Sardine Industry
16 CFR Part 144 · Trade practice rules · in the Code of Federal Regulations 1943-1977 (14 annual editions)
Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.
Latest edition: Library of Congress, 1977 CFR · Earliest edition: 1943 CFR
Text (1977 edition, OCR)
Part 144
price changes from time to time where
in response ‘to changing conditions af-
fecting the market for or the market-
ability of the goods concerned, such as
but not limited to obsolescence of sea-
sonal goods, distress sales under court
process, or sales in good faith in dis-
continuance of business in the goods
concerned.
(b) Prohibited brokerage and com-
missions. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-
merce, to pay or grant, or to receive or
accept, anything of vaiue as a commis-
sion, 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, elther to
the other party to such transaction or
to an agent, representative, or other
intermediary therein where such inter-
Mmediary is acting in fact for or in be-
half, 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.
(@) Prohibited advertising or promo-
tional 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 adyer-
tising 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 compensa~
tion or in consideration for any services
or facilities furnished by or through such
customer in connection with the proc-
essing, 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 {s avallable on proportion-
ally equal terms to all other customers
‘competing in the distribution of such
products or commodities.
(d) Prohibited discriminatory services
or facilities. It {s an unfair trade prac-
tice 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 resaie, with or without proc-
essing, 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 com-
modity so purchased upon terms not
Title 16—Commercial Practices
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 forego-
ing provisions of this section.
(f) Exemntions. 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 chari-
table institutions not operated for profit.
Nore: In complaint proceedings charging
discrimination in price or services or facill-
tles 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 per-
son charged; and unless justification shall
be affirmatively shown, the Commission is
authorized to issue an order terminating the
discrimination: Provided, however, That
nothing contained in this section shall pre-
vent a seller rebutting the prime 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 fur-
nished by a competitor. See section 2-b,
Olayton Act..
PART 144—SARDINE INDUSTRY
144.1 Definitions.
1442.-.. Sardines unfit for use..
144.3. Misuse of words “natural style.”
1444 Misrepresenting “seconds.”
144.5 Misrepresentation of industry prod-
ucts.
144.6 Deceptive depictions.
144.7% Imitation or simulation of trade-
iz marks, trade name, brands or
labels.
1448 Use of slack-filled or short-weight
containers.
144.9 Defamation of competitors or dispar-
agement of their products.
144.10 Substituting inferior products for
those ordered.
144.11 Misuse of word “free.”
144.12 Fictitious prices.
144.138 False invoicing.
144.14 Inducing breach of contract.
144.15 Commercial bribery.
144.16 Enticing away employees of competi-
tors.
144.17 Unfair threats of infringement suits,
144.18 Consignment distribution.
144.19 Selling below cost.
144.20 Discrimination.
540
Chapter I—Federal Trade Commission
Sec.
144.31 Aiding or abetting use of unfair trade
practices.
Group II
144.101 Oost records.
144.102 Repudiation or cancellation of con-
tracts.
CommzitTes ON TRADE PracrTices
144.201 Industry committees.
Avuruonrrr: Secs. 6(g), 5, 88 Stat. 722, 719;
16 U.S.0. 46(g), 45, unless otherwise noted.
Source: 56 FR 883, Mar. 5, 1940, unless
otherwise noted.
Group I
§ 144.1 Definitions. —
For the purpose of the sections in this
part and in their application the follow-
ing definitions shall apply:
(a) Improper packing. Canned sar-
dines shall be deemed to be improperly
packed (1) if they contain any delete-
rious, decomposed or otherwise unfit
food; or (2) if they are not prepared
and packed under strict sanitary condi-
tions 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 mislead-
Where sauce or oil Js 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 oll used
in packing sardines shall be made from
sound.and wholesome ingredients and
shall contain no starches or other thick-
ening, nor any adulterating agents, nor
any other material or ingredient which
may be deleterious, decomposed, putrid
or harmful.
(b) Natural style. Canned sardines de-
scribed or desiguated 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 over-
filled abnormally, even though such sar-
dines are otherwise properly packed. The
§ 144.4
term shall also be construed as including
canned sardines in which the cans are
dented, spotted, rusty, or otherwise de-
fective: Provided, however, That if the
sardines are spoiled or in any way adul-
terated 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 “Sec-
onds.”
§ 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 rea-
son, 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 ‘“‘Nat-
ural style” sardines, when such is not
true in fact, or when such use of the term
or such representation 1s 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 un-
fair trade practice to cause the same to
be represented or sold (a) as or for sar-
dines 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 nonde-
ceptive 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.
Nore: To avoid deceptive concealment or
the capacity. and tendency or effect of mis-
leading the purchasing public, all sardine
products which are “seconds” should de
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,
ar when the marketing thereof is con-
trary to the provisions of any applicable laws
or governmental regulations.
