Wood Case Lead Pencil Industry

16 CFR Part 162 · Trade practice rules · in the Code of Federal Regulations 1976-1976 (1 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1976 CFR · Earliest edition: 1976 CFR

Decisions that mention this industry's rules (1)

Text (1976 edition, OCR)

Chapter |—Federal Trade Commission

(g) Not being free from rust, or not
having been effectively protected against rust
when placed on the market.

Note 2. As used in this rule the word “sub-
standard” as applied to safety razors shall be
construed to include the following:

Safety razors which are not of such con-
struction and material as to assure an ade-
quate and effective blade seating and blade
exposure; or which are subject to warping to
such an extent as to prevent an adequate and
effective blade seating or blade exposure: or
which have such rough edges, burrs, pin
holes or other imperfections or such flaws,
defects, or susceptibility to rusting as to ma-
terlally affect their usability adversely; or
which are of such construction, material, or
workmanship as not to permit of tight assem-

§ 161.104

§ 161.104 Proper identification of origin
of biades and suitable packaging.

In the interest of identification and
the prevention of confusion and decep-
tion, all steel razor blades when placed on
the market should be impressed or
etched with the name or identifying
trade-mark of the manufacturer or of
the responsible distributor introducing
such blade into the channels of trade.

‘Each packet of razor blades should be

bly without breaking or cracking; or which ©

are “seconds” or not first quality products by
reasor, of such defective or inferior material,
construction, or workmanship,

§ 161.15 Razor blades for industrial use
or for purposes other than human
shaving.

To the end that confusion and decep-
tion may be avoided and prevented,
razor blades placed on the market to be
sold for industrial uses only or for uses
other than human shaving shall be suit-
ably marked to show such fact, as for ex-
ample: “For Industrial Use Only.” The
selling of any such razor blades as or for
razor blades manufactured or suitable for
human shaving when such is not the fact,
is an unfair trade practice.

Group II
§ 161.101 Repudiation of contracts.

Lawful contracts are business obliga-
tions which should be performed in letter
and in spirit. The repudiation of con-
tracts by sellers on a rising market or by
buyers on a declining market is con-
demned by the industry.

§ 161.102 Arbitration.

The industry approves the practice of
handling business disputes between mem-
bers of the industry and their customers
in a fair and reasonable manner, coupled
with a spirit of moderation and good will,
and every effort should be made by the
disputants themselves to compose the
differences. If unable to do so they
should, if possible, submit these disputes
to arbitration.

§ 161.103 Cost records.

It is the judgment of the industry that
each member should independently keep
proper and accurate records for deter-
mining his costs.

49

marked to show the number of blades
contained in the package. Each blade
should also be suitably wrapped or pack-
aged to afford security in handling and

protection against damage or dulling

fontact with the cutting edge of the-
Jade.

PART 162—-WOOD CASED LEAD
PENCIL INDUSTRY

Group I

Sec,

162.1 Misrepresentation and misbranding.

162.2 Deception as to origin of pencils
made of fully fabricated imported
lead or slats.

162.3 Misuse of word “free,” etc.

162.4 Defamation of competitors or dis-
paragement of their products.

162.5 Procurement of competitors’ confi-
dential information by unfair
means and wrongful use thereot.

162.6 Commercial bribery.

162.7 Imitation or simulation of trade-.
marks, trade names, etc.

162.8 Selling below cost.

162.9 Use of “loss leaders.”

162.10 Coercing purchase of one product as
@ prequisite to the purchase of~-
other products.

162.11 Substitution of products.

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

162.13 Discrimination.

Group IT

162.101 Ambiguity in contracts or orders.

162.102 Fictitious bids.

162.103 Recording of trade-marks, trade-
names, etc., to avoid confusion.

COMMITTEE ON TRADE PRACTICES
162.201 Industry committee.

AuTHorIry: The provisions of this Part 162 -
issued under secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46(g), 45, unless otherwise noted.

Source: The provisions of this Part 162
appear at 10 F.R. 7902, June 29, 1945, unless .
otherwise noted.


$ 162.1

Group I

§ 162.1 Misrepresentation and misbrand-
ing.

It is an unfair trade practice to use, or
cause or promote the use of, any adver-
tising by radio, newSpapers, magazines,
-or other media, or any trade promotional
literature, label, brand, mark, imprint,
designation, or representation, however,
disseminated or published:

(a) Which has the capacity and tend-
ency or effect of misleading or deceiv-
ing the purchasing or consuming public
with respect to the lead hardness, brand,
grade, origin, quality, quantity, dura-
bility, size, use, value, price, or terms of
sale of any industry product, or with re-
spect to the manufacture, distribution, or
marketing of such product; or

(b) Which is false, misleading, or de-
ceptive in any other respect.

§ 162.2 Deception as to origin of pen-
cils made of fully fabricated im-
ported lead or slats.

(a) In the sale or distribution in the
domestic market of wood cased lead pen~-
ils assembled in the United States from
fully fabricated imported lead or slats.
(1) Itis an unfair trade practice to con-
eeal or fail to fully and nondeceptively
disclose the foreign origin of such lead
or slats or both, as the case may be, the
concealment or nondisclosure having the
capacity and tendency or effect of mis-
leading or deceiving the purchasing or
consuming public.

