Fire Extingushing Appliance Industry
16 CFR Part 224 · Trade practice rules · in the Code of Federal Regulations 1975-1975 (1 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1975 CFR · Earliest edition: 1975 CFR
Text (1975 edition, OCR)
Chapter !—Federal Trade Commission
Group I
§ 223.101 Disapproval of solicitation
when benefits unlikely,
The industry condemns the practice of
soliciting or promoting the sale of any
of its products to persons who, by reason
of their physical state, age, or infirmity,
cannot be expected to obtain reasonable
use and benefit from such products.
This section shall not be regarded as
condemning the sale of an industry
product to any person furnishing a
prescription from a doctor.
§ 223.102 Cooperation with doctors.
(a) The industry fully realizes that the
interest of the orthopedically handi-
capped is best promoted by the coopera-
tion of the doctor and industry member
concerning the type and fitting of indus-
try products.
(b) The industry pledges its members
to give every assistance to doctors and
to do everything possible to promote
mutua! trust and confidence between the
industry and members of the medical
profession and the general public.
(c) It is recommended that an in-
dustry product not be sold, or any par-
ticular type recommended, without the
benefit of a prescription or consultation
with the doctor except when the patient
wishes a duplicate appliance of one
which has been prescribed by a doctor.
(d) Any major change in adjustment,
shape, or construction should be made
only on the prescription of the doctor.
§ 223.103 Importance of personal fit-
ting.
(a) The industry disapproves the
practice of undertaking to supply an
orthopedic appliance by mail-order
specification and without personal fitting
thereof.
(b) The exception to this section is
when the appliance is ordered by a doc-
tor who assumes full responsibility for
the accuracy of fit; or when duplicating
an appliance originally prescribed by a
doctor.
§ 223.104 Sharing of improved tech-
niques.
Believing that the interest of the
orthopedically 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
{ts members in respect to the making,
fitting, aligning, or servicing of industry
§ 924.0
products. Further, the industry desires
to be an active and cooperative factor in
all progressive developments of improved
techniques that will contribute to the
welfare and comfort of the orthopedi-
cally handicapped.
PART 224—FIRE EXTINGUISHING
APPLIANCE INDUSTRY
Sec.
224.0 Definitions.
Grour I
224.1 Misrepresentation and deception in
the sale of industry products.
2242 Disclosure of limitations and warn-
ing 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.
2249 Imitation of trade-marks, trade
names, etc.
224.10 Procurement of competitors’ confi-
dential information.
224.11 Enticing away employees of com-
petitors.
224.12 Defamation of competitors or false
disparagement of their produots.
224.18 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
(unlawful price fixing, etc.).
224.18 Prohibited discrimination.
224.19 Aiding or abetting use of unfair
trade practices.
AvurTHoriry: The provisions of this Part 224
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Sousce: The provisions of this Part 224 ap-
pear at 19 F.R. 8655, Dec. 17, 1954, unless
otherwise noted.
§ 224.0 Definitions.
As used in this part, the terms “indus-
try member” and “industry products”
shall have the following meanings, re-
spectively:
(a) Industry member. Any person,
firm, corporation. or organization en-
gaged in the manufacture, sale, or dis-
tribution of industry products as here-
inafter defined.
(b) Industry products. All appliances
which are manufactured expressly for,
and which are represented as being
capable of, extinguishing fires. Auto-
matic sprinkler systems and automotive
317
§ 994.1
fire apparatuses are not considered prod-
ucts of the industry.
Group 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, di-
rectly or indirectly, any false, misleading,
or deceptive statement or representation
concerning the size, grade, quality, quan-
tity, substance, origin, capacity, per-
formance, durability, safety, or prepara- .
tion of any fire extinguishing appliance,
or any other statement or representation
concerning fire extinguishing appliances,
which is false or misleading in any ma-
terial respect or which has the capacity
and tendency 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 all types
of fires when such is not the fact.
(b) Representing or implying that
any industry product incorporates ex-
ceptional or exclusive or unique features
when such is not the fact.
