Doll And Stuffed Toy Industry
16 CFR Part 173 · Trade practice rules · in the Code of Federal Regulations 1949-1976 (11 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1949 CFR
Text (1976 edition, OCR)
§ 173.1
PART 173—-DOLL AND STUFFED
TOY INDUSTRY *
Group I
See.
178.1 Imitation or simulation of trade-
marks, trade names, etc.
178.3 Defamation of competitora or dis-
paragement of their products.
173.8 Discrimination.
173.4 Unfair threats of infringement suits,
178.5 Commercial bribery.
178.6 Selling below cost.
173.7. Consignment distribution.
178.8 Enticing away employees of com-
petitors.
173.9 Use of lottery schemes.
173.10 Combination or coercion to fix
prices, suppress competition, or
restrain trade,
173.11 Tie-In sales.
173.12 Deception in general,
178.18 Deception as to used material or
merchandise,
178.14 Deception as to status of distributor.
173.15 Discriminatory returns.
178.16 False invoicing.
Group I
178.101 Unwarranted return of merchandise.
173.102 Arbitration.
AvutHorITY: The provisions of this Part
173 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 173
appear at 12 F.R. 4225, June 28, 1947, unlesg
otherwise noted. .
Group I
§ 173.1 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.
§ 173.2 Defamation of competitors or
disparagement of their products.
The defamation of competitors by
falsely imputing to them dishonorable
business conduct, inability to perform
contracts, questionable credit standing,
or by other false representations, or the
false disparagement of the grade, qual-
ity, or manufacture of the products of
competitors, or of their business methods,
selling prices, values, credit terms, pol-
icies, or services, is an unfair trade
practice.
1The term “dolls or stuffed toys,” as used
in this part, shali be understood to include
not only dolis and stuffed toys, but also parts
and accessories therefor.
Title 16—Commerciai Practices
§ 173.3 Discrimination.
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price discrim-
ination. In the marketing in commerce
of dolls or stuffed toys of like grade and
quality for use, consumption, or resale
within the jurisdiction of the United
States, and subject to subparagraph (1)
@), GD, and (iil) of this paragraph, it is
an unfair trade practice for any member
of the industry engaged therein to dis-
criminate in price between different pur-
chasers where the effect thereof may be
substantially to lessen competition or
tend to create a monopoly in any line of
commerce, or to injure, destroy, or pre-
vent competition with such industry
member or with any person who know-
ingly receives the benefit of such dis-
crimination or with their customers.
(1) The inhibitions against such dis-
crimination in price shall be applicable
irrespective of whether the discrimina-
tion in the price itself is effected in the
form, or through the means, of rebates,
refunds, discounts, credits, allowances,
or other form of price differential, and
whether such discounts, refunds, or
other form of price differential, are given
for early buying or are accomplished
through false dating of deliveries or by
any other means or in any other manner.
() However, nothing contained in
this section shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture, sale,
or delivery resulting from the differing
Methods or quantities in which dolls or
stuffed toys are sold or delivered to said
purchasers.
ii) Nor shall anything contained in
this section prevent persons engaged in
selling such products in commerce from
selecting their own customers in bona
fide transactions and not in restraint of
trade.
(ii) Nor shall anything contained tn
this section prevent price changes from
time to time where made in response tu
changing conditions affecting either (a)
the market for the products concerned,
or (b) the marketability of the products,
such as, but not limited to, actual or im-
minent deterioration of perishable goods,
obsolescence of seasonal goods, distress
sales under court process, or sales in good
faith in discontinuance of business in the
products concerned.
(b) ‘Prohibited brokerage or commis-
stons. In the selling of dolls or stuffed
toys in commerce, it is an unfair trade
Chapter I—Federal
practice for any member of the industry
engaged therein to pay or grant, or to
receive or accept, any commission,
brokerage, or other compensation, or any
allowance or discount in lieu thereof, ex-
cept for services rendered in connection
with the sale or purchase of such prod-
ucts, either to the other party to such
transaction or to an agent, representa-
tive, resident buyer, or other intermedi-
ary therein, where such agent, repre-
sentative, resident buyer, or other 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.
(c) Prohibited advertising or promo-
tional allowances, etc. In the selling of
dolls or stuffed toys in commerce by any
member of the industry, and in the
course thereof, it is an unfair trade prac-
tice for such member to pay or contract
for the payment of any advertising or
promotional allowances or any other
thing of value to or for the benefit of his
customer as compensation or in consid-
eration for certain services or facilities
furnished by or through such customer,
unless such payment or consideration is
available on proportionally equal terms
to all other customers of such member
competing in the distribution of such
Products,
(1) As used in this paragraph, the
certain services or facilities referred to
are such as are furnished by or through
the customer in connection with the
processing, handling, sale, or offering for
sale, of such industry member’s prod-
ucts.
