Masonry Water Proofing Industry

16 CFR Part 169 · Trade practice rules · in the Code of Federal Regulations 1967-1974 (4 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1974 CFR · Earliest edition: 1967 CFR

Decisions that mention this industry's rules (8)

Text (1974 edition, OCR)

§ 168.101

purchase price when and because such
merchandise has been falsely or im-
properly labeled, branded, or represented,
-or when and because such merchandise
is defective contrary to warranty or
purchase contract.

Group II
-§ 168.101 Giving samples.

The industry disapproves the giving of
samples without charge except when
given to acquaint purchasers, prospective
purchasers, or the consuming public,
‘with the product offered for sale and
where the giving of such samples is not
practiced or accomplished in such way or
‘to such extent as to effectuate an illegal
discrimination contrary to the provisions
of Rule 19 (8 168.19), or to accomplish
any other illegai result contrary to these
‘rules.

168.102 Unwarranted return of mer-
chandise.

The practice, by members of the in-
dustry, of selling merchandise and later
permitting the purchaser to return it for
credit or refund of purchase price, with-
out just cause, creates waste and loss,
increases the cost of doing business to the
-detriment of both the industry and the
public, and is condemned by the industry,
subject, however, to requirements and
limitations set forth in the provisions of
§ 168.20 of Group I, herein.

§ 168.103 Arbitration.

The industry approves the practice of
handling business disputes between
amembers of the industry and their cus-
tomers 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
their differences. If unable to do so they
should, if possible, submit these disputes
to impartial arbitration.

PART 169-—MASONRY WATER-
PROOFING INDUSTRY

Group I

‘Sec,

169.0 Definitions.

169.1 Deception (general).

169.2 Deceptive use of representatlons
“waterproof,” “waterproofing,” etc.

169.3 Misuse of the words “dampproof”
and “dampproofing.”

169.4 Misuse of the words “water-resistant”
and “damp-resistant.”

169.5 Misuse of the words “weatherproof,”

“weatherproofing,” etc.

Title 16—Commercial

Practices

Sec. :

169.6 Misuse of terms importing per-
petuity.

169.7 Essential disclosures to prevent de-
ception as to the use and applica-
tion of industry products.

1698.8 Misrepresentation as to character of
business,

169.9 Deceptive use of trade or corporate
names, or trade-marks, etc.

169.10 Misrepresenting products as con-
forming to standard.

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

169.12 Guarantees, warranties, etc.

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

169.14 Unfair threats of infringement suits.

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

169.16 Substitution of products.

169.17 Inducing breach of contract.

169.18 Commercial bribery.

169.19 Discrimination.

169.20 Aiding or abetting use of unfair trade
practices.

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

Source: The provisions of this Part 169
appear at 11 F.R. 9613, Aug. 31, 1946, unless
otherwise noted.

§ 169.0 Definitions.

As used in this part, the terms “indus-
try products,” “masonry unit,” and ‘“‘ma-
sonry structures” have the following
meanings, respectively:

(a) Industry products. Admixtures
and coatings which render, purport to
render, or are represented as rendering,
concrete, brick, stone, stucco, concrete
blocks, cinder blocks, mortar, or other
masonry, or structures or parts of struc-
tures made thereof, impermeable or more
resistant to water and moisture or the
effects thereof.

(b) Masonry unit. A concrete block,
cinder block, brick, stone, or other similar
structural unit.

(ec) Masonry structure. Any structure
or part of structure which is made of
concrete, stucco, or other masonry, or of
concrete blocks, cinder blocks, brick,
stone, or similar units, bonded by mortar
or other material. The term includes
building wails, retaining walls, roofs,
basements, foundations, floors, dams, res-
ervoirs, tanks, swimming pools, piers,
silos, and parts thereof, as weli as other
structures and parts of structures, which
are of any such composition and con-
struction.


Chapter |-—Federal

§ 169.1 Deception (general).

(a) It is an unfair trade practice to
sell, offer for saie, or distribute any in-
dustry product, or to promote the sale or
use thereof, by any method or under any
circumstance or condition which has the
capacity and tendency or effect of mis-
leading or deceiving purchasers, prospec-
tive purchasers, or the public, as to the
utility or efficacy of the product, or the
results to be achieved by its use; or as to
the quantity to be used, or regarding the
grade, composition, ingredients, safety,
ease or method of application, origin, or
manufacture of the product; or by any
other method or under any circumstance
or condition which has the capacity and
tendency or effect of misleading or de-
ceiving purchasers or prospective pur-
chasers in any other material respect.

