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For the purpose of the sections in this part and in their application the following definitions shall apply:

(a) Improper packing. Canned sardines shall be deemed to be improperly packed (1) if they contain any deleterious, decomposed or otherwise unfit food; or (2) if they are not prepared and packed under strict sanitary conditions conformable to the rules and regulations of appropriate Federal and State authorities; or (3) if the cans are not well filled with whole fish of good quality, properly cleaned and with heads removed; or (4) if the canned product contains any adulterant or the canning or packing thereof is defective in any other respect; or (5) if the can used is so made, formed, or filled as to be misleading.

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Where sauce or oil is used in packing sardines, the quantity should be sufficient to fill the interstices in the can fully packed with the fish. Any tomato or mustard sauce or other sauce or oil used in packing sardines shall be made from sound and wholesome ingredients and shall contain no starches or other thickening, nor any adulterating agents, nor any other material or ingredient which may be deleterious, decomposed, putrid or harmful.

(b) Natural style. Canned sardines described or designated as "Natural style" shall be deemed to be sardines which may or may not be salted or brined but which are packed without the addition of any sauce, oil, condiment, or flavoring agent.

(c) Seconds. The term "Seconds" shall be construed as including any canned sardines of which the can is overfilled abnormally, even though such sardines are otherwise properly packed. The term shall also be construed as including canned sardines in which the cans are dented, spotted, rusty, or otherwise defective: Provided, however, That if the sardines are spoiled or in any way adulterated or unfit for human or animal consumption they shall not be sold or distributed at all for such consumption, irrespective of whether or not they are designated by the canner, distributor, dealer, or other seller as being "Seconds."

§ 144.2 Sardines unfit for use.

It is an unfair trade practice to offer for sale, sell, or promote the sale of canned sardines for human consumption or as food for animals when, for any reason, such product is or has become unfit for such human or animal consumption. § 144.3 Misuse of words "natural style.”

It is an unfair trade practice in the sale or distribution of canned sardines to use the term "Natural style" as descriptive of any such sardines, or to otherwise represent them as being "Natural style" sardines, when such is not true in fact, or when such use of the term or such representation is in any other respect false, misleading, or deceptive. § 144.4 Misrepresenting “seconds."

In the sale or distribution of canned sardines which are "seconds," it is an unfair trade practice to cause the same to be represented or sold (a) as or for sardines of a higher grade or quality; or (b)

as not being such "seconds"; or (c) under conditions of deceptive concealment of the fact that the products are "seconds"; or (d) to offer for sale, sell, or distribute such "seconds" without full and nondeceptive disclosure of the fact that such products are "seconds" made clearly and unequivocally in all display or descriptive matter used in the sale or distribution of the products.

NOTE: To avoid deceptive concealment or the capacity and tendency or effect of misleading the purchasing public, all sardine products which are "seconds" should be clearly and indelibly marked as "seconds," and the fact they are "seconds" should be clearly disclosed in all representations used in connection with their sale or distribution; moreover, such products should not be marketed at all for consumption of man or animals when the same are unfit for such human or animal consumption, respectively, or when the marketing thereof is trary to the provisions of any applicable laws or governmental regulations.

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§ 144.5 Misrepresentation of industry products.

The practice of selling, advertising, describing, or otherwise representing canned sardines, sardine oil or meal, or related products, in a manner which is calculated to mislead or deceive or has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public with respect to the character, nature, content, brand, grade, quality, quantity, origin, substance, material, size, preparation, packing, distribution, or manufacture of such products, or ingredients thereof, or in any other material respect, is an unfair trade practice.

§ 144.6 Deceptive depictions.

It is an unfair trade practice to use in relation to industry products any photograph, cut, engraving, insignia, design, illustration, or pictorial or other depiction or device (in catalogs, sales literature, advertisments, or other representations), which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public respecting the character, nature, content, brand, grade, quality, quantity, origin, substance, material, size, preparation, packing, distribution, or manufacture of any products of the industry, or ingredients thereof; or which is false, misleading, or deceptive in any other respect.

§ 144.7 Imitation or simulation of trademarks, trade names, brands or labels. The imitation or simulation of the trade-marks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

§ 144.8 Use of slack-filled or shortweight containers.

It is an unfair trade practice to sell, advertise, describe, or otherwise represent, canned sardines or canned sardine products packed in slack-filled or shortweight containers, or packed in odd-sized containers simultating in size or shape standard sized or shaped containers which are known to the public as standard containers of definite capacity, with the tendency or effect of misleading or deceiving the purchasing or consuming public as to the contents of such containers or the amount of sardines or sardine products contained therein; or which are packed in containers so made, formed, or filled as to be otherwise misleading.

§ 144.9 Defamation of competitors or disparagement of their products.

