NOTE: In cutting seam binding in the greige or after finishing, adequate allowance should be made for any subsequent shrinkage or contraction of such products, to the end that purchasers may be assured the full yardage represented.

§ 201.4 Deception respecting type of edge.

To the end that misunderstanding, confusion, misrepresentation, and deception respecting the type of edge on seam binding may be avoided and prevented, clear, legible, and nondeceptive disclosure of the type of edge on such binding should be made on each disk, spool, bolt, card, or other form of immediate packaging thereof, by tag, label, stamp, or mark so affixed as to ensure that it will remain thereon until such binding reaches the ultimate user; and it is an unfair trade practice to misrepresent the type of edge on seam binding, or to cause any seam binding to be offered for sale, sold, or distributed, without making adequate, nondeceptive disclosure of the type of edge thereon, where failure to make such disclosure has the capacity and tendency or effect of misleading or deceiving purchasers.

The following are illustrative examples of the type of disclosure provided for in this section:

"CUT EDGE SEAM BINDING"

or

"SEAM BINDING, CUT FUSED EDGE”

§ 201.5

or

"WOVEN EDGE SEAM BINDING"

Deception as to origin.

With respect to any seam binding which has been imported from a foreign country into the United States in the greige or other unfinished state, or in a finished or semi-finished state, it is an unfair trade practice:

(a) To offer for sale, sell, or distribute any such seam binding under marks, stamps, brands, labels, or representations which have the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public into the belief (1) that such seam binding was woven or fabricated in the United States, when such is not the fact; or (2) that it was dyed, finished, redyed, or refinished elsewhere than in the United States, when such is not true; or

(b) To offer for sale, sell, or distribute any such seam binding without the same being marked stamped, branded, or labeled so as to indicate clearly and non

deceptively (1) the country of origin of the seam binding, or (2) that such seam binding was woven or fabricated in said country and was dyed or finished or redyed or refinished in the United States, as the case may be, where the failure, refusal, or omission to so mark, stamp, brand, or label such seam binding has the capacity and tendency or effect of thereby promoting, abetting, or effectuating the marketing of such products under conditions which are misleading or deceptive to purchasers, prospective purchasers, or the consuming public.

NOTE: Nothing in this section shall be construed as relieving any member of the industry or other party of the necessity of complying with requirements of the customs laws or regulations, or other applicable provisions of law or regulations, relating to the marking of imported articles.

§ 201.6 Selling below cost.

The practice of selling seam binding at a price less than the cost thereof to the seller, with the purpose or intent, and where the effect may be, to injure, suppress, or stifle competition or tend to create a monopoly in the production or sale of such products, is an unfair trade practice. As used in this section, the term "cost" means the total cost to the seller, including the costs of acquisition, processing, preparation for marketing, sale, and delivery.

This section is not to be construed as prohibiting all sales below cost, but only such selling below the seller's cost as is resorted to and pursued as a monopolistic practice with the wrongful intent referred to and where the effect may be unreasonably to restrain trade, tend to create a monopoly, or substantially lessen competition.

All elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section. The costs referred to in the section are actual costs of the respective seller and not some other figure or average costs in the industry determined by an industry cost survey or otherwise.

§ 201.7 False invoicing.

Withholding from or inserting in invoices, or sales slips any statements 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, with the capacity and tend

ency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

§ 201.8 Consignment distribution.

It is an unfair trade practice for any member of the industry to employ the practice of shipping seam binding 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 consumers through regular channels of distribution, thereby injuring, destroying, or preventing competition, or tending to create a monopoly or unreasonably to restrain trade. Nothing in this section shall be construed as restricting or preventing consignment shipping or marketing of seam binding in good faith where suppression of competition, restraint of trade, or undue interference with competitors' use of the usual channels of distribution, is not effected; nor shall anything in this section be construed to authorize any agreement. understanding, or common course of action by and between industry members to mutually conform or restrict their practice of shipping goods on consignment with the intent or effect of lessening competition.

§ 201.9

Combination or coercion to fix prices, suppress competition, or restrain trade.

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

(a) To use, directly or indirectly, any form of threat, intimidation, or coercion against any member of the industry or other person unlawfully to fix, maintain, or enhance prices, suppress competition, or restrain trade; or

(b) To enter into or take part in, directly or indirectly, any agreement, understanding, combination, conspiracy, or concerted action with one or more members of the industry, or with one or more other persons, unlawfully to fix, maintain, or enhance prices, suppress competition, or restrain trade.

§201.10 Prohibited discrimination.'

(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits,

'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

66-034--72- -15

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;

(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;

(3) That nothing contained in this paragraph 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.

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."

(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.

(1) Exemptions. The inhibitions of this section shall not apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.

NOTE: In complaint preceedings charging discrimination in price or services or facilities furnished and upon proof having been made of such discrimination, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged; and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein 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-(See sec. 2 (b) Clayton Act.)

§ 201.11 Aiding or abetting use of un. fair trade practices.

It is an unfair trade practice for any: person, firm, or corporation 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.

(a) "Industry Products" consist of sun glasses and sun glass lenses and other glasses and lenses which are used to provide protection for the eyes from sun glare, strong light, or other similar conditions, and frames and other parts for such glasses. The glasses and lenses covered are eye-protective, not eye-corrective, devices.

(b) "Industry Members" are persons, firms, corporations, and organizations engaged in the manufacture, assembly, sale, or distribution in commerce of industry products as defined above.

