Library Binding Industry

16 CFR Part 220 · Trade practice rules · in the Code of Federal Regulations 1959-1977 (12 annual editions)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

Latest edition: Library of Congress, 1977 CFR · Earliest edition: 1959 CFR

Text (1977 edition, OCR)

Chapter I—Federal

petitor, or the services or facilities furnished
by a competitor. See Sec. 2-b, Clayton Act.

8217.19 Aiding or abetting use of un-
fair trade practices.

It is an unfair trade practice for any
person to aid, abet, coerce, or induce an-
other, directly or indirectly, to use or
promote the use of any unfair trade
practice specified in the rules in this

Group

8 217.101 Maintenance of accurate rec-
ords.

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

§ 217.102 Price lists.

(a) The industry approves the practice
of each individual] member of the in-
dustry independently publishing and cir-
culating to the purchasing trade his own
price lists.

(b) The industry approves the prac-
tice of making the terms of sale a part
of all published price schedules.

CoMMITTERE ON TRADE PRACTICES
8 217.201 Industry committee.

The provisions of § 16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.
[21 FR. 1174, Feb. 21, 1956]

PART 220—LIBRARY BINDING

INDUSTRY

Sec.

220.0 Industry definition.

Group I

220.1 Deception (general).

220.2 Guarantees and warranties.

220.3 Other deception.

220.4 Deceptive representations as to prod-
ucts conforming to a standard or
specification.

220.5 Fictitious prices, price lists, etc.

220.6 Selling below cost.

220.7 Defamation of competitors or false
disparagement of their products.

220.8 Enticing away employees of competi-
tors.

220.9 Commercial bribery.

220.10 Procurement of competitors’ confi-
dential information.

220.11 Unlawful interference with competi-
tors’ purchases or sales.

220.12 Arrangements to exclude sale of com-
petitors’ products.

220.18 Tie-in sales; coercing purchase of

one product as a prerequisite to
the purchase of other products,

90-059—77———15

Trade Commission § 290.1
Sec.
220.14 Unfair threats of infringement sults.

220.16
220.16

Inducing breach of contract.

Prohibited forms of trade restraints
(unlawful price fixing, etc.)

Prohibited discrimination.

Alding or abetting unfair trade prec
tices.

AUTHORITY: The provisions of this Part 220
issued under secs. 6, 5, 28 Stat. 731, 710; 15
U.S.C. 46, 45, unless otherwise noted.

Source: The provisions of this Part 220
appear at 19 F.R. 6310, Aug. 20, 1954, unless
otherwise noted.

§ 220.0 Industry definition.

Members of this industry are those
persons, firms, corporations, and organ-
izations engaged in the business of re-
binding and prebinding of books, peritod-
icals, and other documents especially
for use in public and private lbraries.

GROUP TI
§ 220.1 Deception (general).

It is an unfair trade practice for any
industry member to use, or cause or
promote the use of, any advertising mat-
ter, guarantee, warranty, trade promo-
tional literature, mark, brand, label, or
other representation, however dtssemi-
nated or published, which has the
capacity and tendency or effect of mis-
leading or deceiving purchasers, pro-
spective purchasers, or the consuming
public with respect to the grade, quality,
conformity to a trade standard, material,
composition, construction, fabrication,
manufacture, distribution, origin, or
price or terms of sale, of library binding,
or which is false, misleading, or decep-
tive in any other material respect.

Among the various deceptive practices
inhibited by the paragraph above are the
following:

(a) Misrepresentation as to character
of business. It is an unfair trade prac-
tice for any member of the industry to
represent, directly cr indirectly, through
the use of any word or term in his cor-
porate or trade name, in his advertising
or otherwise, that he is a Mbrary binder,
or that he is the owner or operator of
a library bindery, when such is not the
fact, or in any other manner to misrep-
resent the character, extent, volume, or
type of his business.