(2) The practice of imprinting the
phrase “Made in U. S. A.” upon such
pencils or their containers, or the use
thereof in advertisements or other rep-
resentations pertaining to such pencils,
is also an unfair trade practice when
truthful disclosure is not clearly and
conspicuously made, in immediate con-
junction therewith, showing that such
lead or slats or both, as the case may be,
have been imported from or made in the
country of their origin.

(b) Manner of disclosure. The fol-
lowing is prescribed as a proper manner
of making said disclosure under this sec-
tion of the foreign origin of such lead
or slats or both, as the case may be:

(1) Unless the disclosure is made on
the pencils themselves, the disclosure
shali in all cases be made on the wrap-
per or immediate container of a dozen
or smatier number of pencils, irrespective
of whether or not the phrase “Made in
U.S. A.” is used; and

50

Title 16—Commercial Practices

(2) Whenever the phrase “Made in
U.S. A.” is used, whether on the pencils,
on their wrappers or containers, or in
advertising matter, the disclosure shall
be made in immediate conjunction with
such phrase wherever used.

(3) Illustrative designations of for-
eign origin of such lead or slats which
may be used under this section are as

follows: “Lead made in ......._____

“Slats made in ~~... ,” Lead and
slats made in ~~... ” “Lead im-
ported from —.-~-~..... " “Slats im-
ported from 2.2 221. ,”’ “Lead and
slats imported from ...........~ ,’ (in-

serting the applicable country of origin
in such blanks).

(c) All the provisions of this section
respecting the phrase “Made in U.S. A.”
shall be equally applicable to expres-
sions or representations of similar im-
port or meaning such as, but not limited
to, “U. S. A.” “Made in America,”
“American Made,” “U. S. Product,” etc.

(a) This section shall not be con-
strued as prohibiting the imprinting upon
such pencils, or the use in advertising or
eisewhere, of the name of the city or
State, or both, which constitute the ad-
dress of the person or concern manufac-
turing or marketing such pencils: Pro-
vided, however, all other provisions of
this section are complied with and no
deception is involved.

(e) Nothing in this section shall be
deemed to relieve anyone of the necessity
of complying with the requirements of
the customs law or regulations, or other
applicable provisions of law or regula-
tions, relating to the marking of imported
articles.

§ 162.3 Misuse of word “free,” ete.

It is an unfair trade practice to use the
term “free,” or any other term of similar
import or meaning, to describe, desig-
nate, or refer to any industry product
which is not given to the recipient there-
of without cost and unconditionally.

§ 162.4 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 dis-
paragement of the grade or quality of the
products of competitors or of the source
or origin of raw materials or component
parts used in their products, or the false
disparagement of the nature or form of


Chapter l—Federal

business conducted by competitors, their
credit terms, values, policies, or services,
or other false disparagement, is an unfair
trade practice.

§ 162.5 Procurement of competitor's
confidential information by unfair
nieans and wrongful use thereof.

It is an unfair trade practice for any
member of the industry to obtain infor-
mation concerning the business of a com-
petitor by bribery of an employee or
agent of such competitor, by false or
misleading statements or representa-
tions, by the impersonation of one in
authority, or by any other unfair means,
and to use the information so obtained
in such manner as to injure said com-
petitor in his business or to suppress
competition or unreasonably restrain

rade.

§ 162.6 Commercial bribery.

It is an unfair trade practice for any
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 repre-
sentatives of customers or prospective
customers or to agents, employees, or
representatives of competitors’ customers
or prospective customers, without the
knowledge of their employers or princi-
pais, as an inducement to influence their
employers or principals to purchase or
contract to purchase products manufac-
tured 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 or contracting to
deal with competitors.

§ 162.7 Imitation or simulation of trade-
marks, trade names, etc.

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 purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.

$162.8 Selling below cost.

The practice of selling industry prod-
ucts below the seller’s cost, when pur-
sued with wrongful intent of thereby in-
jJuring a competitor and where the effect
of such practice is to unreasonably re-
strain 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

Trade Commission §$ 162.12
such selling below the seller’s cost as is
resorted to and pursued as a monopolis-
tic 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.

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

* § 162.9 Use of “loss leaders.”

The practice of selling any product of
the industry below the seller’s cost as a
“loss leader” to induce the purchase of
any other product of the industry, the
sale of the latter being used to recoup the
loss sustained on the “loss leader” prod-
uct so sold, with the capacity and tend-
ency or effect of misleading or deceiving
purchasers, prospective purchasers, or
the consuming public, is an unfair trade
practice,

§ 162.10 Coercing purchase of one
product as a prerequisite to the pur-
chase 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 to sub-
stantially lessen competition or tend to
create a monopoly or to unreasonably
restrain trade, is an unfair trade practice.

§ 162.11 Substitution of products.

The practice of shipping or delivering
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to
representations made prior to securing
the order, without the consent of the pur-
chasers to such substitution, or with the
capacity and tendency or effect of mis-
leading or deceiving the purchasing or
consuming public, is an unfair trade
practice.

