acter, nature, origin, size, or preparation of any product of the industry having the tendency and capacity to mislead or deceive purchasers, or prospective purchasers is an unfair trade practice.

§ 89.9 Commercial bribery.

Commercial bribery is immoral, against the public interest, and is an unfair method of competition.

§ 89.11 Espionage.

Securing information from competitors concerning their businesses by false or misleading statements or representations or by false impersonations of one in authority and the wrongful use thereof to unduly hinder or stifle the competition of such competition is an unfair trade practice.

§ 89.12 Coercing purchases.

The practice of coercing the purchase of several or a group of products as a condition to the purchase of one or more products under the exclusive control of the seller, where the effect may be to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade, is an unfair trade practice. GROUP II

§ 89.105 Dummy companies and corporations.

For any number of small units to organize a dummy corporation without capital stock or without taking other necessary steps to form a real corporation, and with no other purpose than to deceive manufacturers or producers of ice cream as to their ability to purchase in large quantities, and by shopping around among different manufacturers securing a profitless price from the manufacturer or manufacturers, and thereafter distributing the products so purchased among the various small units involved, is injurious to the industry and to the public, disrupting the cordial and longtime business relations of the manufacturers with their customers, and having withal a tendency to cheapen the quality of ice cream and other milk products and is condemned by the industry. § 89.106

Arbitration.

GROUP I

§ 90.2 Deceptive selling methods.

The sale or offering for sale of any product of the industry by any false means or device which has the tendency and capacity to mislead or deceive customers or prospective customers as to the quantity, quality, substance, or size of such product is an unfair trade practice. § 90.3

Imitation of trade-marks, trade names, etc.

The imitation of the trade-marks, trade names, slogans, or other marks of identification of competitors, having the tendency and capacity to mislead or deceive purchasers or prospective purchasers, or prospective purchasers, is an unfair trade practice.

The sale or consignment of goods below cost for the purpose and with the effect of injuring a competitor where the effect may be to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade, is an unfair trade practice.

§ 90.6 Inducing breach of contract. Maliciously inducing or attempting to induce the breach of existing contracts between competitors and their customers by any false or deceptive means whatsoever, or interfering with or obstructing the performance of any such contractual duties or services by any such means, with the purpose and effect of unduly hampering, injuring, or embarrassing competitors in their businesses, is a unfair trade practice.

§ 90.8 Fictitious prices.

Offering for sale merchandise at a price reduced from a marked-up or fictitious price with the tendency and capacity to mislead or deceive purchasers or prospective purchasers is an unfair trade practice.

Substandard merchandise.

To sell mopsticks which do not measure up to the minimum established standards of the industry causes confusion and waste, and if any such mop sticks are sold or offered for sale the buyer should be fully informed of the fact. A failure to so inform the buyer is condemned by the industry.

(a) Products of the industry consist of all types of new, rebuilt, or used power-driven machinery which are designed for use in the commercial fabrication of logs and wood into finished or semi-finished products, and which are of such size, weight, or type as not to be easily and conveniently transported by hand; and parts and accessories for such products.

(b) Members of the industry are persons, firms, corporations, and organizations engaged in the manufacture, sale, offering for sale, lease, or distribution of such products.

§ 92.1

GROUP I

Misrepresentation (general).

It is an unfair trade practice to make or publish, or cause to be made or published, by way of advertising, labeling or otherwise, any statement or representation which, directly or by implication, has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the grade, quality, quantity, weight, working range, efficiency, use, size, material, finish, origin, character, nature, design, condition, performance, durability, manufacture, distribution, availability, or delivery dates, of any industry product, or part or accessory therefor, or which has the capacity and tendency or effect of deceiving purchasers or prospective purchasers in any other material respect. [Rule 1]

§ 92.2 Misrepresentation as to character of business.

It is an unfair trade practice for any member of the industry to represent, directly or by implication, in his advertising or otherwise, that he is a producer or manufacturer of products of the industry, or that he owns or controls a factory making such products, when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business. [Rule 2]

§ 92.3 Misrepresenting products as conforming to standard.

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

through advertising or otherwise, that such products conform to any standards recognized in or applicable to the industry when such is not the fact. [Rule 3] § 92.4 Guarantees, warranties, etc.

