or other authority, or any official connection with such Federal, State, or other authority, including random sample, standard laying, or other test results; or

(d) Any other matter relating to the poultry hatching or breeding business or to any of its products-which, directly or by implication, is false, misleading, or deceptive in any respect.

NOTE: The inhibitions of this section are to be understood as applicable to representations or implications, such as "A," "AA,” "AAA," etc., that any industry product conforms to the requirements of any grade or quality standard when (1) no such grade or quality standard exists, or (2) no disclosure of the identity of such standard, whether private, official, or otherwise, is made, or (3) when the member's product does not conform to such grade or quality standard. [Rule 1]

§ 36.2

Deceptive concealment of material facts.

(a) In advertising, offering for sale, or selling industry products, it is an unfair trade practice for any member of the industry to fail to disclose any material facts relating to such products when such failure has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers of such products.

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

(1) Filling chick orders with chicks which are wholly or predominantly cockerels, or are of a different stock or quality than offered for sale, without having disclosed this fact to the purchaser prior to sale.

(2) Shipping chicks upon dates different from those specified or implied in the orders without disclosure or notice of such changes prior to shipment.

(3) Representing that the parent flocks of chicks contain certain desirable types of males or females without disclosure of the approximate percentage or proportion of the flocks accounted for by such types. [Rule 21

§ 36.3 Deceptive claims relating to National Poultry Improvement Plan or National Turkey Improvement Plan. (a) In connection with the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to represent or imply that he is a participant in the

National Poultry Improvement Plan1 or the National Turkey Improvement Plan,1 when such is not the fact.

NOTE: In order to avoid deception of purchasers or prospective purchasers of industry products, all industry members discontinuing participation in the National Poultry Improvement Plan, or the National Turkey Improvement Plan, shall immediately remove and discontinue the use of all signs, promotional literature, labels, and other representations or indications that they are still participating in such Plan or Plans.

(b) In connection with the sale, offering for sale, or distribution of industry products, it is an unfair trade practice to use any of the terminology of the National Poultry Improvement Plan or the National Turkey Improvement Plan (such as "U.S. Approved," "U.S. Pullorum-Typhoid Clean,” etc.), or any abbreviation or simulation of such terminology, as descriptive of industry products to which such terms are not fully applicable in accordance with the requirements therefor specified in such Plans. [Rule 3]

§ 36.4

Misrepresentation concerning a breeder's name, trade name, strain or combination of strains, or other breeding combination, etc.

(a) It is an unfair trade practice to make false or deceptive representations, directly or by implication, in advertising or otherwise, concerning a breeder's name, trade name, strain or combination of strains or other breeding combination, or the progeny or stock of such breeding combination.

(b) It is also an unfair trade practice to represent, directly or by implication, through advertising or otherwise, chicks or hatching eggs as being of a particular breeder's pure strain, strain cross, breed cross, or other breeding combination, unless such chicks or hatching eggs are from flocks composed of birds hatched from eggs produced under the direct supervision of the breeder or a multiplier designated by the breeder.

NOTE: (1) The term "Strain" as used in this section means poultry bearing a given name produced through at least five generations of closed flock breeding.

(2) The term "Stock" is used in this section to identify the progeny of a specific breeding combination of chickens or turkeys.

1 These Plans have been promulgated by the United States Department of Agriculture and are contained in the Code of Federal Regulations, 9 CFR, Parts 145, 146, and 147.

These breeding combinations may include pure strains, strain crosses, breed crosses, or other breeding combinations.

[Rule 4] § 36.5

Deceptive claims respecting freedom or immunity from disease.

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to advertise, describe, or otherwise represent or imply, that chicks or hatching eggs are free from any or all diseases when such is not the fact.

NOTE: At present there exist no tests, inoculations, vaccinations, etc., which poultry pathologists consider adequate to assure that chicks or hatching eggs are completely and absolutely free from any or all poultry diseases. Accordingly, such claims as "disease free," "pullorum free," or "100 percent pullorum free," must not be made by industry members.