§ 162.12 Combination or coercion to fix
prices, suppress competition, or re-
strain trade. _

It is an unfair trade practice for a
member of the industry, or any other
person:

(a) To use, directly or indirectly, any
form of threat, intimidation, or coercion

51


§ 162.13

against any member of the industry or
other person to unlawfully fix, maintain,
or enhance prices, suppress competition,
or restrain trade; or

(b) To enter into or take part in, di-
rectly or indirectly, any agreement, un-
derstanding, combination, conspiracy, or
concerted action with one or more mem-
bers of the industry, or with one or more
other persons, to unlawfully fix, main-
tain, or enhance prices, suppress compe-
tition, or restrain trade.

8162.13 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 engaged
in commerce, in the course of such com-
merce, to grant or allow, secretly or
openly, directly or indirectly, any rebate,
refund, discount, credit, or other form of
price differential (whether in the form of
so-called free goods or otherwise), where
such rebate, refund, discount, credit, or
other form of price differential, effects a
discrimination in price between differ-
ent purchasers of goods of like grade and
quality, where either or any of the pur-
chases involved therein are in com-
merce, and where the effect thereof
may be substantially to lessen competi-
tion 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: Pro-
vided, however, (1) That the goods in-
volved 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 deliv-
ery 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 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 either (i)
the market for the goods concerned, or

Title 16—Commercial Practices

di) the marketability of the goods, such
as, but not limited to, actual or imminent
deterioration of perishable goods, ob-
solescence 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 in-
termediary therein where such inter-
mediary 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 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 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 manu-
factured, sold, or offered for sale by such
member, unless such payment or consid-
eration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

(da). Prohibited discriminatory serv-
ices or facilities. It is an unfair trade
practice for any member of the industry
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 contribut-
ing 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.

(e) Inducing or receiving an illegal
discrimination in price. It is an unfair


Chapter I—Federal

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 provi-
sions 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, passed by
‘Congress, 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 noth-
ing in the Act approved June 19, 1936 (Pub-
lic, Numbered 692, Seventy-fourth Congress
second session), Known as the Robinson-
Patman Antidiscrimination Act, shall apply
to purchases of their supplies for thelr 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, 8, 4,
49 Stat. 1527, 1628, ch. 283, 52 Stat. 446; 15
U. Ss. C. 13, 18a, 18b, 18c, 21a)

Group I

§ 162101 Ambiguity in contracts or or-
ers.

In order to avoid ambiguity and mis-
understandings between buyers and
sellers, it is the judgment of the industry
that contracts or orders for wood cased
lead pencils should be specific as to the
description, quality, and price of the pen-
cils to be furnished thereunder.

§ 162.102 Fictitious bids.

The industry condemns fake or ficti-
tious bids made for the purpose of de-
ceiving competitors and securing undue
advantage

§ 162.103 Recording of trade-marks,
trade names, etc., to avoid confusion.
To avoid confusion within the indus-
try, it is recommended that each member
thereof voluntarily file with some person
designated by the industry all trade-
marks, trade names, labels, or brands
belonging to and used by such member
and that such information be made
equally available to all members of the
industry and to the public.

53

Trade Commission § 163.1

COMMITTEE ON TRADE PRACTICES
§ 162.201 Industry committee.

The provisions of § 16.1 of this sub-
chapter shall be applicable to an indus-
try committee established under this
part.

[21 P.R. 1174, Feb. 21, 1956]

PART 163—BUTTON JOBBING

INDUSTRY
Group I

Sec.

163.1 Misrepresentation and deception.

163.2 Defamation of competitors or dis-
paragement of their products.

163.3 Enticing away employees of com-
petitors.

163.4 Inducing breach of contract.

163.6 Selling below cost.

163.6 Procurement of competitors’ con-
fidential information by unfair
means and wrongful use thereof.

163.7 Commercial bribery.

163.8 False invoicing.

163.9 Consignment shipping.

163.10 Discrimination.

163.11 Imitation of trade-marks, etc.

163.12 Combination or coercion to fix prices,
Suppress competition, or restrain
trude.

Group IT

163.101 Giving of samples.

163.102 Arbitration.

163.103 Repudiation of contracts.
AUTHORITY: The provisions of this Part 163

issued under secs. 6(g), 5, 38 Stat. 722, 719;

15 US.C. 46(g), 45, unless otherwise noted.
Source: The provisions of this Part 163

appear at 10 F.R. 7966, June 30, 1945, unless

otherwise noted.

Group I

§ 163.1 Misrepresentation and decep-
tion.

(a) It is an unfair trade practice to
use, Or cause or promote the use of,
any trade promotional literature, adver-
tising matter, mark, brand, label, desig-
nation, or representation, however dis-
seminated or published, which hag the
capacity and tendency or effect of mis-
leading or deceiving purchasers or pro-
spective purchasers with respect to the
price, grade, quality, quantity, substance,
character, nature, size, use, design, prep-
aration, manufacture, or distribution of
any product of the industry, or in any
other material respect.

(b) It is an unfair trade practice (1) to
cause any buttons or other products of
the industry of foreign origin to be repre-
sented, directly or indirectly, as being