Fire Extinguishing Appliance Industry

16 CFR Part 224 · Trade practice rules · in the Code of Federal Regulations 1959-1978 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1978 CFR · Earliest edition: 1959 CFR

Text (1978 edition, OCR)

§ 223.103

(d) Any major change in adjustment,
shape, or construction should be made
only on the prescription of the doctor.

§ 223.103 Importance of personal fitting.

(a) The industry disapproves the
practice of undertaking to supply an
orthopedic appliance by mail-order
specification and without personal fit-
ting thereof.

(b) The exception to this section is
when the appliance is ordered by a
doctor who assumes full responsibility
for the accuracy of fit; or when dupli-
cating an appliance originally pre-
scribed by a doctor.

§ 223.104 Sharing of improved techniques.

Believing that the interest of the or-
thopedically handicapped is its first
concern, the industry favors making
available to all of its members and the
general public any improved technique
that may be used or developed by any
of its members in respect to the
making, fitting, aligning, or servicing
of industry products. Further, the in-
dustry desires to be an active and co-
operative factor in all progressive de-
velopments of improved techniques
that will contribute to the weifare and
comfort of the orthopedically handi-
capped.

PART 224—FiRE EXTINGUISHING
APPLIANCE IHDUSTRY

Sec.
224.0 Definitions.

Group 1

224.1 Muisrepresentation and deception in
the sale of industry products.

224.2 Disclosure of limitations and warning
of hazards.

224.3 Use of the word “free.”

224.4 False and misleading price quota-
tions, etc.

224.5 Substitution of products.

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

224.7 Misrepresentation as to character of

business.

224.8 Misrepresenting products as con-
forming to standard.

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

224.10 Procurement of competitors’ confi-
dential information.

224.11 Enticing away employees of com-
petitors.

Titie 16——Commerciai Practices

Sec.

224.12 Defamation of competitors or false
disparagement of their products.

224.13 Commercial bribery.

224.14 Unfair threats of infringement -
suits.

224.15 Selling below cost.

224.16 Inducing breach of contract.

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

224.18 Prohibited discrimination.

224.19 Aiding or abetting use of unfair
trade practices.

Avrnoriry: Secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.

Source: 19 FR 8655, Dec. 17, 1954, unless
otherwise noted.

§ 224.0 Definitions.

As used in this part, the terms “‘in-
dustry member” and “industry prod-
ucts” shall have the foliowing mean-
ings, respectively:

(a) Industry member. Any person,
firm, corporation, or organizatlon en-
gaged in the manufacture, sale, or dis-
tribution of industry products as her-
einafter defined.

(b) Industry products. All appliances
which are manufactured expressly for,
and which are represented as being ca-
pable of, extinguishing fires. Automat-
ic sprinkler systems and automotive
fire apparatuses are not considered
products of the industry.

Groovpr I

§ 224.1 Misrepresentation and deception
in the sale of industry products.

It is an unfair trade practice for any

-industry member to make or publish,

directly or indirectly, any false, mis-
leading, or deceptive statement or rep-
resentation concerning the size, grade,
quality, quantity, substance, origin, ca-
pacity, performance, durability, safety,
or preparation of any fire extinguish-
ing appliance, or any other statement
or representation concerning fire ex-
tinguishing appliances, which is false
or misleading in any material respect
or which has the capacity and tenden-
cy or effect of misleading purchasers
or prospective purchasers. Among the
practices inhibited by this section are:

(a) Representing or implying that an
industry product will extinguish ail
types of fires when such is not the
fact.

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Choptor |—Federal Trade Commission

(b) Representing or implying that
any industry product incorporates ex-
ceptional or exclusive or unique fea-
tures when such is not the fact.

(c) Representing or implying that
the industry member’s fire extinguish-
ing apparatus is the only equipment
used or approved by the Unlted States
Army, Navy, or Air Force, or any other
organization, either civilian or mili-
tary, when such is not the fact.

(da) Representing or implying that an
industry product may be used with ab-
solute safety when such is not the
fact.

$224.2 Disclosure of
warning of hazards.

