and under section 12(a) of Commercial Standard CS 47-34, relating to articles having mechanically-applied surface platings of gold alloy; and also to the exemptions applicable thereto enumerated in section 8 of Commercial Standard CS 118-44 (relating to marking of Jewelry and Novelties of Silver) and section 8(a) of Commercial Standard CS 51-35 (relating to marking of articles made of silver in combination with gold). (g) Additional requirements relating to markings. As used in this paragraph, the term "quality marking" means any marking on an industry product which indicates or suggests that the product contains precious metal or an alloy thereof. Included are the words "gold", "karat", "carat", "duragold", "diragold", "noblegold", "goldine", "silver", "sterling", "coin", "coin silver", "platinum", “irridium", "palladium", "ruthenium", "rhodium", and "osmium", and any abbreviation of any such word, whether used alone or in conjunction with such terms as "filled", "plated", "overlay", "electroplated", or any abbreviation

thereof.

(1) Markings to be legible, conspicuous, and of adequate permanency. Quality markings on industry products shall be legible and of such degree of permanency as to remain on the products until consummation of consumer sale thereof. They shall also be of such size and conspicuousness as to likely be observed and read by purchasers and prospective purchasers making casual inspection of the products; provided, however, that when markings of such size and conspicuousness would seriously impair the appearance of the product, they may be of less size and conspicuousness if also appearing on a tag or label attached or affixed to the product in such a manner as to remain thereon until consummation of consumer purchase and of such size and conspicuousness as to be likely observed and read by purchasers and prospective purchasers. When the marking on or attached to the product is concealed or obscured because of the manner in which the product is packaged, or mounted in a container or on a display card, and is offered for consumer sale in such form with consequence of likely deception of purchasers or prospective purchasers as to the true metallic composition of the product, the marking shall also appear on the outside of the packaging, or on the container or display card on which

the product is mounted, in such a position as to be clearly applicable to the product and in such size and conspicuousness as to be likely observed and read by purchasers and prospective purchasers.

(2) Deception by reason of difference in size of letters or words in the markings. Words and letters in quality markings shall not appear in larger type than other words and letters in such markings when such size difference has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the true metallic content of the product. (An example of such improper marking is where the product is marked as gold electroplate with the word "GOLD" in large type and the word "electroplate" in small type.)

(3) When exposed parts are of similar appearance but of different composition. When watch bands contain two or more parts having exposed surfaces of the same composition appearance but which in fact are of different composition, any marking as to the composition of one of such parts shall be accompanied by a disclosure of the composition of the other parts or parts. Thus, when a band has top caps and end pieces of 14 karat yellow gold and bottom caps of yellow gold electroplate, a proper marking would be "14 K. Gold Top Caps and End Pieces. Gold Electroplated Bottom Caps"; and when the top caps and end pieces are 14 karat white gold, and the bottom caps are of stainles steel which has the appearance of white gold, a proper marking would be "14 K. White Gold Top Caps and End Pieces. Stainless Steel Bottom Caps". [Rule 21

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

(1) To use the terms "corrosion proof," "non-corrosive," "rust proof," or any word or term of equivalent import, as descriptive of an industry product, unless all parts thereof will be immune from rust and other forms of corrosion during the life expectancy of the product; or

(2) To use the terms "corrosion resistant," "rust resistant," or any word or term of equivalent import, as descriptive of an industry product unless all parts of the product are of such composition as

to not be subject to material damage by corrosion or rust during the major portion of the life expectancy of the product under normal conditions of use.

(b) Among the metals which may be considered as corrosion (and rust) resistant are:

Pure Nickel.

Gold Alloys of not less than 10 Kt. fineness. Austenitic stainless steels.

[Rule 3] § 60.4

Deception as to origin or place of manufacture.

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice:

(a) To misrepresent the origin or place of manufacture of an industry product or any part thereof; or

(b) Subject to the exemptions hereinafter specified, to fail to adequately disclose to purchasers and prospective purchasers that an industry product, or substantial part thereof is of foreign origin, or has been manufactured, processed, or assembled in a foreign country.

NOTE: The disclosure required by paragraph (b) of this section shall be in the form of a legible marking or stamping on the industry product, or on a label or tag affixed thereto, which is of such degree of permanency as to remain on or attached to the product, in legible form, until consummation of the consumer sale thereof, and of such conspicuousness as to be likely observed and read by purchasers and prospective purchasers making casual inspection of the product; and if such industry product is packaged, or mounted in a container, or on a display card, and is offered for consumer sale in such form, then the marking or stamping shall also appear on the front or face of such packaging, container, or display card, and be so positioned as to clearly have application to the product so packaged or mounted, and shall also be of such degree of permanency as to remain thereon until consummation of consumer sale of the product, and of such conspicuousness as to be likely observed and read by purchasers and prospective purchasers making casual inspection of the product as so packaged or mounted. The disclosure shall name the foreign country of origin or manufacture, an when not applicable to the entire prod

3 Parts which are to be considered as substantial include the skeletons or interliners of the expansion type bands, whether of the entire length of the band or but a substantial portion of such length, and whether caps and end pieces are affixed thereto before or after the importation of such skeletons or interliners.

uct shall specify the part or parts to which it has applicability.