NOTE: Nothing in this part shall be construed as relieving any member of the industry of the necessity of complying with requirements of State laws or regulations or other laws or regulations applicable to the products of this industry.

§ 202.1 Deception (general).

(a) It is an unfair trade practice for any member of the industry to sell, offer for sale, or distribute any industry prod=uct under any representation or circumstance having the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers of such product in any material respect.

(b) The inhibitions of this section are to be understood as applicable to, but not limited to, misleading claims and representations concerning:

(1) The protection afforded users of the product from eye injury resulting from exposure to sun glare, strong light, or other similar conditions;

(2) The efficacy of the product to im: prove, or to prevent material reduction of, vision on the part of users when worn under continuous or intermittent exposure to strong light;

(c) Other practices to be regarded as among those inhibited by the section are the following:

(1) Representing or implying that industry products are surplus goods of any of the armed services of the United States, or that such products were acquired, directly or indirectly, from the United States Government, or any branch or agency thereof, when such is not the fact;

(2) Representing or implying by use of such expressions as "Air Corps Type," "Air Force Type," "Aviation Type," "Type Worn by Air Force Pilots," or by use of any other terms or expressions of similar import, that industry products are of the same type, quality, and efficacy as those worn by aircraft pilots of the armed forces of the United States. when such is not the fact.

§ 202.2 Misuse of the terms "ground," "polished," and "ground and polished.'

In connection with the sale, offering for sale, or distribution of sun glasses or sun glass lenses, it is an unfair trade practice to use the terms "ground," "polished," or "ground and polished," or any other words or terms of similar import, as descriptive of sun glass lenses unless the entire surfaces thereof have been ground with an abrasive and thereafter polished to eliminate form and surface imperfections and to produce an optical finish which is free from visible surface defects such as scratches, waves, and greyness: Provided, however, The terms "ground," "polished," or "ground and polished," or any other words or terms of similar import, may be used as descriptive of sun glass lenses produced from plate glass which has been so ground and polished, and thereafter thermally curved, bent, or dropped, if, in immediate conjunction with any of such representations, it is plainly disclosed that such plate glass was thermally curved after being ground and polished; as for example: "Made from plate glass ground and polished and thereafter thermally curved."

§ 202.3 Misrepresenting products as conforming to a standard or specification.

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

(a) To falsely represent or imply that any such product conforms to the re

quirements of any standard or specification, whether established or recognized by a department or unit of a city or state government, or of the Federal Government, or otherwise;

(b) To represent or imply that such product conforms to the requirements of any standard or specification without clearly disclosing the identity of the standard or specification to which reference is made. Such disclosure shall be by number, if any, of the standard or specification referred to, and the type of glass covered thereby, on all labels, invoices, sales literature, display cards, containers, and other advertising, except that when available space on labels is insufficient for the full statement in legible type, the identification may be made by number only;

(c) For any member of the industry to represent or imply that the product conforms to any standard or specification which is inapplicable or which has been rescinded, revised, superseded, or amended, and thereby mislead or deceive purchasers or prospective purchasers. § 202.4 Misuse of the word "Crookes." (a) It is an unfair trade practice, in the sale or distribution of sun glasses or sun glass lenses, to mark, stamp, brand, label, advertise, describe, or otherwise represent, such sun glasses or lenses as being "Crookes" when such is not true in fact; or to use the word "Crookes" or other words or representations in any manner as to import or imply that the lenses to which such marks, words, or representations are applied are "Crookes" lenses when such is not true in fact.

(b) Definition: For purposes of this part a "Crookes" lens is defined as a nearly neutral colored ultra-violet absorption glass which contains sufficient crude cerium and/or other rare earths to reduce the ultra-violet transmission at a thickness of 2.0 mm. to not more than 1 percent at 334 millimicrons, and also at this thickness to have prominent didymium absorption bands in the yellow region of the spectrum. For sun glasses the visual transmission shall be not more than 67 percent, but may vary within this limitation according to the desired shade.

§ 202.5 Deceptive price representations. Members of the industry shall not 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 engaged 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. The 1964 guides are set forth as an appendix to these rules.

[29 F.R. 11125, July 31, 1964]

§ 202.6 Misrepresentation as to origin and disclosure of foreign origin.

(a) It is an unfair trade practice to misrepresent the place of manufacture or processing of industry products or their components.

(b) It is also an unfair trade practice to offer for sale, sell or distribute any industry product manufactured or processed in a foreign country, or any industry product containing a substantial or material part or parts manufactured or processed in a foreign country, without clear and adequate disclosure of such fact, when the failure to make such disclosure has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the origin of the product, or part or parts thereof, as the case may be.

Disclosure of foreign origin, as and when required under this paragraph, may be in the form of a stamping or marking on the product itself, or on a tag or label securely attached to the product. Such disclosure shall clearly identify the foreign country in which the product, or part or parts thereof, were manufactured or processed, and shall be of such conspicuousness as to be noticeable and readable on casual inspection, and of such permanence as to remain thereon until the consummation of consumer sale.

NOTE: 1: Paragraph (b) of this section is not to be construed as requiring disclosure as to foreign manufacture or processing when, by reason of further manufacturing or processing operations in this country, or merger with another part or other parts, the imported product or part does not retain the appearance and essential characteristics which is possessed at the time of its importation. In this connection it is to be understood that when lenses imported from a for