(b) Under paragraph (a) of this sec-
tion, no representation shall be made,
directly or by implication, that a product
has a certain degree or duration of effi-
cacy when such representation is de-
ceptive or misleading because said de-
gree or duration of efficacy has not been
established by actual experience or by
competent and adequate test or is not
capable of being so established.

(c) Under this section, no representa-
tion shail be made, directly or by impli-
cation, unless such be wholly true and
nondeceptive, that any product:

(1) Wili be fuiiy effective regardless of:

(i) The kind, porosity, or condition of
masonry units or masonry structures
with which it is integrated or to which
it is applied;

Gi) The manner of its integration or
application;

(iii) Cracks or other structural failure
resulting from ground movement, settle-
ment, or other cause;

(iv) The geographical location of the
structure to which it is applied, or the
water, moisture, or atmospheric condi-
tions which such structure may encoun-
ter; or

(2) Has the approval of any Govern-
ment agency or official; or

(3) Complies with any Government
specification or standard; or

(4) Has been, or is being, substan-
tially used in any specified building,
dam, structure, or project; or

(5) Is adequate in any specified quan-
tity for coverage of a specified area of
masonry surface, or sufficient as an ad-
ditive for a certain or stated quantity
or Masonry mix.

81

Trade Commission § 169.2

(a) The inhibitions of this section
shall apply with respect to every kind or
form of advertisement or representa-
tion, whether in newspaper, periodical,
telephone directory, building materials
directory, sales catalog, sales promo-
tional literature, or radio continuity;
on containers or on tags or labels at-
tached thereto; in guarantees, war-
ranties, or sales contracts; by use of
depictions, exhibitions, or demonstra-
tions; or whether in any other form or
through any other means.

§ 169.2 Deceptive use of representa-
tions “waterproof,” “waterproofing,”
etc.

(a) In the sale, offering for sale, or
distribution of industry products, it is an
unfair trade practice to use the word
“waterproof,” “waterproofing,” or any
other word or representation of similar
import, as descriptive of any industry
product unless, when properly inte-
grated with or applied to masonry units
or masonry structures, the product will
render such units and structures im-
permeable to, or proof against the
passage of, water and moisture through-
out the life of such units or structures
and under all conditions of water or
moisture contactor exposure; subject,
however, to the following further pro-
visions of this section:

(b) If an industry product will effect
such impermeability for a substantiai’
period of time, although less than, or
not known to be as long as, the life of
the masonry unit or structure; or,

If for a substantial period of time the
industry product will render some but
not all types of masonry units or struc-
tures impermeable to water and mois-
ture; or,

If for a substantial period of time
the industry product wili render ma-

1When claim is made by the manufacturer
or seller of improper application (or integra-
tlon), 1t is deemed necessary under this rule
that such manufaoturer or seller show that
clear, reasonable, and explicit instructions for
application had been issued and made avaii-
able to the purchaser and that the applica-
tion of the product was not made in con-
formity with such instructions. When other
or additional instructions or representations
regarding application have been furnished
or made verbally or in writing by the man-
ufacturer or seller, or their agents, respec-
tively, it is deemed necessary for such manu-
facturer or seller also to show that the appli- .
cation was not made in conformity therewith.


$ 169.9

sonry units or structures impermeable
to water under some but not all condi-
‘tions applicable in the use of the indus-
‘try product or the function of such ma-
sonry units or structures:

Then the words “waterproof,” “water-
proofing,” or representations of like im-
port, may be used as descriptive of said
‘industry product, Provided, Such words,
terms, and representations are accom-
panied and qualified, in immediate con-
junction and in accordance with the fol-
lowing provisions, by a clear, conspicu-
‘ous, and nondeceptive statement of
limitations or disclosure showing the re-
“spective applicable limitations (i) of the
period of time impermeability wili en-
-dure, (ii) of the type or kind of masonry
unit or structure in which the product
‘will produce such impermeability, and
(ili) of the other applicable conditions
‘which need be present or absent in order
‘for said result of impermeability to be
rachieved and to endure during said speci-
‘fied period of time; And provided fur-
ther, That in the use of any of said
-words, terms, or representations in pur-
-Suance of the foregoing provisions of this
‘section, the same are not used with such
‘context, or advertising or labeling make-
‘up, or in such other circumstance, as to
‘be deceptive or misleading.