(a) When the effectiveness of an in-
dustry product is limited to the extin-
guishing of only small or incipient
fires and/or fires involving only com-
bustion of a certain kind or type of
. substance or substances (such as small
or incipient fires involving combustion
of other than oil or inflammable liq-
uids), or when the effectiveness of the
product is dependent upon periodic re-
placement of fluids or other sub-
stances contained therein, or when the
maintenance, handling, or use of the
product involves, or may normally in-
volve, a hazard of personal injury to
the person maintaining or using such
product, it is an unfair trade practice
for any member of the industry to sell,
offer for sale, lease, or rent such in-
dustry product uniess adequate disclo-
sure of such limitations and adequate
warning of such hazards has been per-
manently stamped on an exposed sur-
face of the product, or appears as a
permanent stamping on a durable tag
securely affixed to the product: Pro-
vided, That such disclosure and/or
warning shall be of such size print and
of such conspicuousness as to be read
easily by maintainers and users, and
prospective maintainers and users, of
the product: And provided further,
That when not permanently stamped
on the product itself but on a tag at-
tached thereto, the disclosure or warn-
ing on the tag shall be accompanied by
conspicuous instructions to not
remove such tag from the product.

(b) Such disclosures and/or warning,
in addition to being on or attached to
the product in accordance with the

limitations and

§ 224.4

above requirement, shall appear con-
spicuously in all advertising and sales
presentations relating to the product.

8224.3 Use of the word “free.”

In connection 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 similar import, in ad-
vertisements or in other offers to the
public, as descriptive of an article of
merchandise, or service, which is not
an unconditional gift, under the fol-
lowing circumstances:

(a) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the ‘free’ arti-
cle 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, regardless of such disclosure:

(b) When, with respect to any article
of merchandise required to be pur-
chased in order to obtain the “free”
article or service, the offerer

(1) Increases the ordinary and usual
price of such article of merchandise,
or

(2) Reduces its quality, or

(3) Reduces the quantity or size
thereof.

Nore: The disclosure required by para-
graph (a) 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
advertisement or offer. A disclosure in the
form of a footnote, to which reference is
made by use of an asterisk or other symbol
placed next to the word “free,’”’ will not be
regarded as compliance.

§ 224.4 False and misleading price quota-
tions, etc.

The publishing or circuiating to pur-
chasers or prospective purchasers by
any member of the industry of false or
misleading price quotations, price lists,
or terms or conditions of sale, with the
capacity and tendency or effect of
thereby misleading or deceiving pur-
chasers or prospective purchasers, is
an unfair trade practice.

(24 FR 4327, May 29, 1959]

129


§ 224.5

§ 224.5 Substitution of products.

The practice of shipping or deliver-
ing products which do not conform to
samples submitted, to specifications
upon which the sale is consummated,
or to representations made prior to se-
curing the order, without advising the
purchasers as to sald substitution and
obtaining their consent thereto at or
before the time of shipment or deliv-
ery, is an unfair trade practice.

§ 224.6 Deceptive use of trade or corporate
names, trade-marks, ete.

The: use of any trade name, corpo-
rate name, trade-mark, or other trade
designation which has the capacity
and tendency or effect of misleading
or deceiving the purchasing or con-
suming public as to the name, nature,
efficacy, or origin of any product of
the industry, or any material used
therein, or which is false or misleading
in any other material respect, is an
unfair trade practice.

§ 224.7 Misrepresentation as to character
of business.

It is an unfair trade practice for any
industry member, in the course of or
in connection with the distribution of
industry products, to represent, direct-
ly or indirectly, that he is a producer
or manufacturer of industry products
when such is not the fact, or in any
other manner to misrepresent the
character, extent, or type of his busi-
ness.

§ 224.8 Misrepresenting products as con-
forming to standard.

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

§ 224.9 Imitation of trade-marks, trade
names, ete.

The imitation or simulation of the
trade-marks, trade names, brands, or
labels of competitors, with the capac-
ity and tendency or effect of mislead-
ing or deceiving the purchasing or con-

Title 16—Commercial Practices

suming public, is an unfair trade prac-
tice.

§ 224.10 Procurement of competitors’ con-
fidential 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 represen-
tations, 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 competitor in his business or to
suppress competition or unreasonably
restrain trade.

§ 224.11 Enticing away employecs of com-
petitors.

It is an unfair trade practice for any
member of the industry wilfully to
entice away employees or sales repre-
sentatives 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 notning in this section
shall be construed as prohibiting em-
ployecs from seeking more favorable
employment, or as prohibiting employ-
ers from hiring or offering employ-
ment to employees of competitors in
good faith and not for the purpose of
injuring, destroying, or preventing
competition.

§ 224.12 Defamation of competitors or
false disparagement of their products.

The defamation of competitors by
falsely imputing to them dishonorable
conduct, inability to perform con-
tracts, questionable credit standing, or
by other false representations, or the
false disparagement of competitors’
products in any respect, or of their
business methods, selling prices,
vaiues, credit terms, policies, or ser-
vices, is an unfair trade practice.

