes to the Federal Register. For public information services of the Federal Trade Commission, see § 1.132 of this title.

§ 14.3

Tire advertising and labeling guides.

(a) "Industry Product" and "Industry Member" defined. As used in this section, the terms "Industry Product" or "Product" shall mean pneumatic tires for use on passenger automobiles, station wagons, and similar vehicles, or the materials used therein. The term "Industry Member" shall mean: All persons or firms who are engaged in the manufacture, sale or distribution of industry products as above defined whether under the manufacturer's or a private brand; and the manufacturers of passenger automobiles, station wagons, and similar vehicles for which industry products are provided as original equipment.

(b) Use of guide principles. The following general principles will be used in determining whether terminology and other direct or indirect representations subject to the Commission's jurisdiction regarding industry products conform to

laws administered by the Commission. (c) Tire description. (1) The purchase of tires for a motor vehicle is an extremely important matter to the consumer. Not only are substantial economic factors involved, but in most instances the purchaser will entrust the safety of himself and others to the performance of the product.

(2) To avoid being deceived, the consumer must have certain basic information. Certain of this information should be provided before the purchaser makes his choice but other is essential throughout the life of the tire.

(i) Disclosure before the sale. The following information should be disclosed in point of sale material which is prominently displayed and of easy access, on the premises where the purchase is to be made in order to apprise the consumer:

(a) Load-carrying capacity of the tire. This information is essential to assure the purchaser that the tires he selects are capable of safely carrying the intended load. This information should consist of the maximum load-carrying capacity as related to various recommended air pressures and may include data which indicates the effect such varying pressures will have on the operation of the automobile. All such information shall be based on actual tests utilizing adequate and technically sound procedures. The test procedures and results shall be in writing and available for inspection.

(b) Generic name of cord material. Different cord materials can have performance characteristics that will affect the consumer's selection of tires. These various characteristics are widely advertised, and the consumer is aware of the distinctions. Without a disclosure of the generic name of the cord material, the consumer is unable to consider this factor in his purchase.

(c) Actual number of plies. Consumers have preference for industry products of a stated type of construction (e.g., 2 ply v. 4 ply). Without adequate disclosure the consumer is denied the basis for considering this factor in his selection.

NOTE: Where the tire is of radial construction the ply count disclosure will be satisfied by the statement "radial ply."

(ii) Disclosure on the tire. The following information should be clearly dis

closed in a permanent manner on the outside wall of the tire:

(a) Size. Size is extremely important not only to insure that the tire will fit the vehicle wheel, but because it also is a determining factor as to the load-carrying capacity of the vehicle.

(b) Whether tire is tubeless or tube type.

(c) Actual number of plies.

NOTE: Where the tire is of radial construction the ply count disclosure will be satisfied by the statement "radial ply."

(iii) Other disclosures.-(a) Generic name of cord material used in ply. A disclosure of the generic name of the cord material used in the ply of the tire should be made on a label or tag prominently displayed on the tire itself, and affixed in such a fashion that it cannot be easily removed prior to sale.

In

(b) Load-carrying capacity and inflation pressure. One of the most important factors in obtaining tire performance is proper care and use. cluded in such care is inflating the tire to the required level as related to loadcarrying capacity and use. To insure that such pressures are maintained by the user and the tire is not overloaded beyond its safe capacity, a table or chart should be provided for retention by the purchaser. This will apprise the purchaser of the load-carrying capacity of the tires as related to the range of recommended air pressures and use. It may also supply data which indicate the effect such varying pressures will have on the operation of the automobile.

NOTE: Automobile manufacturers who provide tires as original equipment with new automobiles should incorporate such information in the owner's manual given to new car purchasers. To permit the car owner to calculate for himself the proper size tires for his car, the owner's manual should also contain the following information: (1) The curb weight of the empty vehicle, and the distribution of the weight, in pounds, on each tire; (2) The total weight of the vehicle when loaded to its designed capacity (e.g., for a six passenger car, the weight of the car when loaded with six passengers and 240 pounds of baggage) and the distribution of such weight, in pounds, on each tire.

[Guide 11

(d) Designations of grade, line, level, or quality. (1) There exists today no industrywide, government or other accepted system of quality standards or grading of industry products. Within

the industry, however, a variety of trade terminology has developed which, when used in conjunction with consumer transactions, has the tendency to suggest that a system of quality standards or grading does in fact exist. Typical of such terminology are the expressions "line," "level," and "premium." The exact meaning of such terminology may vary from one industry member to another. Therefore, the "1st line" or "100 level" or "premium" tire of one industry member may be grossly inferior to the "1st line" or "100 level" or "premium" tire of another member since in the absence of an accepted system of grading or quality standards, each member can determine what "line," "level," or "premium" classification to attach to a tire.

(2) The consumer does not understand the significance of the absence of accepted grading or quality standards and is likely to assume that the expressions "line," "level," and "premium" connote valid criteria. Since the consumer is likely to misinterpret the meaning of such terminology, he may be deceived into purchasing an inferior product because it has been given such designation.

(3) In the absence of an accepted system of grading or quality standards for industry products, it is improper to represent, either through the use of such expressions as “line,” “level,” “premium” or in any other manner, that such a system exists, unless the representation is accompanied by a clear and conspicuous disclosure:

(i) That no industrywide or other accepted system of quality standards or grading of industry products currently exists, and

(ii) That representations as to grade, line, level, or quality, relate only to the private standard of the marketer of the tire so described (e.g., "XYZ first line").

(4) Additionally, products should not be described as being "first line" unless the products so described are the best products, exclusive of premium quality products embodying special features, of the manufacturer or brand name distributor applying such designation.

[Guide 2]

(e) Deceptive designations. In the advertising or labeling of products, industry members should not use designations for grades of products they offer to the public:

(1) Which have the capacity to deceive purchasers into believing that such