(c) Representing or implying that the
industry member’s fire extinguishing
apparatus is the only equipment used or
approved by the United States Army,
‘Navy, or Air Force, or any other orga-
nization, either civilian or military, when
such is not the fact.
(d) Representing or implying that an
industry product may be used with abso-
lute safety when such is not the fact.
§ 224.2 Disclosure of limitations and
warniug of hazards.
ta) 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 combustion
of a certain kind or type of substance
or substances (such as small or incipient
fires involving combustion of other than
oil or inflammable liquids), or when the
effectiveness of the product is dependent
upon periodic replacement of fluids or
other substances contained therein, or
when the maintenance, handling, or use
of the product involves, or may normally
involve, a hazard of personal injury to
the person maintaining or using sucli
product, it is an unfair trade practice
for any member of the industry to sell,
offer for sale, lease, or rent such industry
product unless adequate disclosure of
such’ limitations and adequate warning
Title 16—Commercial Practices
of such hazards has been permanently
stamped on an exposed surface of the
product, or appears as a permanent
stamping on a durable tag securely af-
fixed to the product: Provided, That such
disclosure and/or warning shall be of
such size print and of such conspicuous-
ness 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 attached thereto, the disclosure or
warning on the tag shall be accompanied
by conspicuous instructions to not re-
move 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 above
requirement, shall appear conspicuously
in all advertising and sales presentations
relating to the product.
§ 224.3 Use of the word “free.”
In connection with the sale, offering
for sale, or distribution of industry prod-
ucts, it is an unfair trade practice to
use the word “free,” or any other word
or words of similar import, in advertise-
ments or in other offers to the public,
as descriptive of an article of merchan-
dise, or service, which is not an uncon-
ditional gift, under the following
circumstances:
(a) 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
tlie 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 purchased
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.
Norz: The disclesure 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 ts
made by use of an asterisk or other symbol
placed next to the word “free,” will not be
regarded as compliance.
318
Chapter I—Federal Trade Commission
§ 224.4 False and misleading price quo-
tations, etc.
The publishing or circulating to pur-
chasers or prospective purchasers by any
member of the industry of false or mis-
leading 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 F.R. 4327, May 29, 1959)
§ 224.5 Substitution of products.
The practice of shipping or delivering
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to
representations made prior to securing
the order, without advising the pur-
chasers as to said substitution and ob-
taining their consent thereto at or before
the time of shipment or delivery, is an
unfair trade practice.
§ 224.6 Deceptive use of trade or cor-
porate names, 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 name, nature, efficacy, or origin of
any product of the industry, or any ma-
terial used therein, or which is false or
misleading in any other material respect,
is an unfair trade practice.
§ 224.7 Misrepresentation as to charac-
ter of business.
It is an unfair trade practice for any
industry meiber, in the course of or in
connection with the distribution of in-
dustry products, to represent, directly or
indirectly, that he is a producer or inanu-
facturer of industry products when such
is not the fact, or in any other manner
to misrepresent the character, extent, or
type of his business.
§ 224.8 Misrepresenting products as con-
forming to standard.
Representing, through advertisement
or otherwise, that any products of the
industry conform to a standard recog-
nized in or applicable to the industry
when such is not the fact, with the ca-
pacity and tendency or effect of mislead-
ing or deceiving the purchasing or con-
suming public, is an unfair trade prac-
tice.
§ 994.13
§ 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 capacity
and tendency or effect of misleading or
deceiving the purchasing or consuming
publ, is an unfair trade practice.
§ 224.10 Procurement of eompetitors’
confidential information.
It is an unfair trade practice for any
member of the industry to obtain infor-
mation concerning the business of a
competitor by bribery of an employee or
agent of such competitor, by false or
misleading statements or representa-
tions, by the impersonation of one in au-
thority, or by any other unfair means,
and to use the information so obtained in
such manner as to injure said coinpetitor
in his business or to suppress competi-
tion or unreasonably restrain trade.
