Metallic Watch Band Industry

16 CFR Part 60 · Trade practice rules · in the Code of Federal Regulations 1966-1979 (13 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1979 CFR · Earliest edition: 1966 CFR

Text (1979 edition, OCR)

Chopter I—Federal Trade Commission

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,
sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportional-
ly equal terms to all other customers
competing in the distribution of such
products or commodities.

(d) Prohibited discriminatory serv-

. ices 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 proc-
essing, 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
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) Purchases by U.S. Government;
applicability of Robinson-Patman
Antidiscrimination Act to same. In an
opinion submitted to the Secretary of
War under date of December 28, 1936,
the U.S. Attorney General advised
that the Robinson-Patman Antidis-
crimination Act “is not applicable to

§ 60.0

Government contracts for supplies.”
(38 Opinions, Attorney General 539.)

§ 34.23 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 this part.

PART 60—METALLIC WATCH BAND
INDUSTRY

Sec.
60.0
60.1
60.2

The industry and its products defined.

Deception (general).

Deception as ti) metallic content.

60.3 Misuse of ‘corrosion proof,’ “non-cor-
rosive,” ‘‘corrosion resistant,” “rust
proof,” “rust resistant,” etc.

60.4 Deceptive as to origin or place of man-
ufacture.

60.5 Misrepresentation as to character of
business.

60.6 Deceptive pricing.

60.7 Deception as to identity of manufac-
turer or seller.

60.8 Misrepresenting products as conform-
ing to standard.

60.9 Guarantees, warranties, etc.

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

60.11 Defamation of competitors or false
disparagement of their products.

60.12 Prohibited discrimination.

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

Source: 27 FR 6205, June 30, 1962, unless
otherwise noted.

§60.0 The industry and its products de-
fined.

(a) Members of this industry are per-
sons, firms, corporations, or organiza-
tions which engage in the manufac-
ture, sale, offering for sale or distribu-
tion of industry products as the term
“industry products” is defined in the
paragraph which immediately follows.

(b) The term “industry products,” as
used in the foregoing paragraph and
in the following rules, includes any
kind of metallic wrist bands which are
designed for holding wrist watches to
the wrists of human beings and which
are not permanently attached to the
cases of such watches. When perma-
nently attached to the cases of wrist
watches, by soldering or otherwise,

339


§ 60.1

they are not subject to the rules for
this industry, and are to be regarded
as among the products which are sub-
ject to the rules promulgated by the
Commission for the Watch Case In-
dustry on January 30, 1948.

§60.1 Deception (general).

(a) It is an unfair trade practice for
any industry member to sell or offer
for sale any industry product under
any representation, circumstance, or
condition having the capacity and ten-
dency or effect of deceiving purchas-
ers or prospective purchasers in any
material respect.

(b) The prohibitions of this section
are applicable to all forms of advertis-
ing, whether in periodicals, on the
radio or television, and whether writ-
ten or oral, and to any form of mark-
ing or labeling of the products, or
their containers or display cards.
(Rule 1]

§ 60.2 Deception as to metallic content.

(a) In the sale, offering for sale, or
distribution of industry products, it is
an unfair trade practice to:

(1) Misrepresent the kind, quantity,
quality, fineness, thickness, or manner
of application, of any metal or metal
alloy contained in an industry product
or part thereof; or

(2) Fail to adequately and nondecep-
tively disclose the metallic composi-
tion of an industry product, or part
thereof, which has an exposed surface
of the appearance of gold and is not
throughout of pure (24 Kt.) gold. !

‘Such disclosure shall be in the form of a
legible and permanent marking on the prod-
uct which is so positioned, and of such con-
spicuousness, as to conform with the re-
quirements relating to quality markings
which are set forth in paragraph (g) of this
section. When the composition is wholly of
a base metal having the appearance of gold,
the marking may be either “Base Metal” or
by use of a generally understood identifica-
tion of the kind of base metal present (such
as, ‘““Anodized Aluminum”; “Brass”; etc.).
When of a base metal having a surface plat-
ing or coating of gold alloy, a marking of
“Gold Filled”, “Gold Plated”, “Gold Plate’,
“Gold Overlay”, “Rolled Gold Plated’,
“Rolled Gold Plate’, “Gold Electroplated”,
“Gold Electroplate’, “Heavy Gold Electro-
plated”, or “Heavy Gold Electroplate”, will
be considered adequate when the use of

Title 16—Commercial Practices

(3) Use of the words ‘‘gold,” “karat,”
“carat,” “silver,” ‘‘solid silver,’ ‘“‘ster-
ling,” “sterling silver,” “coin,” ‘coin
silver,” “platinum,” “iridium,” “‘palla-
dium,” “ruthenium,” “rhodium,” or
“osmium,” or any abbreviation there-
of, either alone or in conjunction with
the words “plated,” “plate,” “filled,”
“overlay,” “electroplate,’’ “electroplat-
ed” or any abbreviation § thereof,
except in accord with the require-
ments and provisions relating thereto
which are hereinafter set forth.