(d) Prohivdited discrimination in serv-
ices or facilities. In the sale of dolls or
stuffed toys bought for resale, with or
without processing, it is an unfair trade
practice for any member of the industry
to discriminate in favor of one purchaser
against another purchaser by furnishing
certain services or facilities upon terms
not accorded to all purchasers on pro-
Portionally equal terms.
(1) The services or facilities referred
to in this paragraph are such as are con-
nected with the processing, handling,
sale, or offering for sale, of the products
purchased, and the term “furnishing” as
used in this paragraph shall be con-
strued as including contracting to fur-
nish, and contributing to the furnishing
of, the services or facilities.
(e) Inducing or receiving an illegal
discrimination in price. It is an unfair
Trade Commission § 173.6
trade practice for any member of the
industry, in the course of commerce in
which he is engaged, knowingly to induce
or receive a discrimination in price
which is prohibited by the foregoing pro-
visions of this section.
(f) Exemptions. The inhibitions of
this section shall not apply to purchases
of their suppiies for their own use by
schools, coileges, universities, public li-
braries, churches, hospitals, and chari-
table institutions not operated for profit.
(Sec. 2, 38 Stat. 730, as amended, secs. 2, 8, 4,
49 Stat. 1927, 1528, ch. 288, 52 Stat. 446;
15 U. S.C. 18, 18a, 18b, 13¢, 21a)
8173.4 Unfair threats of infringement
suits,
The circulation of threats of suit for
infringement of patents or trade-marks
among customers or prospective custom-
ers of competitors, not made in good
faith but for the purpose or with the
effect of thereby harassing or intimidat-
ing such customers or prospective cus-
tomers, or of unduly hampering, injur-
ing, or prejudicing competitors in their
business, is an unfair trade practice.
§ 173.5 Commercial bribery.
It 1s an unfair trade practice for a
member of the industry to give, or offer
to give, or permit or cause to be given,
directly or indirectly, money or anything
of value to agents, employees, or repre«
sentatives of customers or prospective
customers, or to agents, employees, or
representatives of competitors’ custom-
ers or prospective customers, without the
knowledge of their employers or princt-
pals, as an inducement to influence their
employers or principals to purchase or
contract to purchase dolls or stuffed toys
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 competitora,
§ 173.6 Selling below cost.
The practice of selling dolls or stuffed
toys below the seller’s cost, when pursued
with wrongful intent of thereby injuring
& competitor and where the effect of such
practice is to wumreasonably restrain
trade, tend to create a monopoly, or sub-
stantially lessen competition, is an un-
fair trade practice.
This section is not to be construed as
prohibiting all sales below cost, but only
such selling below the seller’s cost as
is resorted to and pursued as a monopo-
99
$173.7
‘istic practice with the wrongful intent
‘referred to and coupled with the effect
-of unreasonably restraining trade, tend-
:ing to create a monopoly, or substantially
-lessening competition.
‘The costs referred to in this 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.
§ 173.7 Consignment distribution.
It is an unfair trade practice for any
member of the industry to employ the
practice of shipping dolls or stuffed toys
on consignment or pretended consign~
ment for the purpose and with the effect
of artificially clogging or closing trade
outlets and unduly restricting competi-
tors’ use of said trade outlets in getting
their products to consumers through reg-
ular channels of distribution, and with
the effects of thereby injuring, destroy-
ing, or preventing competition, or tend-
ing to create a monopoly or to
unreasonably restrain trade. However,
nothing in this section shall be construed
as restricting or preventing consignment
shipping or marketing of dolls or stuffed
toys in good faith where suppression of
competition, restraint of trade, or undue
4{nterference with competitors’ use of the
usual channels of distribution, is not
-effected.
-§ 173.8 Enticing away employees of
competitors.
It is an unfair trade practice for any
-member of the industry wilfully to entice
-away empioyees of competitors with the
“intent and effect of thereby unduly
‘hampering or injuring competitors in
their business and destroying or sub-
stantially lessening competition: Pro-
vided, That nothing in this section shall
be construed as prohibiting employees or
agents from seeking or obtaining more
favorable employment.
§ 173.9 Use of lottery schemes.
It is an unfair trade practice for any
member of the industry to sell, distribute,
or promote the sale or distribution of
dolis or stuffed toys by means of a game
of chance, gift enterprise, or lottery
scheme.
§ 173.10 Combinatiou or coerciou 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:
' § 173.12
Title 16—Commercial Practices
(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
members of the industry, or with one or
more other persons, to unlawfully fix,
maintain, or enhance prices, suppress
competition, or restrain trade.
§ 173.11 Tie-in sales.
The practice of coercing or requiring
the purchase of one or more products as
a prerequisite or condition to the pur-
chase of one or more other products,
where the effect may be to substantially
lessen competition or tend to create a
monopoly or to unreasonably restrain
trade, is an unfair trade practice.
Deception in general.