Requirements applicable to claims and representations respecting tests, inoculations, vaccinations, and treatments for poultry disease are set forth in paragraphs (b) and (c) of this section.

(b) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to advertise, describe, or otherwise represent or imply, that chicks or hatching eggs come from birds or flocks which have been tested for pullorum, typhoid, and/or other disease or diseases, when:

(1) Such birds or flocks have not been tested for the particular disease or diseases during the past twelve months; or (2) The tests applied are not recognized by poultry pathologists as effective;

or

(3) The methods used in making the tests, the number, timing, or manner of applying them, the qualifications of the person or persons making them, or other attendant circumstances, are not such as to assure the effectiveness of the tests.

(c) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to advertise, describe, or otherwise represent or imply, that chicks have been vaccinated, inoculated, or treated for any disease or diseases, when such is not the fact, or when the vaccination, inoculation, or treatment applied is of a kind not recognized by poultry pathologists as effective, or when the methods used, the timing or the extent thereof, the qualifications of the person or per

sons making the same, or other attendant circumstances, are not such as to assure their effectiveness. (See the first paragraph of the note following paragraph (a) of this section, and see also paragraph (b) of this section.) [Rule 5]. § 36.6 Deceptive representations as to performance, earnings, etc.

It is an unfair trade practice to make false or deceptive statements or representations, directly or by implication, in advertising or otherwise, regarding performance, opportunities for making money, or actual or probable earnings, income, profits, etc.

NOTE: In the interest of avoiding deception of purchasers or prospective purchasers, industry members desiring to make use, in advertising or otherwise, of any facts or figures published in the official reports concerning random sample, standard laying, or other tests shall state or otherwise employ such facts or figures only in a full, adequate and nondeceptive manner. [Rule 6]

(a) Misrepresentation as to yields of eggs. It is an unfair trade practice to represent, directly or by implication, through advertising or otherwise, that high yields of eggs are received from all or any flocks of a particular seller or producer when such is not the fact.

(b) Misrepresentation as to chicks from hens with purported high egglaying records. It is an unfair trade practice to represent, directly or by implication, through advertising or otherwise, that chicks are produced by hens having certain purported high egglaying records when the records of such hens have not been adequately established and the period of time and the method used for computation are not clearly disclosed in the advertising.

(c) Misrepresenting chicks as from high egg-producing stock etc. It is an unfair trade practice to represent, directly or by implication, through advertising or otherwise, that chicks offered for sale are from high egg-producing stock or blood lines when such fact has not been established, or when such representation is otherwise false, misleading, or deceptive. [Rule 7]

§ 36.8 Misrepresenting chicks as from high-performance stock.

It is an unfair trade practice to advertise, describe, or otherwise represent, directly or by implication, that chicks sold or offered for sale are the progeny of or are descended from high-performance stock, when such is not the fact. [Rule 8]

§ 36.9 Misrepresentation as to terms "crossbred," "inbred line," "incrossbred," "hybrid,” etc.

(a) It is an unfair trade practice to make false or deceptive statements or representations, directly or by implication, in advertising or otherwise, relative to the breeding incident to the production of chicks or hatching eggs, or to use any term or designation as descriptive thereof which conveys or tends to convey an erroneous impression as to the kind or extent of the breeding employed.

(b) For the purpose of this section and in its application, the following terms are acceptable when used in accordance with their respective definitions:

(1) "Crossbred". The first generation poultry, chicks, or eggs produced by crossing two different breeds or varieties, first-generation combinations

or

breeds or varieties.

of

(2) "Inbred line". A group of inbred chicks resulting from breeding closely related poultry and in which the individuals in question have an average coefficient of inbreeding of 37.5 percent (equivalent to two generations of brother-sister matings).