(b) Use of “Silver,” “Solid Silver,”
“Sterling,” “Sterling Silver,” ‘Coin,”
and “Coin Silver’: Industry products
or parts thereof shall not be marked,
described, or otherwise represented as
being “silver,” “solid silver,’’ ‘ster-
ling,” or “sterling silver,’ unless they
are throughout of silver of not less
than 925/1000ths fineness. Nor shall
they be marked, described, or other-
wise represented as being ‘“‘coin’ or
“coin silver’ unless they are through-
out of silver of not less than 900/
1000ths fineness. The terms “‘sterling”
and “coin” shell not be used as a
marking on, or as descriptive of, prod-
ucts or parts which are of base metal
on a surface or surfaces of which there
has been applied a plating or coating
of silver. When an industry product or
part is marked or described as “‘silver
plated” or “silver plate,” all significant
surfaces thereof shall have a plating
or coating of silver of a high degree of
fineness, and such plating or coating
shall be of substantial thickness. Ab-
breviations of any of the mentioned
terms are to be regarded as subject to
the same requirements. (Additional re-
quirements for use of these terms as
markings on products are set forth in
paragraph (g) of this section.)

(c) Use of “Platinum,” “Iridium,”
“Palladium,” “Rhodium,” ‘Ruthen-
ium,” and “Osmium”: These words,
and their abbreviations, shall not be
used in any manner, or under any cir-
cumstance or condition, having the ca-
pacity and tendency or effect of de-
ceiving purchasers or prospective pur-
chasers as to the true metallic compo-

such term is in full accord with the respec-
tive requirements and provisions relating
thereto which are set forth in paragraphs
(d), (e), (f), and (g), of this section.

340


Chapter l—Federal Trade Commission

sition of an industry product or part
thereof.

Note: Commercial Standard, CS66-38,
issued by the National Bureau of Standards
of the U.S. Department of Commerce,
covers the marking of articles made wholly
or in part of platinum, and markings on in-
dustry products which are in compliance
with applicable provisions of said CS66-38,
and the additional requirements of para-
graph (g) of this section, will be considered
as proper.

(d) Use of “Gold,” “Karat,” “Carat,”
“Gold Filled,” “Gold Plated,” “Gold
Plate,” “Gold Overlay,” “Rolled Gold
Plated,” “Rolled Gold Plate,” ‘Gold
Electroplated,’ “Gold Electroplate,”
“Heavy Gold Electroplated,’ and
“Heavy Gold Electroplate’: Industry
members shall not use any of these
words or terms, or any abbreviations
thereof, under any circumstances or
condition, or in any manner, which
has the capacity and tendency or
effect of deceiving purchasers or pros-
pective purchasers as to presence of
gold or gold alloy in any industry
product or part thereof, or as to the
extent or fineness of gold or gold alloy
in any industry product or part there-
of, and shall regard, as among the
practices prohibited, the following:

(1) Use of the unqualified word
“Gold,” or any abbreviation thereof,
as descriptive of any industry product,
or part thereof, which is not composed
throughout of fine (24 karat) gold.

(2) Use of the word “Gold,” or any
abbreviation thereof, as descriptive of
any industry product, or part thereof,
which is composed throughout of an
alloy of gold, unless a correct designa-
tion of the Karat fineness of the alloy
immediately precedes the word
“Gold,” or abbreviation thereof, and
such fineness designation is of at least
equal conspicuousness therewith.

(3) Use of the word “Gold,” or any
abbreviation thereof, as descriptive of
any industry product, or part thereof,
which is not composed throughout of
gold or gold alloy, but is surface-plated
or coated with gold alloy, unless the
word “Gold,” or abbreviation thereof,
is so qualified as adequately and non-
deceptively to disclose that the prod-
uct or part is but surface-plated or
coated with an alloy of gold; and,
when such plating has been mechani-

§ 60.2

cally applied, unless such word
“Gold,” or abbreviation thereof, is im-
mediately preceded by a correct desig-
nation of the karat fineness of the
alloy and such fineness designation is
of at least equal conspicuousness
therewith.