(1) Said accompanying and qualify-
ing statement of limitations or disclosure
shall not be deceptively minimized, re-
motely placed, obscured, or otherwise
rendered inconspicuous in advertising
‘maiter or labeling, nor shall it be inter-
mingled with such context or so fash-
ioned in advertising or labeling make-up
as to produce a confusing or misleading
tendency or effect.

(2) Said statement of limitations or
disclosure as to period of time imperme-
ability will endure may be stated, when
set forth nondeceptively, as a certain ap-
proximate minimum of years or months,
which shall be deemed sufficiently accu-
rate if such time is stated as being the
approximate minimum and is shown to
‘be accurate within reasonable tolerances;
‘or said period of time may be stated in
‘accordance with a reasonable average
‘determined on the basis of actual ex-
‘perience in the use of the product under
the various conditions which are or may
be encountered, or in the event actual
experience is not available and instances
of failure of the product are unknown,
the statement of approximate time limi-
tation may be based upon adequate and

Title 16——Commercial Practices

scientifically recognized tests made un-
der specified conditions and for the pur-
pose of determining the length of time
impermeability resulting from the prod-
uct wili endure. Said period of time may
aiso be stated by showing a certam maxi-
mum, as, for example, “Will give pro-
tection against water and moisture up to
5 years,” or by stating that imperme-
ability will be afforded from a cer-
tain minimum to a certain maximum
period, or by stating that impermeable
results cannot be assured beyond a cer-
tain stated period, Provided, Such maxi-
mum period is applicable in respect of
the different types of uses of the product
and is within a reasonable tolerance,
And provided further, That the maxi-
mum period stated is generally appii-
cable and not iimited to isolated or ex-
ceptional uses or conditions unless it be
fully disclosed that such maximum period
is only applicable in such isolated or ex-
ceptionai uses or conditions.

(3) Where the product will produce
impermeability for a substantial period
of time in some but not all masonry units
or structures, said statement of limita-
tions or disclosure shall also show the
kind of masonry units or structures as to
which the product is limited in produc-
ing impermeability or show the kind of
masonry units or structures upon which
the product wili not produce impermea-
bility, as, for example:

For house basements only,
For home foundations other than cinder
block.

(4) Said statement of limitations or
disclosure shall also show whether the
product is to be used oniy for above-
grade or below-grade work (as, for ex-
ample, “For above-grade brick walis”),
unless the product is such as to produce
the impermeability for the time specified
regardless of whether it is used above
grade or below grade.

(5) Said statement -of limitations or
disclosure shall also show such other
conditions or circumstances which will
prevent the industry product from pro-
ducing the result of impermeability dur-
ing the specified time in masonry units
or structures coming within the same
general class of those for which the
product is marketed unless the industry
product is such as to produce the im-
permeability for the time specified re-
gardiess of any such conditions or cir-
cumstances.


Chapter !—Federal

(c) Use of the word “waterproofing”
in name of corporation or company.
‘Nothing in this part shall be construed
-as prohibiting use of the word “water-
‘proofing” in the name of a corporation
-or company engaged in the business of
manufacturing or marketing industry
‘products or materials in conformity with
tthe regulations in this part: Provided,
‘That in the advertising, labeling, selling,
-or offering for sale, of such products, full
-and nondeceptive disclosure is made re-
-specting the products as specified in the
‘regulations in this part for the words
“waterproof,” “waterproofing,” and
terms of similar import; And provided
also, That no deception or misrepre-
:sentation is involved in the use made of
‘any such word or term in said name of
corporation or company; And provided
further, That such name is not used in
@ manner contrary to the provisions of
§ 169.9.

(ad) Use of words “watertight,” “mois-
tureproof,’ “vaporproof,” and “water-
sealed.” The requirements relating to
the words “watertight,” “moistureproof,”
waporproof,” and “water-sealed” shall be
‘the same as specified in the foregoing
‘provisions of this section for “water-
:proof” and “waterproofing,” and repre-
sentations of similar import.

‘Cross Rergrence: For provisions relating
‘to “dampproof” and “dampproofing,” and
“water-resistant” and “damp-resistant,” see
‘§§ 169.3 and 169.4, respectively.

‘§ 169.3 Misuse of the words “damp-
proof” and “dampproofing.”

