the name of the foreign country from which it came, where the failure to make such disclosure has the capacity and tendency or effect of deceiving purchasers or prospective purchasers. § 34.14 Exclusive deals.

It is an unfair trade practice for any member of the industry engaged in commerce,1 in the course of such commerce, to make a sale or contract for sale of any industry product, for use, consumption, or resale within any place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the purchaser thereof shall not use or deal in the goods of a competitor or competitors of the seller, where the effect of such sale or contract for sale, or such condition, agreement, or understanding, may be substantially to lessen competition or tend to create a monopoly in any line of commerce.

§ 34.15 Tie-in sales; 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. § 34.16 Deceptive pricing.

(a) It is an unfair trade practice to represent, in advertising or otherwise, that the price of an industry product has been reduced from a price which, in fact, is a fictitious price; or that the price is a wholesale, introductory, or special price, when it is in fact the regular selling price of the product; or that the regular price of a product is higher than is actually the fact; or otherwise to represent falsely or

1 As used in this section, the word "commerce" means "trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States."

deceptively the past or current price of an industry product.

(b) It is also an unfair trade practice to make a comparison, in advertising or otherwise, between the price of an industry product offered for sale and the price of a comparable industry product obtainable from competitive sources, unless the comparison is made in the same grade and size of product and in the same general market area, or unless the differences in grade, size, and market area are clearly stated.

§ 34.17 Enticing away employees of competitors.

It is an unfair trade practice for any member of the industry wilfully to entice away employees of salescontact personnel of competitors with the intent and effect of thereby unduly hampering or injuring competitors in their business and destroying or substantially lessening competition; provided, that nothing in this section shall be construed as prohibiting such persons from seeking more favorable employment, or as prohibiting employers from hiring or offering employment to employees of a competitor in good faith and not for the purpose of inflicting injury on such competitor.

§ 34.18 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 con

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

§ 34.19 Use of lottery schemes.

The offering or giving of prizes, premiums, or gifts in connection with the sale or distribution of industry products, or as an inducement thereto by any method which involves a lottery or scheme of chance, and the sale or distribution of industry products by any method or plan which involves a lottery or scheme of chance, are unfair trade practices.

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

It is an unfair trade practice to defame 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, policies, or services. § 34.21

Prohibited forms of trade restraints (unlawful price fixing, etc.).2

It is an unfair trade practice for any member of the industry, either directly

2 The inhibitions of this section are subject to Public Law 542, approved July 14, 1952, 66 Stat. 632 (the McGuire Act) which provides that with respect to a commodity which bears, or the label or container of which bears, the trade-mark, brand, or name of the producer or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or distributed by others, a seller of such a commodity may enter into a contract or agreement with a buyer thereof which establishes a minimum or stipulated price at which such commodity may be resold by such buyer when such contract or agreement is lawful as applied to intrastate transactions under the laws of the State, Territory, or territorial jurisdiction in which the resale is to be made or to which the commodity is to be transported for such resale, and when such contract or agreement is not between manufacturers, or between wholesalers, or between brokers, or between factors, or between retailers, or between persons, firms, or corporations in competition with each other.

or indirectly, to engage in any planned common course of action, or to enter into or take part in any understanding, agreement, combination, or conspiracy, with one or more members of the industry, or with any other person or persons, to fix or maintain the price of any goods or otherwise unlawfully to restrain trade; or to use any form of threat, intimidation, or coercion to induce any member of the industry or other person or persons to engage in any such planned common course of action, or to become a party to any such understanding, agreement, combination, or conspiracy. § 34.22 Prohibited discrimination.1

(a) Prohibited discriminatory prices, 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, and are not purchased by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit, as supplies for their own use.

(2) That nothing contained in this paragraph 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.

1 See footnote to § 34.14.

(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.

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

(5) That nothing contained in this section shall prevent the meeting in good faith of an equally low price of a competitor, or the services or facilities furnished by a competitor. (See paragraphs (c) and (d) of this section.)

(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 where such intermediary is acting in fact for 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 furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all competing 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.

an

(f) Purchases by U. S. Government; applicability of Robinson-Patman Antidiscrimination Act to same. In opinion submitted to the Secretary of War under date of December 28, 1936, the U. S. Attorney General advised that the Robinson-Patman Antidiscrimination Act "is not applicable to Government contracts for supplies." (38 Opinions, Attorney General 539.)

§ 34.23 Aiding or abetting use of unfair trade practices.

It is an unfair trade practice for any person to aid, abet, coerce, or induce another, directly or indirectly, to use or promote the use of any unfair trade practice specified in this part.

As used in these rules the terms "Industry Member" and "Industry Product" shall have the following meaning:

(a) Industry member. Any person, firm, corporation or organization engaged in the manufacture, fabrication, processing or sale of industry products, including screen or hand printers importers, wholesalers, distributors, jobbers, retail dealers, decorating contractors, decorators and paperhangers.