(b) Use of the word “free”. In con-
nection with the sale, offering for sale, or
distribution of industry products, it is an
unfair trade practice to use the word
“free,” or any other word or words of

220.17
220.18


§ 220.2

similar import, in advertisements or in
other offers to the public, as descriptive
of an article of merchandise, or service,
which is not an unconditional gift, under
the following circumstances: |

(1) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the “free” article
of merchandise or service offered are not
clearly and conspicuously set forth at
the outset so as to leave no reasonable
probability that the terms of the offer
will be misunderstood; and, regardiess of
such disclosure:

(2) When, with respect to any article
of merchandise required to be purchased
in order to obtain the “free” article or
service, the offerer (i) increases the or-
dinary and usual price of such article of
merchandise, or (li) reduces its quality,
or (ii) reduces the quantity or size
thereof.

Norg: The disclosure required by subsec-
tion b (1) of this section shall appear in close
conjunction with the word “free” (or other
word or words of similar import) wherever
such word first appears in each advertise-
ment or offer. A disclosure in the form of a
footnote, to which reference is made by use
of an asterisk or other symbo! placed next to
the word “free,” will not be regarded as
compliance.

(ec) Misbranding of library binding.
The false or deceptive marking, brand-
ing, or labeling of any library binding
with respect to the grade, quality, use,
effect, purpose, materiai, conformity to
a trade standard, origin, preparation,
manufacture, or distribution of such
library binding, or concerning any com-
ponent thereof, or in any other material
respect, is an unfair trade practice.

§ 220.2 Guarantees and warranties.

(a) It is an unfair trade practice to
use or cause to be used any guarantee or
warranty which is false, misleading, de-
ceptive, or unfair to the purchasers of
library binding.

(b) Within the inhibitions of this sec-
tion is the use of the following types of
guarantees:

(1) Guarantees containing  state-
ments, representations, or assertions
which have the capacity and tendency
or effect of misleading and deceiving tn
any material respect; or

(2) Guarantees which are of such
form, text, or character as to import,
imply, or represent that the guarantee

Title 16—Commercial Practices

is broader than is in fact true, or will
afford more protection and service to
purchasers or users than is in fact true;
or

(3) Guarantees in which any condi-
tion, qualification, or contingency ap-
plied by the guarantor thereto is not
fully and nondeceptively stated therein,
or is stated in such manner or form as
to be deceptively minimized, obscured,
or concealed, wholly or tn 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 suffil-
ciently aware of certain contingencies
or conditions applicable to such guar-
antees which materially lessen the value
or protection thereof as guarantees to
purchasers or users; or

(5) Guarantees which have the ca-
pacity and tendency or effect of other-
wise misrepresenting the performance,
serviceability, durability, or lasting qual-
ities of library binding, such as, for
example, a guarantee extending for a
certain number of years or other iong
period of time when the abliiity of the li-
brary binding to last, endure, or remain
serviceable for such period of time has
not been established by actual experience
or by competent and adequate tests defi-
nitely showing in either case that the
library binding has such lasting quali-
ties under the conditions encountered or
to be encountered in the respective local-
ity where the library binding is sold and
used under the guarantee; or

(6) Guarantees under which the
guarantor fails or refuses to observe
scrupulously his obligations thereunder
or fails or refuses to make good on claims
coming reasonably within the terms of
the guarantee; or

(7) Guarantees which are otherwise
false, misleading, or deceptive.

(¢) This section shall be applicable
not only to guarantees, but also to war-
ranties, to purported warranties and
guarantees, and to any promise or rep-
resentation in the nature of or purport-
ing to be a guarantee or warranty.
§ 220.3 Other deception.

(a) Deceptive use and imitation of
trade or corporate names, trade-marks,

etc. It is an unfair trade practice for
any member of the industry —

216


Chapter |—Federal

_ (1) To imitate, or cause to be imitated,
or directly or indirectly promote the imi-
tation of, the trade-marks, trade names,
or other exclusively owned symbols or
marks of identification of competitors in
@ manner having the capacity and tend-
ency or effect of misleading or deceiv-
ing purchasers, prospective purchasers,
or the buying public; or

(2) To use any trade name, corporate
name, trade-mark, or other trade desig-
nation which has the capacity and tend-
ency or effect of misleading or decelv-
ing purchasers or prospective purchasers
as to the character, name, nature, or
origin of any library bindery, or of any
material used therein, or which is false
or misleading in any other respect.