‘(a) In the sale, offering for sale, or
@istribution of industry products, it is an
unfair trade practice to use the word
“dampproof” or “dampproofing” in any
manner having the capacity and tend-
ency or effect of misleading or deceiving
‘purchasers, prospective purchasers, or
tthe public as to the protection against
-water or moisture afforded by the prod-
ucts to which such term is applied, or
otherwise.

(b) Nothing in this section shall be
construed as preventing the use of the
~word “dampproof” or “dampproofing” as
‘descriptive of a product for use above
grade only, where the fact that such
product is for above-grade use only is
clearly disclosed and where such prod-
muct, when properly applied’ to any Kind

83

Trade Commission § 169.4
or type of masonry structures, will for
the life of any such structure afford im-
permeability to such moisture and water
contacts as may reasonably be expected
to be encountered above grade; Provided,
however, That if such protection will not
obtain for all of the life of any such
structure but will obtain for a substantial
period thereof, or if such protection will
not obtain with respect to ail kinds of
masonry and types of structures above
grade, then any such limitation as to
time,’ Kind or kinds of masonry, and
type or types of structures, shall also
be disclosed.

(c) When it is not disclosed, clearly
and nondeceptively, that the product is
for above-grade use only, use of the
word “dampproof” or “dampproofing”
shall be subject to the provisions of
§ 169.2 relating to the use of the words
“waterproof” and “waterproofing.”

(da) Disclosures required under the
provisions of this section shall be set
forth conspicuously in immediate con-
junction with the word or term to which
such disclosures relate and shall be in
conformity with the requirements speci-
fled in § 169.2 (b) (1).

§ 169.4 Misuse of the words “water-
resistant” and “damp-resistant.”

In the sale, offering for sale, or distri-
bution of industry products, it is an
unfair trade practice to use the word
“water-resistant” or “damp-resistant”
as descriptive of any industry product
which, when properly integrated with or
applied’ to masonry units or masonry
structures, fails to render such units or
structures less permeable to water and
moisture to a substantial degree and for
a substantial period of time; nor shall
any such word or term be modified or

1 When claim is made by the manufacturer
or seller of improper application (or integra-
tion), it is deemed necessary under this rule
that such manufacturer or seller show that
clear, reasonable, and explicit instructions for
application had been issued and made avail-
able to the purchaser and that the applica-
tion of the product was not made in con-
formity with such instructions. When other
or additional instructions or representations
regarding application have been furnished
or made verbally or in writing by the man-
ufacturer or seller, or their agents, respec-
tively, 1t 1s deemed necessary for such manu-
facturer or seller also to show that the appli-
cation was not made in conformity therewith.

2 See footnote 2 on page 84,


§ 169.5

accompanied by other words or terms so
as to import a greater or more lasting
efficacy than such as is possessed by the
product, nor be used in any manner hay-
ing the capacity and tendency or effect
of misleading or deceiving.

§ 169.5 Misuse of the words “weather.
proof,” “weatherproofing,” etc.

In the sale, offering for sale, or distribu-
tion of industry products, it is an unfair
trade practice to use the term “weather-
proof,” “weatherproofing,” or any other
word or term of similar import, as de-
scriptive of any industry product which,
when properly integrated with or ap-
plied’ to a masonry unit or masonry
structure, fails to render such unit or
structure impervious to water and mois-
ture and immune to weather damage
during all of the life of such unit or
structure: Provided, That if such imper-
meability and immunity are assured for
a substantial period of time which is less
than the life of the unit or structure,
then such word “weatherproof,” “weath-
erproofing,” etc., may be used as descrip-
tive of such product if in immediate
conjunction therewith, and with at least
equal conspicuousness, there appears a
full and nondeceptive disclosure of the
fact that such impermeability and im-
munity are not assured beyond a stated
period.”

“Weather damage,” as the term is used
in the preceding paragraph, is to be
construed as meaning damage resulting
from exposure to the atmosphere or any
natural atmospheric condition, including
rain, ice, snow, hail, fog, humidity, cold,
heat, dryness, wind, and the rays of the
sun.

§ 169.6 Misuse of terms importing per-
petuity.

In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice:

2 Duration may be indicated by disclosure
of a minimum and maximum period, such
as “from 3 to 5 years,” “from 5 to 7 years,”
etc.; but when so indicated the minimum and
maximum periods shown should be in equal
relation to the average duration and the
maximum be such as may be expected to be
reached in a substantial number of cases:
and further, the maximum should not be
shown unless in immediate conjunction with
the minimum nor with greater conspicuous-
ness than the minimum.

