Button Jobbing

16 CFR Part 163 · Trade practice rules · in the Code of Federal Regulations 1969-1969 (1 annual editions)

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Latest edition: Library of Congress, 1969 CFR · Earliest edition: 1969 CFR

Text (1969 edition, OCR)

§ 162.101

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-
lc, Numbered 692, Seventy-fourth Congress
second session), Known as the Robinson-
Patman Antidiscrimination Act, shall appiy
to purchases of their supplies for their own
use by schools, coileges, universities, public
libraries, churches, hospitals, and charitable
institutions not operated for profit.

(Sec. 2, 38 Stat. 780, as amended, secs. 2, 3, 4,
49 Stat. 1527, 1528, ch. 283, 52 Stat. 446; 15
U.S. C. 13, 18a, 13b, 13¢, 21a)

Group IT

§ 162.101 Ambiguity in contracts or or-
ders.

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 mdus-
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.

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Title 16—Chapter |

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 F.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.
163.5 Selling below cost,
163.6 Procurement of competitors’ con-
fidential information by unfair
Means and wrongful use thereof.
163.7 Commerctai 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
trade.
Group II
163.101 Giving of samples,
163.102 Arbitration,
163.103 Repudiation of contracts.
AurHoriTy: 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 has 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.

(bo) 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


Title 16—-Chapter |!

domestic products or as not having been
imported from or manufactured in a
foreign country; or (2) to conceal the
fact that such products are of foreign
origin either by failing to clearly mark
the country of origin on the display cards
or containers, or by other deceptive con-
cealment,

Nore. Nothing in this section shall be con-
strued as relieving anyone of such further
marking as may be required by applicable
jaws or regulations thereunder.

§ 163.2 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 products of competi-
tors in any respect, or of their business
methods, selling prices, values, credit
terms, policies, or services, is an unfair
trade practice.

§ 163.3. Enticing away employees
competitors.

Willfully enticing away the employees
of coinpetitors, with the purpose and ef-
fect of thereby hampering or injuring
competitors in their business and de-
stroying or substantially lessening com-
petition, is an unfair trade practice.

Nore: Nothing in this section shall be
construed as prohibiting employees of
agents from seeking more favorable em-
ployment.

§ 163.4 Inducing breach of contract.

Inducing or attempting to induce the
breach of existing lawful contracts be-
tween competitors and their customers
or their suppliers by any false or de-
ceptive means whatsoever, or interfer-
ing with or obstructing the performance
of any such contractual duties or serv-
ices 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.

§ 163.5 Selling below cost.

The practice of selling industry prod-
ucts below the seller’s cost, when pur-
sued with wrongful intent of thereby
injuring a competitor and where the ef-
fect 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

of

53

§ 163.7

such selling below the seller’s cost as is
resorted to and pursued as a monopo-
listic 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.

All elements recognized by good ac-
counting practice as proper elements of
such cost shall be included in determining
cost under this section. The costs re-
ferred 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.

§ 163.6 Procurement of competitors’
confidential information by unfair
means 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
competitor by bribery of an employee or
agent of such competitor, by false or mis-
leading statements or representations,
by the impersonation of one in authority,
or by any other unfair ineans, and to use
the information so obtained in such man-
ner as to injure said competitor in his
business or to suppress competition or
unreasonably restrain trade.

§ 163.7 Commercial bribery.

(a) In selling or marketing. 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 custoiners, or to
agents, employees, or representatives of
competitors’ customers or prospective
customers, without the knowledge of
their employers or principals, as an in-
ducement 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.

(b) In purchasing supplies. It is an
unfair trade practice for any member of
the industry, directly or indirectly, to
bribe an employee or agent of a supplier
to induce such supplier to discriminate in
favor of such member of the industry
over other purchasers from such sup-
plier, with the effect of thereby hamper-
ing a competitor of such member in his


§ 163.8

business and destroying or substantially
lessening competition. (See also § 163.10
(e), relative to procurement of illegal dis-
crimination in price.)

§ 163.8 False invoicing.

Withholding from or inserting in an
invoice any statements or information
by reason of which omission or insertion
a false record is made, wholly or in part,
of the transaction represented on the
face of such invoice, with the effect of
thereby misleading or deceiving pur-
chasers or prospective purchasers, is an
unfair trade practice.

§ 163.9 Consignment shipping.

It is an unfair trade practice for any
member of the industry to use the prac-
tice of shipping goods on consignment or
pretended consignment for the purpose
and with the effect of artificially clogging
trade outlets and unduly restricting com-
petitors’ use of said trade outlets in get-
ting 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 sub-
stantially 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 con-
signment shipping or marketing of com-
modities in good faith and without arti-
ficial interference with competitors’ use
of the usual channels of distribution in
such manner as thereby to suppress com-
petition or restrain trade.

§ 163.10 Discrimination.

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price dis-
crimination. 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 (whether
in the guise of samples or otherwise),
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 competi-
tion or tend to create a monopoly in any
line of commerce, or to injure, destroy, or

54

Title 16——-Chapter |

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

(b) Prohibited brokerage and commis-
sions. 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 value 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, either to
the other party to such transaction or
to an agent, representative, or othei
intermediary therein where such inter-
mediary is acting in fact for or in behalf,
or is subject to the direct or indirect con-
trol, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(ce) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member of the in-
dustry 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


Title 16—Chapter |

consideration for any services or facili-
ties furnished by or through such cus-
tomer 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 commod-
ities.