§ 224.13 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
permit or cause to be given, money or
anything of value to agents, employ-
ees, or representatives of customers or

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Chapter |—Federai Trade Commissien

prospective customers, or to agents,
employees, or representatives of com-
petitors’ customers or prospective cus-
tomers, without the knowiedge 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 influ-
ence such employers or principals to
refrain from dealing in the products of
competitors or from dealing or con-
tracting to deal with competitors.

§ 224.14
suits.

The circulation of threats of sult 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 in-
timidating such customers or prospec-
tive customers, or of unduly hamper-
ing, injuring, or prejudicing competi-
tors in their business, is an unfair
trade practice.

Unfair threats of infringement

§ 224.15 Selling below cost.

(a) The practice of selling products
of the industry at a price less than the
cost thereof to the selier, 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 prac-
tice.

(b) As used in this section the term
“cost”? means the total cost to the
selier, inciuding the costs of acquisi-
tion, processing, preparation for mar-
keting, sale, and delivery.

(c) The costs referred to in this sec-
tion are actual costs of the individual
respective selier and not some other
figure or average costs in the industry
determined by an industry cost surve
or otherwise. .

(d) This section is not to be con-
strued as prohibiting all sales below
cost, but only such sales below the
seller’s cost in mterstate commerce as
are resorted to and pursued with the
wrongful purpose or intent referred to
in the first paragraph of this section
and where the effect thereof may be

§ 224.17

to injure, destroy, or prevent competi-
tion, or tend to create a monopoly.

§ 224.16 Inducing breach of contract.

(a) Knowingly inducing or attempt-
ing to induce the breach of existing
lawful contracts between competitors
and their customers or their suppliers,
or interfering with or obstructing the
performance of any such contractual
duties or services, under any circum-
stance having the capacity and ten-
dency or effect of substantially injur-
ing or lessening present or potential
competition, is an unfair trade prac-
tice.

(b) Nothing in this section is intend-
ed to imply that it is improper for any
industry member to solicit the busi-
ness of a customer of a competing in-
dustry member; nor is the section to
be coustrued 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.

§ 224.17 Prohibited forms of trade re-
straints (uniawful price fixing, etc.) )

It is an unfair trade practice for any
member of the industry, either direct-
ly or indirectly, to engage in any
planned common course of action, or
to enter into or take part in any un-

‘The inhibitions of this section are sub-
ject to Pub. L. 542, approved July 14, 1952,
66 Stat. 632 (the McGuire Act) which pro-
vides that with respect to a commodity
which bears, or the label or container of
which bears, the trade-mark, brand, or
name of the producer or distributor of such
commodity and which is in free and open
competition with commodities of the same
general class produced or distributed by
others, a seller of such a commodity may
enter into a contract or agreement with a
buyer thereof which establishes a minimum
or stipulated price at which such commodity
may be resold by such buyer when such con-
tract or agreement is lawful as applied to in-
trastate transactions under the laws of the
State, Territory, or territorial jurisdiction in
which the resale is to be made or to which
the commodity is to be transported for such
resale, and when such contract or agree-
ment is not between manufacturers, or be-
tween wholesalers, or between brokers, or
between factors, or between retailers, or be-
tween persons, firms, or corporations in
competition with each other.

131


§ 224.18

derstanding, agreement, combination,
or conspiracy, with one or more mem-
bers 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, intimidation, or
coercion to induce any member of the
industry or other person or persons to
engage in any such planned common
course of action, or to become a party
to any such understanding, agreement,
combination, or conspiracy.

§ 224.18 Prohibited discrimination. ?

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price dis-
crimination. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce, in the course of
such commerce, to grant or allow, se-
cretly 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, ef-
fects a discrimination in price between
different purchasers of goods of like
grade and quality, where either or any
of the purchases invoived therein are
im commerce, and where the effect
thereof may be substantially to lessen
competition or tend to create a mo-
nopoly in any line of commerce, or to
injure, destroy, or prevent competition
with any person who either grants or
knowingly receives the benefit of such
discrimination, or with the customers
of either of them: Provided, however—

(1) That the goods involved in any
such transactions are sold for use, con-
sumption, or resale within any place
under the jurisdiction of the Unlted
States;

*As ased in this section, the word ‘“‘com-
merce” means “‘trade or commerce among
the several States and with foreign nations,
or between the District of Columbia or any
Territory of the United States and any
State, Territory, or foreign nation, or be-
tween any insular possessions or other
Places under the jurisdiction of the United
States, or between any such possesslon 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 jurisdic-
tion of the United States.