(b) False or deceptive selling methods.
To use or promote the use of any selling
method or credit term which has the
capacity and tendency or effect of mis-
leading or deceiving the purchasing or
consuming public is an unfair trade
practice.

(ec) Substitution of products. The
practice of shipping or dellvering brary
binding which does not conform to speci-
fications upon which the sale is consum-~
mated, or to representations made prior
to securing the order, without the con-
sent of the purchasers to such substitu-
tion, and with the capacity and tendency
or effect of misleading or deceiving pur-
chasers, is an unfair trade practice.

(d) False invoicing. Withholding from
or inserting in invoices any statement
or information by reason of which omis-
sion or insertion a false record Is made,
wholly or in part, of the transactions
represented on the face of such invoices,
with the capacity and tendency or effect
of thereby misleading or deceiving pur-
chasers or prospective purchasers, is an
unfair trade practice.

§ 220.4 Deceptive representations as to
products conforming to a standard or
specification.

In the sale, offering for sale, or dis-
tribution of any library binding, it is an
unfair trade practice:

(a) To falsely represent or imply that
any such library binding conforms to the
requirements of any standard or specifi-
cation, whether established or recog-
nized by @ department or unit of a city
or State government, or of the Federal
Government, by trade practice, or other-
wise.

Trade Commission § 990.7

(b) To represent or imply that such
library binding conforms to the require-
ments of any standard or specification
without clearly disclosing the identity of
the standard or specification to which
reference is made. Such disclosure shall
be by reference to the standard or speci-
fication on all labels, invoices, sales liter-
ature, and other advertising containing
such representation or implication.

(c) For any member of the industry to
claim or imply that the library binding
conforms to any standard or speci-
fication which is inapplicable or which
has been rescinded, revised, superseded,
or amended, and thereby mislead or.de-
celve purchasers or prospective pur-
chasers.

§ 220.5 Fictitious prices, price lists, ete.

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations, price lsts,
terms or conditions of sale, or false .or
misleading reports as to production or
sales, with the capacity and tendency or
effect of misleading or deceiving pur-
chasers or prospective purchasers, or the
advertising, sale, or offering for sale of
library binding at prices purporting to be
reduced from what are in fact fictitious
prices, or at purported reductions in
prices when such purported reductions
are in fact fictitious or are otherwise
misleading or deceptive, is an unfair
trade practice.

§.220.6 Selling below cost.

The practice of selling industry prod-
ucts at a price less than the cost thereof
to the seller, with the purpose or intent,
and where the effect may be, to injure,
suppress, or stifle competition or tend to
create a monopoly in the production or
sale of such products, is an unfair trade
practice. As used in this section, the
term “cost” means the total cost to the
seller, including the costs of acquisition,
processing, preparation for marketing,
sale, and delivery.

§ 220.7 Defamation of competitors or
false disparagement of their prod-
ucts.

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
their Ubrary binding, or of their busi-
ness methods, selling prices, values,

217


§ 220.8

credit terms, policies, services, or condi-

tions of employment, is an unfair trade
practice.

§ 220.8 Enticing away employees of
compctitors.

Knowingly enticing away employees
or sales representatives of competitors
under any circumstance having the ca-
pacity and tendency or effect of sub-
stantially injuring or lessening present
or potential competition is an unfair
trade practice: Provided, That nothing
in this section shall be construed as pro-
hibiting employees from seeking more
favorable employment, or as prohibiting
employers from hiring or offering em-
ployment to employees of competitors
in good faith and not for the purpose
of injuring, destroying, or preventing
competition.

$220.9 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
wepresentatives of customers or prospec-
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.

§ 220.10 Procurement of competitors’
confidential information.

It is an unfair trade practice for any
member of the industry to obtain in-
formation concerning the business of a
competitor 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
so as substantially to injure competition
or unreasonably restrain trade.