BAL
§ 144.5
§ 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 capaclty 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 matertal respect, is an un-
fair trade practice.
§ 144.6 Deceptive depictions.
It is an unfair trade practice to use in
relation to industry products any photo-
graph, cut, engraving, insignia, design,
illustration, or pictorial or other depic-
tion or device (in catalogs, sales litera-
ture, advertisements, or other represen-
tations), which has the capacity and
tendency or effect of misleading or de-
ceiving the purchasing or consuming
public respecting the character, nature,
content, brand, grade, quality, quantity,
origin, substance, material, size, prep-
aration, packing, distribution, or manu-
facture 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 trade-
marks, 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 short-
weight containers.
It is an unfair trade practice to sell,
advertise, describe, or otherwise repre-
sent, canned sardines or canned sardine
products packed in slack-filled or short-
weight containers, or packed in odd-sized
containers simulating in size or shape
standard sized or shaped containers
which are known to the public as stand-
ard containers of definite capacity, with
the tendency or effect of misleading or
deceiving the purchasing or consuming
public as to the contents of such con-
tainers or the amount of sardines or
sardine products contained therein; or
Title 16—Commercial Practices
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 dispar-
agement of the grade, quality, or manu-
facture 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 “freo,” or the
equivalent thereof, where not properly
or fairly qualified when the article is in
fact not free, with the capacity or tend-
ency to mislead or deceive the purchas-
ing 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 flctitious prices, or
offering such products for sate at a pur-
ported reduction in price when such pur-
ported 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 mate-
rial information by reason of which
omission or insertion a false record is
made, wholly or in part, of the trans-
action 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.
542
Chapter |—Federal
§ 144.14 Inducing breach of contract.
Inducing or attempting to induce
the breach of existing lawful contracts
between competitors and their cus-
tomers or their suppers by any false or
deceptive means whatsoever, or inter-
fering with or obstructing the perform-
ance of any such contractual duties or
services by any such means, with the pur-
pose and effect of unduly hampering, in-
juring, or prejudicing competitors in
their business, is an unfair trade
practice.
§ 144.15 Commercial bribery.
It is an unfair trade practice for a
member of the industry, directly or in-
directly, 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 pro-
spective customers, or to agents, em-
ployees, or representatives of competi-
tors’ customers or prospective customers,
without the knowledge of their employ-
ers or principals, as an inducement to
influence their employers or principals to
purchase or contract to purchase prod-
ucts manufactured or sold by such in-
dustry member or the maker of such
gift or offer, or to influence such em-
ployers or principals to refrain from
dealing in the products of competitors
or from dealing or contracting to deai
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 busi-
nesses is an unfair trade practice.
§ 144.17 Unfair threats of infringement
suits.
The circuiation of threats of suit for
infringement of patents or trade-marks
among customers or prospective cus-
tomers 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 prejudic-
ing 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 consign-
ment or pretended consignment for the
purpose and with the effect of arti-
Trade Commission § 144.20
ficially clogging trade outlets and unduly
restricting competitors’ use of said trade
outlets in getting their goods to con-
sumers through regular channels of dis-
tribution, or with such purpose to
entirely close said trade outlets to such
competitors so as to substantially lessen
competition or tend to create a monop-
oly or to unreasonably restrain trade:
Provided, however, That nothing in this
section shall be construed or used as re-
stricting or preventing consignment ship-
ping or marketing of commodities in good
faith and without artificial interference
with competitors’ use of the usual chan-
nels of distribution in such manner as
thereby to suppress competition or re-
strain trade.
§ 144.19 Selling below cost.
The practice of selling industry prod-
ucts 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 saies 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 re-
ferred 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 monop-
olistic 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 discrim-
ination. It is an unfair trade practice
for any member of the industry engagod
in commence, in the course of such com-
merce, to grant or allow, secretly or
openly, directly or indirectly, any rebate,
refund, discount, credit, or the grant-
ing of free goods, or other form of price
differential, where such rebate, refund,
discount, or credit, or the granting of
543
§ 144.20
free goods, or other form of price dif-
ferential, 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 many 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, consump-
tion, 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 deliv-
ery resulting from the differing methods
or quantities in which such commodi-
ties are te such purchasers sold or deliv-
ties 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 cus-
tomers 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 elther (i) .
the market for the goods concerned, or
(ii) the marketability of the goods, such
as, but not limited to, actual or immi-
nent 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 com-
missions. 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 com-
mission, brokerage, or other compensa-
tion, 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 inter-
mediary is acting in fact for or in be-
half, or is subject to the direct or in-
direct control, of any party to such
Title 16—Commercial Practices
transaction other than the person by
whom such compensation is so granted
or paid.