(a) In the sale, offering for sale, lease, 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, prominently and in close conjunction with such representation, the identity of the guarantor, the extent and nature of the guar、 antee, 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: On April 26, 1960, the Commission adopted "Guides Against Deceptive Advertising of Guarantees," which are set forth as an appendix to these rules.1 [Rule 4]

§ 92.5

Deception as to rebuilt or secondhand products.

(a) It is an unfair trade practice for any member of the industry to sell, offer for sale, advertise, or otherwise represent, any industry product as being new when such is not the fact.

(b) In the marketing of industry products which are second-hand or rebuilt, or which contain second-hand or rebuilt parts, it is an unfair trade practice to fail to make full and nondeceptive disclosure, by a conspicuous tag or label firmly attached to the products, and in all advertising and promotional literature relating thereto, of the fact:

(1) That such products are secondhand, rebuilt, or contain rebuilt or second-hand parts, as the case may be; and

(2) That the rebuilding was done by other than the original manufacturer,

1 Copies available at the Federal Trade Commission.

when such is the case; when the failure to make such disclosure has the capacity and tendency or effect of misleading purchasers or prospective purchasers of such products. [Rule 51

§ 92.6 Substitution of products.

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

(a) Shipping or delivering industry products which do not conform to samples submitted, to specifications (in bids or otherwise) upon which the sale or lease is consummated, or to representations made prior to securing the order, without advising the purchaser or lessee of the substitution and obtaining his consent thereto prior to making shipment or delivery; or

(b) Falsely representing the reason for making a substitution.

NOTE: Nothing in this section shall be construed as preventing the application of such tolerances as are agreed upon between buyer and seller.

[Rule 61

§ 92.7 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 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 7]

§ 92.8 Deceptive invoicing, etc.

It is an unfair trade practice for any member of the industry to issue invoices, billings, or sales slips which by reason of misstatements therein or omissions therefrom have the capacity and tendency or effect of deceiving purchasers or prospective purchasers in any material respect. [Rule 8]

§ 92.9 Defamation of competitors or false disparagement of their prod

ucts.

The defamation of competitors by falsely inputing to them dishonorable 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 9]

§ 92.10 Inducing breach of contract.

(a) Knowingly inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers or their suppliers, or interfering with or obstructing the performance of any such contractual duties or services, under any circumstance having the capacity and tendency or effect of substantially injuring or lessening present or potential competition, is an unfair trade practice.

(b) Nothing in this section is intended to imply that it is improper for any industry member to solicit the business of a customer of a competing industry member; nor is the section to be construed as in anywise authorizing any agreement, understanding, or planned common course of action by two or more industry members not to solicit business from the customers of either of them, or from customers of any other industry member. [Rule 10]

§ 92.11 Enticing away employees of competitors.

It is an unfair trade practice wilfully to entice away employees or sales representatives 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 employees from seeking more favorable employment, or as prohibiting employers from hiring or offering employment to employees of competitors in good faith and not for the purpose of injuring, destroying, or preventing competition. [Rule 11]

mit or cause to be given, money or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase or contract to purchase products manufactured or sold by such industry member or the maker of such gifts or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors. [Rule 12] § 92.13 Procurement of competitors' confidential information.

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 so as to injure said competitor in his business or to suppress competition or unreasonably restrain trade. [Rule 13]

§ 92.14 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. [Rule 14]

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 thereby harassing or intimidating such customers or prospective customers, or of unduly hampering, injuring, or prejudicing competitors in their business, is an unfair trade practice. [Rule 15]

§ 92.16 Consignment distribution.

(a) It is an unfair trade practice for any member of the industry to employ the practice of shipping industry prod

ucts on consignment without the express request or prior consent of the purchasers.

(b) It is an unfair trade practice for any member of the industry to employ the practice of shipping industry products on consignment or pretended consignment for the purpose and with the effect of artificially clogging or closing trade outlets and unduly restricting competitors' use of said trade outlets in getting their products to purchasers through regular channels of distribution, thereby injuring, destroying, or preventing competition or tending to create a monopoly or unreasonably to restrain trade.

(c) Nothing in this section shall be construed to authorize any understanding or agreement, combination or conspiracy, or planned common course of action, by and between industry members, mutually to conform or restrict their practice of shipping goods on consignment with the intent or effect of lessening competition. [Rule 16]

§ 92.17 Prohibited forms of trade restraints (unlawful price fixing, etc.).a

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

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.