(b) Industry products. Wall coverings composed in whole or in part of basic materials such as, but not limited to, paper, cloth, plastics, glass or combinations thereof, which are by custom supplied in rolls or sheets and sold to consumers through retail wall covering outlets, and which are applied with an adhesive to produce a permanent or semi-permanent bond to the surface to which they have been applied. Excluded as products of the industry are ceramic and plastic tiles and commercial heavy duty wall coverings which are ordinarily sold by the manufacturers and/or distributors through building supply concerns to installers, contractors, and builders.

§ 35.1 Misrepresentation

acter of business.

to char.

It is an unfair trade practice for any person to represent, directly or indirectly, through the use of any word or term in his corporate or trade name, in his advertising, or otherwise, that he is a manufacturer, machine, screen or hand printer, processor, converter, wholesaler, jobber, dealer contractor, decorator or importer of wall coverings or that he owns or controls a factory making or processing such products, or has connections abroad through which

imports are secured, or maintains offices abroad, when such is not the fact, or in any other manner to misrepresent the character, extent, volume, or type of his business. [Rule 1]

§ 35.2 Misrepresenting products as conforming to standards.

In connection with the sale or offering for sale of wall coverings it is an unfair trade practice to represent, through advertising or otherwise, that such wall coverings conform to any standards recognized in or applicable to the industry when such is not the fact. [Rule 2] § 35.3 Guarantees, warranties, etc.

(a) Advertising of products shall not contain representations that a product is "guaranteed" without clear and conspicuous disclosure of:

(1) The nature and extent of the guarantee, and

(2) Any material conditions or limitations in the guarantee which are imposed by the guarantor, and

(3) The manner in which the guarantor will perform thereunder, and

(4) The identity of the guarantor.

(b) Guarantees shall not be used which under normal conditions are impractical of fulfillment or which are for such a period of time or are otherwise of such nature as to have the capacity and tendency of misleading purchasers or prospective purchasers into the belief that the product so guaranteed has a greater degree of serviceability, durability or performance capability in actual use than is true in fact. [Rule 3]

35.4 Imperfects, irregulars, etc.

Wall coverings which fall below quality specifications of the manufacturer for his first quality, and which are sold and offered for sale under the same trade name or designation as his first quality, shall be marked "imperfects," or with some other word or term of similar import, so as to prevent deception of purchasers and prospective purchasers as to the quality of such products. The mark or label shall be on or attached to the product, and the immediate package, if any, in which it is sold or offered for sale to consumer purchasers, and the disclosure shall be of such degree of permanency and conspicuousness as to be noticeable upon casual inspection when the wall coverings are offered for sale to consumer purchasers. A similar disclosure shall also be made on invoices,

and in all advertisements relating to the wall coverings. [Rule 4]

§ 35.5 Deceptive use

or imitation or simulation of trade or corporate names, trade-marks, etc.

It is an unfair trade practice for any member of the industry:

(a) To imitate or simulate the trademarks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers; or

(b) To represent by use of any trade name, trade-mark, or other trade designation, that any industry member is a manufacturer, wholesaler or importer when such is not the fact; or

(c) To use any trade name, corporate name, trade-mark, or other trade designation, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers, as to the name, nature, or origin of any product of the industry, or of any material used therein, or which is false, deceptive, or misleading in any other material respect. [Rule 5]

§ 35.6 Commercial bribery.

It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money or anything of value to agents, salesclerks, employees, or representatives of customers or prospective customers of an industry member, without the knowledge of the employers or principals of such agents, salesclerks, employees, or representatives, as an inducement:

(a) To influence such employers or principals to purchase or contract to purchase wall coverings manufactured or sold by the industry member; or

(b) To influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors;

or

(c) For the purpose of causing said agents, salesclerks, employees, or representatives to push and promote the resale of the industry member's wall coverings over competing products being offered for resale by the employers or principals of said agents, salesclerks, employees, or representatives. [Rule 61 § 35.7 False invoicing.

Withholding from or inserting in invoices or sales slips by an industry mem

ber, any statement 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 or sales slips, used with the capacity and tendency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, in any material respect, is an unfair trade practice. [Rule 7]

§ 35.8 Substitution of products.

It is an unfair trade practice for a member of the industry to make unauthorized substitutions of wall coverings where such substitutions have the capacity and tendency or effect of misleading or deceiving purchasers, by:

(a) Shipping or delivering wall coverings which do not conform to samples submitted, to specifications (in bids or otherwise) 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 substitutions. [Rule 8] § 35.9 Defamation of competitors or false disparagement of their prod

ucts.

It is an unfair trade practice for any industry member:

(a) To defame competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representation; or

(b) To falsely disparage competitors* wall coverings as to grade, quality, or method of manufacture and distribution, or in any other respect; or

(c) To falsely disparage the business methods, selling prices, values, credit terms, policies, services, or conditions of employment, of competitors.

NOTE: Nothing in this section shall be construed as preventing the full, fair, and nondeceptive comparison, by demonstration or otherwise, of competitors' wall coverings with those of another industry member before purchasers or prospective purchasers. [Rule 91

§ 35.10 Unfair threats of infringement suits.

The circulation of threats of suit for infringement of patents, trade-marks, or copyrights among competitors or cus