The defamation of 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 the grade, quality, or manufacture of the products of competitors, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice.

§ 144.10 Substituting inferior products for those ordered.

The practice of using or substituting any product of the industry inferior in grade or quality to that specified by the purchaser, without the consent of said purchaser to such use or substitution, or with the capacity and tendency or effect of otherwise misleading or deceiving the purchasing or consuming public is an unfair trade practice.

§ 144.11 Misuse of word "free.”

The use of the word "free," or the equivalent thereof, where not properly or fairly qualified when the article is in fact not free, with the capacity or tendency to mislead or deceive the purchasing or consuming public, is an unfair trade practice.

§ 144.12 Fictitious prices.

Offering sardines or sardine products for sale at prices purported to be reduced from what are in fact fictitious prices, or offering such products for sale at a purported reduction in price when such purported reduction is in fact fictitious, with the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

§ 144.13 False invoicing.

Withholding from or inserting in an invoice, billing, or statement any material information by reason of which omission or insertion a false record is made, wholly or in part, of the transaction which such invoice or billing or statement purports to represent, with the effect of thereby misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

§ 144.14

Inducing breach of contract.

Inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers or their suppliers 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 prejudicing competitors in their businesses, is an unfair trade practice.

§ 144.15 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, 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 gift 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.

§ 144.16 Enticing away employees of competitors.

Willfully enticing away the employees of competitors with the purpose and effect of unduly hampering, injuring, or prejudicing competitors in their businesses is an unfair trade practice.

§ 144.17 Unfair threats of infringement suits.

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 harassing or intimidating such customers or prospective customers, or of unduly hampering, injuring, or prejudicing competitors in their businesses, is an unfair trade practice.

§ 144.18 Consignment distribution.

It is an unfair trade practice for any member of the industry to use the practice of shipping goods on consignment or pretended consignment for the purpose and with the effect of artificially clogging trade outlets and unduly restricting competitors' use of said trade outlets in getting their goods to consumers through regular channels of distribution, or with such purpose to entirely close said trade outlets to such competitors so as to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade: Provided, however, That nothing in this section shall be construed or used as restricting or preventing consignment shipping or marketing of commodities in good faith and without artificial interference with competitors' use of the usual channels of distribution in such manner as thereby to suppress competition or restrain trade.

§ 144.19 Selling below cost.

The practice of selling industry products below the seller's cost, when pursued with wrongful intent of thereby injuring a competitor and where the effect of such practice is to unreasonably restrain trade, tend to create a monopoly, or substantially lessen competition, is an unfair trade practice.

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 coupled with the effect of unreasonably restraining trade, tending to create a monopoly, or substantially

lessening competition. Sales below cost by a competitor not in a sufficiently strong competitive position to produce, and not actually producing, the monopolistic or restraining effect mentioned, do not fall within the inhibitions of 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.

§ 144.20 Discrimination.

(a) Prohibited discriminatory prices, or 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, or credit, or the granting of free goods, or other form of price differential, where such rebate, refund, discount, or credit, or the granting of free goods, 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 section 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 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 section shall prevent price changes from time to time where made in response to changing conditions affecting either (i)

the market for the goods concerned, or (ii) the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(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 purchasers on proportionally equal terms.

Deception as to used, rebuilt, or second-hand products.

Misrepresentation as to character of

Substitution of products.

(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.

(f) Purchases by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. The foregoing provisions of this section relate to practices within the purview of the RobinsonPatman Antidiscrimination Act, which act and the application thereunder of this section are subject to the limitations expressed in the amendment to such Robinson-Patman Antidiscrimination Act, which amendment was approved May 26, 1938, and reads as follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That nothing In the Act approved June 19, 1936 (Public, Numbered 692, Seventy-Fourth Congress, second session), known as the RobinsonPatman Antidiscrimination Act, shall 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.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528, ch. 283, 52 Stat. 446; 15 U.S.C. 13, 13a, 13b, 13c, 21a)

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fair trade practices.

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145.101

fiber or material content

False invoicing.

Misuse of the word "free," etc.

Fictitious or deceptive pricing.

Guarantees, warranties, etc.
Deception (general).

Selling below cost.

Combination or coercion to fix

prices, suppress competition, or restrain trade.

Inducing breach of contract.

Defamation of competitors or disparagement of their products. Commercial bribery.

Enticing away employees of competitors.

Consignment distribution.

Discriminatory returns.

Prohibited discrimination.

Aiding or abetting use of unfair trade practices.

GROUP II

Repudiation of contracts.

145.102 Return of merchandise.

AUTHORITY: The provisions of this Part 145 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45.

SOURCE: The provisions of this Part 145 appear at 15 F.R. 3617, June 9, 1950, unless otherwise noted.

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