§ 220.11 Unlawful interference with
competitors’ purchases or sales.

It is an unfair trade practice for any
industry member, by means of any mo-
nopolistic practices, or through combina-
tion, conspiracy, coercion, boycott,

Title 16—Commercial Practices

threats, or any other unlawful means, di~-
rectly or indirectly, to interfere with a
competitor’s right to purchase his raw
materials and supplies from whomsoever
he chooses, or to sell his product to
whomsoever he chooses.

§ 220.12 Arrangements to exclude sale
of competitors’ products.

It is an unfair trade practice for any
member of the industry to sell or con~
tract for the sale of any industry prod-
ucts for use or resale, or to fix a price
charged therefor, or discount from, or
rebate upon, such price, on the condi-
tion, agreement, or understanding that
the purchaser thereof shal! not use or
deal in new, used, or rebuilt products of
a competitor or competitors of such in-
dustry member where the effect of such
sale or contract for sale, or such condi-
tion, agreement, or understanding, may
be to substantially lessen competition or
tend to create a monopoly in any line
of commerce.

§ 220.13 Tie-in sales; coercing purchase
of one product as a prerequisite to
the purchase of other products.

The practice of coercing the purchase
of one or more types of library binding as

'&@ prerequisite to the purchase of one or

more other types of library binding,
where the effect may be substantially to
lessen competition or tend to create a
monopoly or unreasonably to restrain
trade, is an unfair trade practice.

§ 220.14 Unfair threats of infringement
suits,

The circulation of threats of sult 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,
injuring, or prejudicing competitors in
their business, is an unfair trade
practice.

§ 220.15 Inducing breach of contract.

(a) Knowingly inducing or attempting
to induce the breach of existing lawful
contracts between competitors and their
customers or their suppliers, or interfer~
ing with or obstructing the performance
of any such contractual duties or sery-
ices, under any circumstance having the
capacity and tendency or effect of sub-
stantially injuring or lessening present.

218


Chapter |—Federal Trade Commission

or potential competition, is an unfair
trade practice.

(b) Nothing in this section is intended
to imply that it is improper for an in-
dustry member to solicit the business of
@ customer of a competing industry
member; nor is the section to be con-
strued as in anywise authorizing any
agreement, understanding, or planned
common course of action by two or more
industry members not to solicit business
from the customers of either of them, or
from customers of any other industry
member.

§ 220.16 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).’

It is an unfair trade practice for any
member of the industry, either directly
or indirectly, to engage in any planned
common course of action, or to enter into
or take part in any undevstanding, agree-
ment, combination, or conspiracy, with
one or more members of the industry,
or with any other person or persons, to
fix or maintain the price of any goods
or otherwise unlawfully to restrain trade;
or to use any form of threat, intimida-
tion, or coercion to induce any member
of the industry or other person or per-
sons to engage in any such planned
common course of action, or to become
a party to any such understanding,
agreement, combination, or conspiracy.

8 220.17 Prohibited discrimination.*

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price discrimi-
nation, 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, freight or other

1The inhibitions of this section ere sub-
ject to Public Law 542, approved July 14,
1952, 66 Stat. 682 (the McGutre Act).

2 As used in § 220.17, the word “commerce”
means “trade or commerce among the sev-
eral States and with foreign nations, or be-
tween the District of Columbia or any Ter-
ritory of the United States and any State,
Territory, or foreign nation, or between any
insular possessions or other places under the
jurisdiction of the United States, or between
any such possession or place and any State or
Territory of the United States or the District
of Columbia or any foreign nation, or within
the District of Columbia or any Territory or
any insular possession or other place under
the jurisdiction of the United States.”