§ 224.11 Enticing away employees of
competitors.
It is an unfair trade practice for any
member of the industry wilfully to entice
away employees or sales representatives
of competitors with the intent and effect
of thereby unduly hampering or injuring
competitors in their business and de-
stroying or substantially lessening com-
petition: Provided, That nothing in this
section shall be construed as prohibiting
einployees from seeking more favorable
employment, or as prohibiting employers
from hiring or offering employment to
employees of coinpetitors in good faith
and not for the purpose of injuring, de-
stroying, or preventing competition.
§ 224.12 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-
parageinent of competitors’ products in
any respect, or of their business methods,
selling prices, values, credit terms, poli-
cies, or services, is an unfair trade
practice.
§ 224.13 Commercial bribery.
It is an unfair trade practice for a
member of the industry, directly or indi-
rectly, to give, or offer to give, or permit
or cause to be given, money or anything
of value to agents, employees, or repre-
319
§ 994.14
sentatives of customers or prospective
customers, or to agents, employees, or
representatives of competitors’ customers
or prospective customers, without the
knowledge of their employers or prin-
cipals, 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 principals
to refrain from dealing in the products
of competitors or from dealing or con-
tracting to deal with competitors.
§ 224.14 Unfair threats of infringement
suits.
The circulation of threats of suit for
infringement of patents or trade-marks
among customers or prospective cus-
tomers 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 of unduly hampering, in-
juring, or prejudicing competitors in
their business, is an unfair trade practice.
§ 224.15 Selling below eost.
(a) The practice of selling products
of the industry at a price less than the
cost thereof to the seller, with the pur-
pose or intent, and where the effect may
be, to injure, suppress, or stifle com-
petition or tend to create a monopoly in
the production or sale of such products,
is an unfair trade practice.
(b) As used in this section the term
“cost” means the total cost to the seller,
including the costs of acquisition, proc-
essing, preparation for marketing, sale,
and delivery.
(c) The costs referred to in this sec-
tion are actual costs of the individual
respective seller and not some other fig-
ure or average costs in the industry de-
termined by an industry cost survey or
otherwise.
(d) This section is not to be construed
as prohibiting all sales below cost, but
only such sales below the seller’s cost in
interstate commerce as are resorted to
and pursued with the wrongful purpose
or intent referred to in the first para-
graph of this section and where the
effect thereof may be to injure, destroy,
or prevent competition, or tend to create
@ monopoly.
§ 224.16 Indueing breach of contract.
(a) Knowingly inducing or attempt-
ing to induce the breach of existing law-
Title 16—Commercial Practices
ful contracts between competitors and
their customers or their suppliers, or in-
terfermg with or obstructing the per-
formance of any such contractual duties
or services, under any circumstance hav-
ing the capacity and tendency or effect
of substantially injuring or lessening
present or potential competition, is an
unfair trade practice.
(b) Nothing in thls section is intended
to imply that it is improper for any in-
dustry member to solicit the business of
a 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.
§ 224.17 Prohibited forms of trade re-
straints (unlawful price fixing, ete.)’
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 understanding,
agreement, combination, or conspiracy,
with one or more members of the in-
dustry, or with any other person or per-
sons, 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 in-
duce any meinber of the industry or
other person or persons to engage in any
1The inhibitions of this section are sub-
ject to Public Law 542, approved July 14,
1952, 66 Stat. 632 (the McGuire Act) which
provides 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 com-
modity and which is in free and open com-
petition 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
puyer thereof which establishes a minimum
or stipulated price at which such commod-
ity may be resold by such buyer when such
contract or agreement ts lawful as applied
to intrastate transactions under the iaws
of the State, Territory, or territorial juris-
diction in which the resale is to be made
or to which the commodity is to be trans-
ported for such resale, and when such con-
tract or agreement ts not between manufac-
turers, or between wholesalers, or between
prokers, or between factors, or between re-
tailers, or between persons, firms, or corpo-
rations in competition with each other.