(3) "In-crossbred". The first generation poultry, chicks, or eggs produced by crossing two inbred lines, first-generation combinations of inbred lines, or the crossing of an inbred line with a firstgeneration combination of inbred lines.

NOTE: To some purchasers and prospective purchasers of chicks and hatching eggs, the term "hybrid" implies application of genetic principles similar to those employed in the production of hybrid seed corn, and to others the application of a selective system of breeding dissimilar to that employed in the production of hybrid seed corn.

The term is generally regarded as denoting a superior quality and vigor resulting from systematic breeding and shall only be used to describe chicks and hatching eggs having such superior quality and vigor.

In the interest of avoiding deception of purchasers and prospective purchasers, industry members desiring to use the term "hybrid" as descriptive of such chicks and hatching eggs shall, in addition, confine the

use thereof to established industry products obtained by crossing different inbred lines, or by crossing different breeds, varieties, strains, or lines, and shall qualify the word "hybrid" by stating in immediate conjunction therewith the type of cross used in the production of the industry product, such as "inbred line-cross hybrid" or "inbred hybrid," "line-cross hybrid," etc.

Industry members will be expected to maintain adequate breeding records showing the establishment of the advertised product. [Rule 91

§ 36.10 Misuse of term "dominant white," new breed of poultry.

It is an unfair trade practice to represent, through advertising or otherwise, directly or by implication, chickens as "dominant white," or by similar expressions, unless such chickens, when used as either male or female parents in combination with any chickens, produce only progeny that is generally predominantly white in color: Provided, however, That when the surface color of such progeny is other than white, the under color must be white. [Rule 101

§ 36.11 Misrepresentation respecting new breed of poultry.

(a) It is an unfair trade practice to offer for sale, sell, advertise, describe, or otherwise represent, directly or by implication, any chicks or other poultry as being a new breed or as being the progeny of a new breed, when such is not the fact.

(b) This section shall not be construed as preventing chicks or other poultry from being described as a new breed if and when they meet the following definition or specification for a new breed as proposed by the industry and no deception is practiced in relation to such designation or description.

New breed. A group of birds which are of similar size, shape, and skin color and differ from existing breeds in these characters or in the combination of these characters, and the varieties within the breed have similar plumage color and pattern, comb type, and other distinguishing physical characteristics, all of the characteristics of the breed and variety being demonstrated as having been reproduced with a high degree of uniformity. [Rule 11]

effect of misleading or deceiving purchasers or prospective purchasers into the belief that the prices quoted for such chicks are the prepaid or delivered prices when such is not the fact.

(b) It is an unfair trade practice, by failing correctly to inform customers, or by other deception, to cause purchasers to believe that transportation costs will not be charged against them in c.o.d. charges or otherwise, when such is not true in fact. [Rule 12]

§ 36.13 Misrepresenting offer as “special," etc.'

It is an unfair trade practice to represent an offer as "special" with reference to price, terms, or otherwise, when it is in fact a regular offer; or otherwise to use the term "special" or any term or word of similar import, as descriptive of any offer, in a manner, or under conditions, having the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the true nature of the offer. [Rule 13] § 36.14 Deceptive testimonials.

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to use or cause to be used, any testimonial which is false or misleading in any material respect. Among the kinds of testimonials prohibited by this section are the following:

(a) Testimonials containing inaccurate statements as to results obtained from industry products of any certain kind or type; or

(b) Testimonials regarding results obtained from industry products purchased from a certain seller or sellers which, by reason of inaccurate statements therein contained, or absence of disclosure of relevant facts, have the capacity and tendency or effect of deceiving purchasers or prospective purchasers of industry products. [Rule 14]

§ 36.15 Defamation of competitors or false disparagement of their prod

conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the products of competitors in any respect, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice. [Rule 15]

§ 36.16 False or misleading price quotations, etc.