(c) Prohibited advertising or promo-
tional 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 advertis-
ing or promotional allowances or any
other thing of vaiue to or for the benefit
of a customer of such member in the
course of such commerce as compensa-
tion or in consideration for any services
or facilities furnished by or through such
customer in connection with the process-
ing, handling, sale, or offering for sale
of any products or commodities manu-
factured, sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportionally
eqnal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.
(a) Prohibited discriminatory services
or faclities. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce to discriminate
in favor of one purchaser against an-
other purchaser or purchasers of a com~
modity 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 com-
modity so purchased upon terms not ac-
corded to all 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 forego-
ing provisions of this section.
(f) Purchases by schools, colleges, uni-
versities, public libraries, churches, hos-
pitals, and charitable institutions not
operated for profit. The foregoing pro-
visions of this section relate to practices
within the purview of the Robinson-
Patman Antidiscrimination Act, which
act and the application thereunder of
this section are subject to the limita-
tions expressed in the amendment to
such Robinson-Patman Antidiscrimina-
tion Act, which amendment was ap-
proved May 26, 1938, and reads as fol-
lows:
544
Chapter |—Federal Trade Commission
Be tt 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, 1986 (Public,
Numbered 692, Seventy-Fourth Congress,
second session), known as the Robinson-
Patman Antidiscrimination Act, shall apply
to purchases of their supplies for their own
use by schools, colleges, universities, public
Ubraries, churches, hospitals, and charitable
institutions not operated for profit.
(Sec, 3, 88 Stat. 780, as amended, secs. 2, 3,
4, 49 Stat. 1527, 1528, ch. 288, 52 Stat. 446;
156 U.S.C. 18, 18a, 18b, 18c, 218)
§ 144.21 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 in-
directly, to use or promote the use of any
unfair trade practice specified in this
part.
Grovur II
§ 144.101 Cost records.
It is the Judgment of the industry that
each member should independently keep
proper and accurate records for deter-
his costs.
§ 144.102 Repudiation or cancellation
of contracts.
Lawful contracts are business obliga-
tions which should be performed in letter
and in spirit. The repudiation or can-
cellation of contracts by sellers on a
rising market or by buyers on a declining
market is condemned by the industry.
COMMITTEE ON TRADE PRACTICES
§ 144.201 Industry committee.
The provisions of § 16.1 of this sub-
chapter shall be applicabie to an industry
committee established under this part.
[21 F.R. 1174, Feb. 21, 1966]
PART 145—-UMBRELLA INDUSTRY
Sec.
145.0 Definition.
Group I
145.1 Deception as to used, rebuilt, or
second-hand products.
145.2 Misrepresentation as to character of
business.
146.8 Substitution of products.
145.4 Identification and disclosure -of
fiber or material content of
covers.
145.5 False invoicing. -
145.6 Misuse of the word “free,” etc,
145.7 Fictitious or deceptive pricing,
145.8 Guarantees, warranties, etc.
§ 145.4
Sec.
145.9 Deception (general).
145.10 Selling below cost.
145.11 Combination or coercion to fix
prices, suppress competition, or
restrain trade.
145.12 Inducing breach of contract.
145.18 Defamation of competitors or dis-
paragement of thelr products.
145.14 Commercial bribery.
146.15 Enticing away employees of com-
petitors.
146.16 Consignment distribution,
146.17 Discriminatory returns.
145.18 Prohibited discrimination.
146.19 Atding or abetting use of unfair
trade practices.
Group IT
145.101 Repudiation of contracts.
145.102 Return of merchandise.
AvTHoRITY: Secs. 6, 5, 38 Stat, 721, 719;
15 U.6.0, 46, 45, unless otherwise noted.
Source: 15 FR 8617, June 9, 1950, unless
otherwise noted.
§ 145.0 Definition.
As used in this part the term “um-
brellas” shall mean all kinds and types
of umbrellas and parasois, whether
portable or stationary, and shall include
beach, lawn, and tractor umbrellas. The
products of the industry consist of um-
brellas as so defined and include handles,
frames, tips, covers, and other parts or
accessories for umbrellas.
Group I
§ 145.1 Deception as to used, rebuilt,
or secoud-hand products.
(a) In the sale, offering for sale, or
distribution of umbrellas, it is an unfair
trade practice for any industry member
to represent, directly or indirectly, that
any umbrella is new when such is not the
fact; or for any industry member to sell,
offer for sale, or distribute umbrellas
under circumstances or conditions hav-
ing the capacity and the tendency or
effect of causing purchasers or prospec-
tive purchasers to be led to believe that
the umbrellas are wholly new when such
is not the fact.
(b) Umbrellas which have the appear-
ance of being new, but which contain
rebuilt, used, or second-hand parts, shall
have affixed to them durable tags or la-
beis on which disclosure is made of the
fact that a specified part thereof has been
subjected to previous use, and such tags
or labels shall be of size and conspleu-
ousness as to reasonably assure of notice
to purchasers and prospective purchasers
of such umbrellas. Similar require-
545