[Note amended, 27 F.R. 6384, July 6, 1962]

Exemptions. To be regarded as exempt from the disclosure requirements of paragraph (b) of this section are:

Sheet, strip, wire, tubing, and similar basic material when imported in that form;

Parts of industry products which after their importation are subjected to processing or manufacturing in this country, or are merged with another or other parts of domestic manufacture, and as a consequence of such processing, manufacturing, or merger, no longer retain the appearance and essential characteristics possessed by them at the time of their importation.

NOTE: The affixing in this country of domestically manufactured caps and end pieces to imported skeletons of expansion type bands is not to be regarded as so changing the appearance and essential characteristics of such skeletons as to exempt them from the disclosure requirements of paragraph (b) of this section.

Rivets, springs, screws, bolts, washers, and similar small parts which are imported in an unassembled state;

Natural stones and cultured pearls which are used as decorative settings of industry products.

NOTE: Nothing in this section is to be construed as relieving any industry member from compliance with the requirements of custom laws of the U.S. having application to industry products and parts imported from a foreign country. [Rule 4]

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. [Rule 5]

§ 60.6 Deceptive pricing.

It is an unfair trade practice for any member of the industry to represent directly or indirectly in advertising or otherwise that an industry product may be purchased for a specified price, or at a saving, or at a reduced price, when such is not the fact; or otherwise deceive purchasers or prospective purchasers with respect to the price of any product offered for sale; or furnish any means or instrumentality by which others en

gaged in the sale of industry products may make any such representation.

NOTE: On December 20, 1963, the Commission adopted Guides Against Deceptive Pricing which became effective on January 8, 1964, and which supersede the Guides on this subject as adopted October 2, 1958. Copies of the Guides will be furnished upon request.

[Rule 6]

[29 F.R. 7670, June 16, 1964]

§ 60.7

Deception as to identity of manufacturer or seller.

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any member of the industry to use any corporate name, trade name, trade-mark, slogan or other means of identification, which, by reason of its similarity with the corporate name, trade name, trade-mark, slogan, or other means of identification used by another party, which has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the identity of the manufacturer or vendor of any industry product which is sold or offered for sale by the industry member. [Rule 7]

§ 60.8 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. [Rule 8]

§ 60.9 Guarantees, warranties, etc.

(a) It is an unfair trade practice to represent in advertising or otherwise 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. Representations that a product is "guaranteed for life" or has a "lifetime guarantee" in addition to meeting the above requirements, shall contain a conjunctive and conspicuous disclosure of the meaning of "life" or "lifetime" as used (whether that of the purchasers, the product or otherwise).

(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 face.

a

(c) This section has application not only to "guarantees" but also to "warranties," to purported "guarantees" and "warranties," and to any promise or representation in the nature of "guarantee" or "warranty". [Rule 91 § 60.10 Prohibited forms of trade restraints (unlawful price fixing, etc.)* Members of the industry, either directly or indirectly, shall not engage in any planned common course of action, or 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 industry products or otherwise unlawfully to restrain trade; or 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 become a party to any such understanding, agreement, combination, or conspiracy. [Rule 10]

4 The prohibitions of this section are subject to Public Law 542, approved July 14, 1952-66 Stat. 632 (the McGuire Act commonly referred to as the "Fair Trade Amendment") 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.

Members of the industry shall not defame competitors by falsely inputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, nor shall such members falsely disparage the products of competitors in any respect, nor their business methods, selling prices, values, credit terms, policies or services. [Rule 11]

§ 60.12 Prohibited discrimination.

(a) Prohibited discriminatory prices, rebates, discounts, etc. No member of the industry engaged in commerce, in the course of such commerce, shall 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 purchasers 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;

NOTE: Cost justification under the above proviso depends upon net savings in cost based on all facts relevant to the transactions under the terms of subparagraph (2) of this paragraph. For example, if a seller regularly grants a discount based upon the purchase of a specified quantity by a single order for a single delivery, and this discount

is justified by cost differences, it does not follow that the same discount can be cost justified if granted to a purchaser of the same quantity by multiple orders or for multiple deliveries.

(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, sales in good faith in discontinuance of business in the goods concerned;

or

(5) That nothing contained in this section shall prevent the meeting in good faith of an equally low price of a competitor.

re

NOTE: Subsection (b) of section 2 of the Clayton Act, as amended, reads as follows: "Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of butting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor."

(b) Prohibited brokerage and commissions. No member of the industry engaged in commerce, in the course of such commerce, shall pay or grant, or 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