(d) Prohibited discriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry to
discriminate in favor of one purchaser
against another purchaser or purchasers
of acommodity bought for resale, with or
without processing, by contracting to
furnish or furnishing, or by contributing
to the furnishing of, any services or fa-
cilities connected with the processing,
handling, sale, or offering for sale of such
commodity so purchased upon terms not
accorded to all purchasers on propor-
tionally 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 provi-
sions of this section.

(f) Purchases by schools, colleges,
universities, public libraries, churches,
hospitals, 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 limitations
expressed in the amendment to such
Robinson-Patman Antidiscrimmation
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 Robinson-
Patman 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. 1627, 1528, ch. 283, 52 Stat. 446; 15
U. S. C. 13, 13a, 18b, 18c, 21a)

§ 163.11 Imitation of trade-marks, etc.

The practice of imitating or caus-
ing to be imitated, or directly or in-

55

§ 163.102

directly promoting or aiding the imita-
tion of, the trade-marks, trade names,
or other exclusively owned symbols or
marks of identification of competitors, or
the exclusively owned patterns or de-
signs of competitors which have been
patented and have not been directly or
by operation of law dedicated to the pub-
lic, with the capacity and tendency or
effect of thereby misleading or deceiving
purchasers, prospective purchasers, or
the consuming public, is an unfair trade
practice.

§ 163.12 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
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.

Group II
§ 163.101 Giving of samples.

The industry disapproves the giving of
samples without charge except only as
may be necessary to acquaint purchasers
or prospective purchasers with the grade
or quality of the product offered for sale,
and where the giving of such samples by
any member of the industry is not prac-
ticed or accomplished in such way or
to such extent as to effectuate an illegal
discrimination in price contrary to the
provisions of § 163.10.

§ 163.102 Arbitration.

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


§ 163.103

§ 163.103 Repudiation of contracts.

Lawful contracts are business obliga-
tions which should be performed in let-
ter and in spirit. The cancellation or
repudiation of contracts by sellers on a
rising market or by buyers on a declining
market is condemned by the industry.

PART 164—LOW PRESSURE
REFRIGERANTS INDUSTRY

Group I

Sec.

164.1 Misrepresentation in diverse forms.

164.2 Deception in respect to “heels.”

164.3 Deception in respect of refrigerant
containers.

164.4 Deceptive use of refrigerant con-
tainers.

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

164.6 Imitation of trade-marks, trade
names, etc.

164.7. Commercial bribery.

164.8 Inducing breach of contract.

164.9 False invoicing.

164.10 Procurement of competitors’ confi-
dential information by unfair
Means and wrongful use thereof.

164.11 Consignment distribution.

164.12 Selling below cost.

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

164.14 Discrimination.

164.15 Discrimination as to return of cylin-
ders or containers, and discrimina-
tion in refunding of deposits on
cylinders or containers.

Group II

164.101 Return of cylinders.

164.102 Unwarranted return of merchandise.
164103 Differentiating between wholesale
and retail transactions.

164.104 Dissemination of credit informa-

tion,

AUtTHoriry: The provisions of this Part 164
issued under secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46(g), 45, unless otherwise noted.

Source: The provislons of this Part 164
appear at 10 F.R. 7968, June 30, 1945, unless
otherwise noted.

Group I

§ 164.1 Misrepresentation
forms.

It is an unfair trade practice to use, or
cause or promote the use of, any trade
promotional literature, advertising mat-
ter, guarantee, warranty, mark, brand,
label, designation, or representation,
however disseminated or published:

(a) Which has the capacity and tend-
ency or effect of misleading or deceiving

in diverse

Title 16—Chapter |

the purchasing or consuming public with
respect to the grade, quality, quantity,
origin, efficacy, price, ingredients, safety,
preparation, manufacture, or distribu-
tion of any industry product: or

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

§ 164.2 Deception in respect to “heels.”

It is an unfair trade practice to repre-
sent to purchasers or prospective pur-
chasers that refunds will be credited
or paid for “heels” when such refunds
are not actually made, or when such
“heels” do not actually exist, or when
such representation is otherwise false,
misleading, or deceptive. (For inhibited
discriminations in respect of “heels,” see
§ 164.14.) (The term “heels” as used in
this part refers to the small residual por-
tion of refrigerant remaining in the cyl-
inder or container and returned therein
by the purchaser to the manufacturer,
such residual portion however, not being
regarded as “heels” if it exceeds 10 per-
cent of the full capacity of the respective
container.)

§ 164.3 Deception in respect to refrig-
erant containers.

It is an unfair trade practice to cause
any refrigerant shipped or delivered in a
eylinder or container not complying fully
with appropriate regulations of the Inter-
state Commerce Commission to be repre-
sented or passed off, directly or indirectly,
as and for a refrigerant shipped or deliv-
ered in cylinders or containers which do
comply with such regulations.

Nore: Nothing in this section shall be con-
strued as relieving any member of the in-
dustry or other party of the necessity of
complying with all of the rules and regula-
tions of the Interstate Commerce Commis-
sion relative to the shipment or delivery in
commerce in cylinders or containers of the
various compressed refrigerants used, in-
cluding requirements as to packlng, testing,
re-testing, marking, qualification, and main-
tenance of cylinders, etc.; and no misrepre-
sentation or deception, direct or indirect,
shall be practiced in the sale or distribution
of industry products respecting any such
matters.

§ 164.4 Deceptive use of refrigerant con-
tainers.

The use by any member of the industry
of the refrigerant cylinder or container
of a competitor with the capacity and
tendency or effect of thereby misleading
or deceiving purchasers or prospective
purchasers, or the unauthorized use of a

56