It is an unfair trade practice for any
member of the industry to use, or cause
or promote the use of, any trade promo-
tional literature, advertising matter,
guarantee, warranty, mark, brand, label,
designation, or representation, however
disseminated or published, which has the
capacity and tendency or effect of mis-
leading or deceiving purchasers, prospec-
tive purchasers, or the consuming public:
(a) With respect to the grade, quality,
quantity, weight, size, type, kind, brand,
color, design, characteristics, workman-
ship, construction, composition, mate-
rial, finish, washability, sanitary prop-
erties, performance, durability, or origin
of any doll or stuffed toy; or
(b) With respect to the price, value, or
terms or conditions of sale, of any doll
or stuffed toy; or
(c) With respect to the manufacture,
distribution, or marketing of any such
product; or
(d) In any other material respect.
§ 173.13 Deception as to used material
or merchandise.
(a) It is an unfair trade practice to
sell, offer for sale, advertise, or otherwise
represent, directly or indirectly, any doll
or stuffed toy as being new when such
product is not in fact new or is not com-
posed wholly of new parts and matertals,
100 .
Chapter I—Federal Trade Commission
(b) In the marketing of dolls or
stuffed toys containing used or second-
hand parts, materials or accessories, it
is an unfair trade practice to fail or re-
fuse to make full and nondeceptive dis-
closure, by tag or label attached to the
merchandise and in all advertising and
trade promotional literature, of the fact
that such dolls or stuffed toys, or parts
or materials or accessories, are not new
but are used or secondhand, such failure
or refusal to disclose having the capacity
and tendency or effect of misleading or
deceiving purchasers, prospective pur-
chasers, or the consuming public.
(ec) Nothing in this section shall be
construed as permitting the saie or dis-
tribution of dolls or stuffed toys which
contain any unsanitary materials.
§ 173.14 Deception as to status of dis-
tribntor.
. The practice by a member of the in-
dustry of selling or marketing dolls or
stuffed toys through a pretended in-
dependent distributor, in such manner
or under such circumstances as to lead
purchasers or prospective purchasers to
believe that such distributor is independ-
ent of such industry member when such
is not the fact, is an unfair trade prac-
tice.
§ 173.15 Discriminatory returns.
It is an unfair trade practice for any
member of the Industry engaged in com-
merce to discriminate in favor of one
customer-purchaser against another
customer-purchaser of dolls or stuffed
toys, bought from such member for re-
sale, by contracting to furnish, or fur-
nishing in connection therewith, upon
terms not accorded to all customer-pur-
chasers on proportionally equal terms,
the service of facility whereby such fa-
vored purchaser is accorded the privilege
of returning products so purchased and
receiving therefor credit or refund of
purchase price.
However, nothing in §§ 173.1 to 173.16
shall be construed as prohibiting the re-
turn of merchandise by purchasers for
credit or refund of purchase price be-
cause such merchandise is defective in
material, workmanship, or in any other
respect, contrary to guarantee, warranty,
or purchase contract.
8173.16 False invoicing.
Withholding from or inserting in an
invoice, billing, or statement any mate-
rial information by reason of which omis-
§ 173.102
sion or insertlon a false record is made,
wholly or in part, of the transaction
which such invoice, billing, or statement
purports to represent, with the effect of
thereby misleading or deceiving pur-
chasers, prospective purchasers, or the
consuming public, ls an unfair trade
practice.
Group I
§ 173.101 Unwarranted return of mer«
ehandise.
The practice, by members of the in-
dustry, of selling any doll or stuffed toy
and later permitting the purchaser to
return it for credit or refund of purchase
price, without just cause, creates waste
and loss, increases the cost of doing busi-
ness to the detriment of both the in-
dustry and the public, and {s condemned
by the industry, subject, however, to the
requirements and limitations set forth
in the provisions of §§ 173.3 and 173.15,
§ 173.102 Arbitration.
The industry approves the practice of
handling business disputes between
members 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 arbitration.
PART 175—OFFICE MACHINE
MARKETING INDUSTRY
Group I
Sec.
175.0 Definitions.
175.1 Deception (general).
175.2. Deceptive concealment of fact that
machine is not new.
175.3 Misuse of the terms “new,” “demon-
strator,” “factory rebuilt,’ “ree
pullt,” “remanufactured, “recon-
ditioned,” and “overhauled” as ap-
plied to office machines.
175.4 Typewriters; deception as to being
“new.”
175.5 Typewriters; misuse of the terms
“demonstrator,” “factory rebutlt,”
“rebullt,” -“remanufactured,” “ree
conditioned,” and “overhauled” as
applied to typewriters.
175.6 Alteration or removal of sertal
numbers.
175.7 Deception as to “discontinued” or
“obsolete” models.
175.8 Misrepresentation as to character of
business.
175.9 Misrepresenting products as cone
forming to standard.
101