§ 290.17

transportation cost or any percentage
thereof, or other form of price differ-
ential, where such rebate, refund, dis-
count, credit, freight or other trans-
portation cost or any percentage thereof,
or other form of price differential, effects
@ discrimination in price between differ-
ent purchasers of goods of like grade and
quality, where either or any of the pur-
chascs involved therein are in commerce,
and 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 any person who
elther 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, con-
sumption, or resale within any place
under the jurisdiction of the United
States;

(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture, sale,
or delivery resulting from the differing
metheds or quantities in which such
commodities are to such purchasers sold:
or delivered;

(3) That nothing contained in this
paragraph 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;

(4) That nothing contained in this
paragraph shall prevent price changes
from time to time where in response to
changing conditions affecting the mar-
ket for or the marketability of the goods
concerned, such aS but not limited to
obsolescence of seasonal goods, distress
sales under court process, or sales in
good faith in discontinuance of business
in the goods concerned.

(b) Prohibited brokerage and com-
missions. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-
merce, to pay or grant, or to recelve or
accept, anything of value as a commis~
sion, brokerage, or other compensation,
or any allowance or discount in Heu
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-

219


§ 290.18

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.

(ec) 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 process-
ing, handling, sale, or offering for sale
of any products or commodities manu-
factured, sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

(d) Inducing or receiving an illegal
discrimination in price. It is an unfai.
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 fore-
going provisions of this section.

(e) Prohibited discriminatory return
and exchange privileges. Itis an unfair
trade practice for any member of the
industry to grant or contract to grant
privileges of merchandise return, refund,
exchange, or other special privileges,
upon terms which, under the pro-
visions of this section, effect any unlaw-
ful discrimination in price, services, or
facilities in favor of one purchaser
against another purchaser or purchasers.

(f) Exemptions. The inhibitions of
this section shall not apply to purchases
of their supplies for their own use by
schools, colleges, universities, public
lbraries, churches, hospitals, and chari-
table institutions not operated for profit.

Nots: In complaint proceedings charging
discrimination in price or services for facili-
ties furnished, and upon proof having been
made of such discrimination, the burden of
rebutting the prima facie case thus made
by showing justification shall be upon the
person charged; and unless justification
shall be affrmativeiy shown, the Commission
fs authorized to issue an order terminating
the discrimination: Provided, however, That
nothing contained in this section shall pre-
vent a seller rebutting the prima facie case
thus made by showing that hie lower price

Title 16—Commercial Practices

or the furnishing of services or facilities to
any purchaser or purchasers was made in
good faith to meet an equally low price of
a competitor, or the services or facilities
furnished by a competitor. See sec, 2 (b)
Clayton Act.

§ 220.18 _ Aiding or abetting unfair trade
practices.

It is an unfair trade practice for any
person, firm, or corporation to aid, abet,
coerce, or induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in §§ 220.1
to 220.18, inclusive.

PART 221—COSMETIC AND TOILET
PREPARATIONS INDUSTRY

Sec.

221.1 Prohibited discrimination,

221.2 Misrepresentation in general,

221.3 Deception as to origin,

221.4 Deceptive imitation of trademarks,
trade names, etc.

221.5 Misrepresentation as to character of
business,

221.6 Use of the word “free.”

221.7 Deceptive pricing.

221.8 Passing off an industry product as
and for the product of a com-
petitor.

221.9 Defamation of competitors or false
disparagement of their products,

221.10 Commerciai bribery.

221.11 Procurement of competitor’s confi-
dential itnformation by unfair
means and wrongful uss thereof.

221.12 Inducing breach of contract.

221.18 Use of lottery echemes, etc.

221.14 Prohibited forms of trade restraints
(unlawful price fixing, stc.).

221.15 Unfalr threats of infringement suits,

221.16 Exclusive deals.

221.17 Push money,

Aurnorrrr: The provisions of this Part 221
issued under sec. 2, 49 Stat. 1526, secs. 3, 6, 5,
88 Stat. 731, 721, 719; 156 U.S.0. 18, 14, 46, 45,
unless otherwise noted.

Source: The provisions of this Part 221 ap-
pear at 31 F.R. 90598, July 1, 1966, unless
otherwise noted.

§ 221.1 Prohibited discrimination.

(a) Prohibited discriminatory prices,
rebates, discounts, etc. It is an unfair
trade practice for any member of the in-
dustry 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,
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

220