84

Title 16—-Commercial Practices .

(a) To use the word “perpetual,”
“everlasting,” “eternal,” or any other
word or term of similar import, as de-
scriptive of the efficacy of an industry
product, the result to be achieved by its
use, or any of its properties or capabili-
ties; or

(b) To use the word “permanent” or
“permanently” as descriptive of the re-
sult to be achieved from the use of an
industry product when such result will
not endure throughout the life of the
masonry unit or structure on or in which
product is used without impairment, or
under any other circumstance having the
tendency and capacity or effect of deceiv-
ing or misleading.

§ 169.7 Essential disclosures to prevent
deception as to the use and applica-
tion of industry products.

(a) In order that deception of pur-
chasers and prospective purchasers as to:
the use and application of industry prod-
ucts may be effectively prevented, the
following information, when applicable,
should be disclosed, clearly and non-
deceptively, in advertising and labeling
of products and in the sales literature
pertaining thereto:

(1) Whether the product is intended:
for integration or surface application,
and if the latter, whether for interior or
exterior surface.

(2) That the full effectiveness of the
product is dependent on the masonry
unit or masonry structure being of a.
certain minimum thickness, and if so, a.
disclosure of such required thickness,

(3) That it is a prerequisite to full ef-
fectiveness that prior to the application
of the product the masonry unit or ma-
sonry structure be conditioned for such
application by repair, cleansing, rough-
ing, wetting, application of a primer coat
of another compound or material, or
otherwise.

(4) That the proper application of the
product requires skill, knowledge, or the
use of special tools or equipment, not
usually incident to the application of
Products of the same general function
and purpose.

(5) That cracks or other structural
failure resulting from settlement, ground
movement, or other cause, may result in
water or moisture leakage regardless of
the efficacy of the industry product inte-
grated or applied to the structure.

(6) That the character of results to be
obtained through use of the product is


Chapter l—Federal Trade Commission

dependent upon its proper application or
integration.

In addition to such disclosures clear,
explicit, and detailed directions as to the
manner in which the product is to be
integrated with or applied to the masonry
unit or structure should be fully dis-
closed and made available to all pur-
chasers, either by setting forth such di-
rections on the product containers or by
pamphlets or other means sufficient to
acquaint purchasers therewith.

(b) The concealment or nondisclosure
of any of the above information, with the
capacity and tendency or effect of there-
by misleading or deceiving purchasers
oer prospective purchasers, is an unfair
trade practice.

(c) Nothing in this section shall be
construed as requiring disclosure of such
information on product containers, or on
labels attached thereto, in the case of
bulk shipments to building contractors
or professional applicators not for resale
but for integration or application by
them or under their supervision, when
it is shown that such information, in-
cluding written directions as to proper
manner of application, has otherwise
been furnished to such contractors or ap-
plicators, and the word “waterproofing,”
“dampproofing,” or any other term or
representation concerning the results to
be achieved by use of the product does
not appear on the container or labels, and
no deception of contractors, purchasers,
users, or of members of the public, is in-
volved directly or indirectly.

§ 169.8 Misrepresentation. as to eharac-
ter of business,

It is an unfair trade practice for
any concern, in the course of or in
connection with the distribution of
industry products, to represent, di-
rectly or indirectly, that it is a manu-
facturer of industry products, or that it
owns or controls a factory making such
products, when such is not the fact, or in
any other manner to misrepresent the
character, extent, or type of its business.

§ 169.9 Deceptive use of trade or cor-
porate names, or trade-marks, etc.

The use of any trade name, corporate
name, trade-mark, or other trade desig-
nation which has the capacity and tend-
ency or effect of misleading or deceiving
the purchasing or consuming public as to
the character, name, nature, efficacy, or
origin of any product of the industry, or
any material used therein, or which is

85

§ 169.12

false or misleading in any other respect,
is an unfair trade practice. (See also
§ 169.2(c).)

§ 169.10 Misrepresenting products as
conforming to standard.

Representing through advertising or
otherwise, that any products of the in-
dusiry conform to a standard recognized
in or applicable to the industry when
such is not the fact, with the capacity
and tendency or effect of misleading or
deceiving the purchasing or consuming
public, is an unfair trade practice.