820
Chapter [—Federal
such planned common course of action,
or to become a party to any such under-
standing, agreement, combination, or
conspiracy.
§ 224.18 Prohihited discrimination.’
(a) Prohibited 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 en-
gaged 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 discrimi-
nation in price between different pur-
chasers of goods of like grade and qual-
ity, where either or any of the purchases
involved therein are in commerce, and
where the effect thereof may be sub-
stantially to lessen competition or tend
to create a 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 the cus-
tomers 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
methods or quantities in which such
commodities are to such purchasers 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
7As used 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 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
piece under the jurisdiction of the United
tates.
Trade Commission § 294.18
the form of a quantity price discount, re-
bate, or other form, through billing ag 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 allowed
is not based on a net savings in cost of
manufacture, sale, and delivery of the prod-
ucts to said customer resulting from the
different method and quantity in which the
products are sold and delivered to said 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 dis-
count, rebate, or other form, when, pursuant
to agreement or understanding by the in-
dustry member and the customer, delivery of
the products purchased is to be delayed or
made in installments so as to involve storage
cost to the industry member, and when as a
result of such cost or otherwise, the price dif-
ferential allowed is not based on a net
savings in cost of manufacture, sale, and de-
Hvery of the products to said customer re-
sulting from the different method and quan-
tity in which the products are sold and
delivered to said customer, or is more than
due ailowance for such net savings.
(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 made in re-
sponse to changing conditions affecting
the market 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 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 in-
termediary therein where such inter-
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.
321
§ 994.19
(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 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 facili-
ties furnished by or through such cus-
tomer in connection with the processing,
handling, sale, or offering for sale of any
products or commodities manufactured,
sold, or offered for sale by such member,
unless such payment or consideration is
available on proportionally equal terms
to all other customers competing in the
distribution of such products or com-
modities.
(a) Prohibited discriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce to discriminate in
favor of one purchaser against another
purchaser or purchasers of a commodity
bought for resale, with or without proc-
essing, by contracting to furnish or fur-
nishing, or by contributing to the
furnishing of, any services or facilities
connected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not
accorded to all competing 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
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-
chases of their supplies for their own
use by schools, colleges, universities, pub-
lic libraries, churches, hospitals, and
charitable institutions not operated for
profit.
Nore: 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 shail be upon the
person charged; and unless justification shall
be affirmatively shown, the Commission 1s
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 his 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
& competitor, or the services or facillties
furnished by a competitor. See Sec. 2~-b,
Clayton Act.
§ 224.19 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 these rules.
PART 225-—-TOBACCO SMOKING
PIPE, AND CIGAR AND CIGARETTE
HOLDER INDUSTRY
Sec.
225.0 Definitions,
Group I
225.1 Misrepresentation and deception in
genera).
225.2 Misleading illustrations.
225.3 Deceptive use of imitation of trade
or corporate names, trade-marks,
etc.
225.4 Deception as to origin.
225.5 Misrepresentation as to character
of business.
225.6 Misuse of terms “close-outs,” “‘dis-
continued lines,” “spectal bar-
gains,” etc.
225.7 Fictitious prices, price lists, etc.
225.8 False invoicing.
225.9 Consignment distribution.
225.10 Guarantees, warranties, etc.
225.11 Use of lottery schemes.
225.12 Defamation of competitors or false
disparagement of their products.
225.13 Unfair threats of infringement
suits.
225.14 Commercial bribery.
225.15 Prohibited forms of trade restraints
(unlawful price fixing, etc.)
225.18 Prohibited discrimination.
225.17 Aiding or abetting use of unfair
trade practices. \
Group II
225.101 Recording of trade-marks, trade
names, etc., to avoid confusion.
225.102 Manufacturer’s name, insignia, etc.,
on ail products,
CoMMITTEE ON TRADE PRACTICES
225.201 Industry committee.
AvutTHorrry: The provisions of this Part 225
issued under secs. 6, 5. 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Source: The provisions of this Part 225
appear at 20 F.R. 332, Jan. 14, 1955, unless
otherwise noted.
322