It is an unfair trade practice for any member of the industry to publish or circulate price quotations, price lists, or terms or conditions of sale or purchase, which directly, or by reason of concealment of any material limitations, have the capacity and tendency or effect of deceiving purchasers or prospective purchasers. [Rule 16]

§ 36.17 Deception by means of "bogus independents,” “chick outlets,” etc.

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

(a) To represent, directly or by implication, that a certain chick outlet is independent of, or in competition with, said member, when such is not the fact;

or

(b) To fail to disclose that any such outlet is not independent of, or not in competition with, said member, under circumstances where the failure to make such disclosure has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers. [Rule 17]

§ 36.18

99

Misuse of words "hatchery," "chickery," "chick nursery," "farm, "poultry farm," "breeding farm," and related representations.

In the sale, offering for sale, or distribution of chicks, it is an unfair trade practice for any member of the industry, by trade or corporate name, through advertising or otherwise:

(a) To hold himself out as owning or operating a hatchery, chickery, chick nursery, poultry farm, poultry breeding business, or as being the producer of chicks, or as operating incubators or producing chicks under claimed or specified conditions, when such is not the fact; or

(b) To use the terms "hatchery," "farm," "poultry farm," "breeding farm," or similar representations, in such manner as to have the capacity and tendency or effect of misleading or deceiving puichasers or prospective purchasers into

the belief that the chicks have been produced in a hatchery or on a farm, poultry farm, or breeding farm, of said industry member, when such is not the fact.

NOTE: Nothing in this section, however, shall be construed as prohibiting an industry member, who actually owns and operates a farm primarily devoted to the production of chicks, from selling, offering for sale, or distributing, under a trade, corporate, or other name containing the word “farm,” chicks produced from flocks of cooperating farms along with chicks produced on such member's own farm, if and when the industry member has and exercises direct supervision and control over all operations and conditions material to the quality, health, and vigor of all said chicks, including selection of the breeding stock of which such chicks are the progeny, and all breeding and disease-control practices. [Rule 18]

§ 36.19 Guarantees, warranties, etc.

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member:

(1) To represent that any industry product is guaranteed unless, in close conjunction with such representation, the identity of the guarantor, the extent and nature of the guarantee, and any material conditions or limitations relating to the liability of the guarantor under the guarantee, are adequately and nondeceptively disclosed; or

(2) To offer or use any guarantee respecting an industry product under which the guarantor fails to observe his obligations; or

(3) To offer or use any guarantee which is otherwise deceptive or unfair.

(b) 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.

NOTE: The Commission on April 26, 1960, adopted "Guides Against Deceptive Advertising of Guarantees," copies of which will be mailed to industry members upon request. Such Guides supply specific guidance respecting guarantee representations and are to be considered as supplementing this section.

[Rule 19]

§ 36.20 Fictitious prices.3

It is an unfair trade practice to sell or offer for sale industry products at prices purported to be reduced from what are in fact fictitious prices, or to sell or offer for sale such products at a purported reduction in price when such purported reduction is in fact fictitious or is otherwise misleading or deceptive. [Rule 20]

§ 36.21

Substitution of products.

(a) It is an unfair trade practice to advertise, describe, or otherwise represent, directly or by implication, any industry product as being of a certain stock, grade, sex, trade name, or quality, and, upon receipt of orders for it, filling the same with any other industry product of a different stock, grade, sex, trade name, or quality, without first obtaining the consent of the purchaser to such substitution.

(b) It is also an unfair trade practice, upon receiving orders for industry products of a certain stock, grade, sex, trade name, or quality, to fill such orders with a different stock, grade, sex, trade name, or quality, without first obtaining the consent of the purchasers to such substitution. [Rule 21]

§ 36.22 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 purchasers or prospective purchasers, as descriptive of any product 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" product 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 product required to be purchased in order to obtain the "free" product or service, the offerer (1) increases the ordinary and usual price of such industry product, or (2) reduces its quality, or (3) reduces the quantity or size thereof.

3 See footnote to § 36.13.