§ 169.11 Imitation of trade-marks, trade
names, etc.

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

§ 169.12 Guarantees, warranties, etc.

(a) In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any member
of the industry to issue or use any guar-
antee or purported guarantee which has
the capacity and tendency or effect of
misleading or deceiving purchasers or
prospective purchasers in any material
respect.

(b) Under the provisions of this sec-
tion, the word “guarantee,” “guaranty,”
or “guaranteed” shall not be used unless
in conjunction therewith there is set
forth a statement of an undertaking
which in fact constitutes a guarantee
and in which the name of the guarantor
is clearly set forth or indicated; nor shall
guarantees of the following type or char-
acter be used:

(1) Guarantees containing  state-
ments, promises, representations, or as-
sertions which have the capacity and
tendency or effect of misleading and de-
ceiving as to quality, efficacy, results
from use, or duration of benefits; or
- (2) Guarantees which are of such
form, text, or character as to import,
imply, or represent that the guarantee
is broader than is in fact true, or will
afford more protection to purchasers or
users than is in fact true; or

(3) Guarantees in which any condi-
tion, qualification, or contingency applied
by the guarantor thereto is not fully
and nondeceptively stated therein, or is
stated in such manner or form as to be


§ 169.13

deceptively minimized, obscured, or con-
cealed, wholly or in part; or

(4) Guarantees which are stated,
phrased, or set forth in such manner
that although the statements contained
therein are literally and technically true,
the whole is misleading in that pur-
chasers or users are not made sufficiently
aware of certain contingencies or condi-
tions which are applicable to such guar-
antees, and materially lessen the value
thereof as a guarantee to purchasers or
users; or

(5) Guarantees which purportedly ex-
tend for such indefinite or unlimited pe-
riod of time or for such long period of
years as to have the capacity and tend-
ency or effect of thereby misleading or
deceiving purchasers or users into the
belief that the product has or is defi-
nitely known to have greater utility, effi-
cacy, or durability in actual use than is
in fact true; or

(6) Purported guarantees in the form
of documents, promises, representations,
or other form which are represented or
held out to be guarantees when they are
not such in fact, or when they involve
any deceptive or misleading use of the
word “Guarantee” or term of similar
import; or

(1) Guarantees Issued, or directly or
indirectly caused to be used, by any
member of the industry when or under
which the guarantor fails, or refuses to
scrupulously observe his obligations
thereunder or fails or refuses to make
good on claims coming reasonably within
the terms of the guarantee.

(c) This section shall be applicable not
only to guarantees but also to warran-
ties, to purported warranties and guar-
antees, and to any promise or represen-
tation in the nature of a guarantee or
warranty.

8169.13 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 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

‘86

Title 16—Commercial Practices

competition or unreasonably restraim
trade.

§ 169.14 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 thereby harassing or intimi-
dating such customers or prospective:
customers, or unduly hampering, iniur-
ing, or prejudicing competitors in their
business, is an unfair trade practice.

§ 169.15 Defamation of competitors or
disparagement of their products.

The defamation of competitors by:
falsely imputing to them dishonorabie
conduct, inability to perform contracts,
questionable credit standing, or by other
false representations, or the false dis-
paragement of competitors’ products in
any respect, or of their business methods,
selling prices, values, credit terms, pol-
icies, or services, is an unfair trade
practice.

§ 169.16 Substitution of products.

The practice of shipping or delivering
products which do not conform to
samples submitted, to specifications upon
which the sale is consummated, or to rep-
resentations 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.

§ 169.17 Inducing breach of contract.

It is an unfair trade practice to induce
or attempt to induce the breach of exist-
ing lawful contracts between competi-
tors and their customers, or their sup-
pliers, by any false or deceptive means
whatsoever, or to interfere with or ob-
struct the performance of any such con-
tractual duties or services by any such
means, with the purpose and effect of
unduly hampering, injuring or prej-
udicing competitors in their business.

§ 169.18 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 per-
mit or cause to be given, money or any-
thing of value to agents, employees, or
representatives of customers or prospec-


Chapter I—Federal

tive customers, or to agents, employees,
or representatives of competitors, cus-
tomers 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 manu-
factured or sold by such industry mem-
ber or the maker of such gift or offer,
or to influence such employers or prin-
cipals to refrain from dealing in the
products of competitors or from dealing
' or contracting to deal with competitors.

§ 169.19 Discrimination.