Title 146—Cammercial Practices

(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for
differences in the cost of manufacture,
sale, or delivery resulting from the dif-
fering methods or quantities in which
such commodities are to such purchas-
ers sold or delivered;

Nore: This proviso shall not be construed
as permitting an industry member to allow a
price differential to a customer, whether in
the form of a quantity price discount,
rebate, or other form, through billing as a
single order an aggregate of the amount of
two or more orders of such customer on
which the industry member makes separate
deliveries, when the price differential al-
lowed is not based on a net savings in cost of
manufacture, sale, and delivery of the prod-
ucts to sald customer resulting from the dif-
ferent method and quantity in which the
products are sold and delivered to sald cus-
tomer, or is more than due allowance for
such net savings; nor is this proviso to be
construed as permitting an industry
member to allow a price differential to a
customer, whether in the form of a quantity
price discount, rebate, or other form, when,
pursuant to agreement or understanding by
the industry member and the customer, de-
livery of the products purchased is to be de-
layed or made in installments so as to in-
volve storage cost to the industry member,
and when as a result of such cost or other-
wise, the price differential allowed is not
based on a net savings in cost of manufac-
ture, sale, and delivery of the products to
sald customer resulting from the different
method and quantity in which the products
are sold and delivered to sald customer, or is
more than due allowance for such net sav-

ings.

(3) That nothing contained in this
paragraph shall prevent persons en-
gaged in selling goods, wares, or mer-
chandise 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 made in re-
sponse to changing conditions affect-
ing the market for or the marketabil-
ity of the goods concerned, such as but
not limited to obsolescence of seasonal
goods, distress sales under court pro-
cess, or sales in good falth in discon-
tinuance of business in the goods con-
cerned.

(b) Prohibited brokerage and com-
missions. It is an unfair trade practice

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Chapter I—Federal Trade Commisslan

for any member of the industry en- )

gaged in commerce, in the course of
such commerce, to pay or grant, or to
receive or accept, anything of value as
a commission, brokerage, or other
compensation, or any allowance or dis-
count in lieu thereof, except for ser-
vices 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 intermediary
therein where such intermediary 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. It is an unfair
trade practice for any member of the
industry engaged in commerce to pay
or contract for the payment of adver-
tising 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 connec-
tion with the processing, handling,
sale, or offering for sale of any prod-
ucts or commodities manufactured,
soid, or offered for sale by such
member, uniess such payment or con-
sideration is avallable on proportional-
ly equal terms to all other customers
competing in the distribution of such
-products or commodities.

(ad) Prohibited discriminatory ser-
vices or facilities. It is an unfair trade
practice for any member of the indus-
try engaged in commerce to discrimi-
nate in favor of one purchaser against
another purchaser or purchasers of a
commodity bought for resale, with or
without processing, by contracting to
furnish or furnishing, or by contribut-
ing to the furnishing of, any services
or facilities connected with the pro-
cessing, handling, sale, or offering for
sale of such commodity so purchased
upon terms not accorded to all com-
peting purchasers on proportionally
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

§ 224.19

course of such commerce, knowingly
to induce or receive a discrimination in
price which is prohibited by the fore-
going provisions of this section.

(f) Exemptions. The inhibitions of
this section 18 shall not apply to pur-
chasers of their supplies for their own
use by schoois, colleges, universities,
public libraries, churches, hospitals,
and charitable institutions not operat-
ed for profit.

Note: In complaint proceedings charging
discrimination in price or services or 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; aud unless justification
shall be affirmatively shown, the Commis-
sion is authorized to issue an order termi-
nating the discrimination: Provided, howev-
er, That nothing contained in this section
shall prevent a seller rebutting the prima
facle case thus made by showing that his
lower price 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.

§ 224.19 Aiding or abetting use of unfair
trade practices.

It 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 these rules.

PART 228—TIRE ADVERTISING AND
LABELING GUIDES

Sec.

228.0 “Industry Product” and “Industry
Member” defined.

228.0-1 Use of guide principles.

228.1 Tire description.

228.2 Designations of grade, line, level, or
quality.

228.3 Deceptive designations.

228.4 Original equipment.

228.5 Comparative quallty and _ perfor-
mance claims.

228.6 Ply count, plies, ply rating.

228.7 Cord materials.

228.6 ‘“‘Change-Overs,” “New Car Take
Offs,” etc.

228.9 Retreaded and used tires.

228.10 Disclosure that products are obso-

lete or discontinued models.
228.11 Blemished, imperfect, defective,
etc., products.

133