(a) Frohibited 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, purported allow-
ance for alleged imperfect workmanship
or defective material, or other form of
price differential, where such rebate, re-
fund, discount, credit, purported allow-
ance for alleged imperfect workmanship
or defective material, or other form of
price differential, effects a discrimina-
tion in price between different purchas-
ers of goods of like grade and quality,
where either or any of the purchases in-
volved therein are in commerce, and
where the effect thereof may be to sub-
Stantially lessen competition or tend to
create & monopoly in any line of com-
merce, 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 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:

Q

Trade Commission $169.19

(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’
Gib 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 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 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 other inter-.
mediary therein where such intermedi-
ary is acting in fact for or in behalf, or:
is subject to the direct or indirect con-
trol, of any party to such transactiom
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 im 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 avail-
able on proportionally equa] terms to all
other customers competing in the distri--
bution of such products or commodities.

(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 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 facil-
ities connected with the processing, han-
dling, sale, or offering for sale of such.

87


oO

§ 169.20

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, uni-
versities, public libraries, churches, hos-
pitals, and charitable institutions not op-
erated for profit. The foregoing provi-
sions of this section relate to practices
within the purview of the Robinson-Pat-
man Antidiscrimination Act, which act
and the application thereunder of this
section are subject to the limitations ex-
pressed in the amendment to such Rob-
ison-Patman Antidiscrimination Act,
which amendment was approved May
26, 1938, and reads as follows:

Be tt enacted by the Senate and House
of Representatives of the United States of
America tn Congress assembled, That noth-
ing in the Act approved June 19, 1936 (Pub-
lic, Numbered 692, Seventy-fourth Congress,
second session), Known 4s the Robinson-
Patman Antidiscrimination Act, shall apply
to purchases of their supplies for their own
use by schools, colleges, universities, public
Hibraries, churches, hospifals, 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, 18a, 13b, 13c, 21a)

§ 169.20 Aiding or abetting use of un-
fair trade practices.

Tt is an unfair trade practice for any
person to aid, abet, coerce, or induce
another, directly or indirectly to use or
promote the use of any unfair trade
practice specified in the regulations in
this part.

PART 171—HOUSEHOLD FABRIC
DYE INDUSTRY

Group I

Bec,

171.0 Definitions.

171.1 Misuse of the terms “all fabric”, “all
purpose”, and similar representa-
tions, as applied to industry dyes

; or tints. - .
171. Misrepresentations as to coverage of

dyes or tints.

Title. 16—-Commercial Practices

Sec.

1718  Misrepresentations as to colors or
shades obtainable.

171.44 Use of the words “fast”, “fadeless”,
“fade-proof”, “unfadable”’, “sun-
fast”, “wash-fast”, and representa-
tions of similar import.

171.6 Deception respecting efficacy of color
removers.

171.6 Disclosure of sponsor and other in-
formation.

171.7. Guarantees, warranties, etc.

171.8 Confusion as to “tint” and “dye”.

171.9 Other forms of deception.

171.10 Improper use of demonstrators and
payment of “spiffs”, “push money”,
etc.

171.11 Exclusive or pre-emptive deals to
eliminate or suppress competition.

171.12 Advertising or promotional allow-
ances.

171.13 Other discriminations contrary to

aw.

171.14 Miscellaneous unfair trade practices.

171.15 Aiding or abetting use of unfair trade

practices.

AurHoriry: The provisions of this Part
171 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 171
appear at 12 FR. 3478, May 29, 1947; 12 F.R.
3689, June 6, 1947, unless otherwise noted.

§ 171.0 Definitions.

AS used in this part, the following
terms shall have the respective definition

’ set forth below:

(a) Industry product. Shall mean
any dye, tint, or color remover marketed
for use in the home in connection with
fabrics.

(bo) Fabric. Shall mean any material
Cncluding yarn) which is spun, woven,
knitted, or felted from natural and/or
man-made textile fibers or filaments,
which material is commercially produced
and used in garments, household fur-
nishings or decorations in the home.

(c) Dye. Shall mean a preparation
marketed by industry members for home
use in restoring color or imparting a new
or different color to fabrics by dyeing or
tinting them. :

(d) Color remover. Shall mean a
preparation marketed by industry mem-
pers for home use in removing color
and/or removing stains from fabrics
preparatory to re-dyeing or re-tinting
them, or for home use in removing stains
from white fabrics.