Note: See acceptable forms of markings
and descriptions for such products set out in
paragraph (e)(2) of this section.

(4) Use of the terms “Gold Filled,”
“Rolled Gold Plate,” ‘Rolled Gold
Plated,’ “Gold Overlay,” “Gold
Plated,” or “Gold Plate,” as descrip-
tive of an industry product or part
thereof, unless such product or part
contains a surface plating of gold alloy
applied by a mechanical process which
is of such thickness and extent of sur-
face coverage that use of the term as
descriptive of the product or part will
not have the capacity and tendency of
deceiving purchasers or prospective
purchasers, and unless the term is im-
mediately preceded by a correct desig-
nation of the karat fineness of the
alloy and such designation is of at
least equal conspicuousness as the
term used.

Note: See acceptable forms of markings
and descriptions for such products set out in
paragraph (e)(2) of this section.

(5) Use of the term “Gold Electro-
plate,” or ‘‘Gold Electroplated,” as de-
scriptive of any industry product or
part thereof, unless such product or
part is plated or coated with gold or a
gold alloy and such plating or coating
is of such karat fineness, thickness,
and extent of surface coverage that
the use of the term will not have the
capacity and tendency of deceiving
purchasers or prospective purchasers.

Note: See acceptable forms of markings
and descriptions for such products set out in
paragraph (e)(3) of this section.

(6) Representing, directly or by im-
Plication, by use of any name, termi-
nology, or otherwise, that an industry
product is equal or superior to, or dif-
ferent than, a known and established
type of industry product with refer-
ence to its gold content or method of
manufacture, unless the representa-
tion is true in fact (namely, that it is
equal or superior to or different than

341


§ 60.2

the established type in the respects
represented or implied).

Nore: Requirements for use of the word
“Gold,” or any abbreviation thereof, as
above set forth, are applicable to “Dura-
gold,” “Diragold,” ‘‘Noblegold,” ‘“Goldine,”
or any words or terms of similar import.

Note: See also paragraph (g) of this sec-
tion entitled “Additional Requirements Re-
lating to Markings.”

(e) Markings and descriptions of in-
dustry products or parts thereof will
be considered as proper when meeting
applicable requirements of paragraph
(g) of this section and in conformity
with the following:

(1) An industry product or part
thereof composed throughout of an
alloy of gold of not less than 10 karat
fineness may be marked and described
as “Gold” when such word “Gold,”
wherever appearing, is immediately
preceded by a correct designation of
the karat fineness of the alloy and
such karat designation is of equal con-
spicuousness as the word “Gold” (as,
for example, ‘14 Karat Gold’; “14 K.
Gold”; and “14 Kt. Gold’). Such a
product may also be marked and de-
scribed by a designation of the karat
fineness of the gold alloy unaccompan-
ied by the word “Gold” (as, for exam-
ple, “14 Karat,” “14 Kt.,” and “14

Nore: When the term ‘“‘Gold,” or any ab-
breviation thereof, is used as descriptive of
any product or part of a product which is
composed throughout of gold alloy but con-
tains a concealed hollow center or interior,
the term or its abbreviation shail also be im-
mediately accompanied by a disclosure of
the fact that the product or part contains a
hollow center or interior (as, for example,
“14 Karat Gold-Hollow Center” and “14 K.
Gold Tubing,” when of a gold alloy tubing
of such a karat fineness), when the failure
to make such disclosure has the capacity
and tendency or effect of deceiving purchas-
ers or prospective purchasers. Such prod-
ucts must not be marked or described as
“solid” or as being solidly of gold or of a
gold alloy. For example, though the compo-
sition of such product is 14 karat gold alloy,
it shall not be described or marked as either
“14 Kt. Solid Gold” or as “Solid 14 Kt.
Gold.”

(2) An industry product or part
thereof on which there has been af-
fixed on all significant surfaces, by sol-
dering, brazing, welding, or other me-

Title 16—Commercial Practices

chanical means, a plating of gold alloy
of not less than 10 karat fineness
which is of substantial thickness? may
be marked or described as “Gold
Filled,” “Gold Plate,” “Gold Plated,”
“Gold Overlay,” ‘Rolled Gold Plate,”
or adequate abbreviations thereof,
when such plating constitutes at least
Yoth of the weight of the metal in the
entire article, and when the term is
immediately preceded by a designation
of the karat fineness of the plating
which is of equal conspicuousness as
the term used (as, for example, “14
Kt. Gold Filled,” “14 Kt. G.F.,” “14
Kt. Gold Plated,” “14 Kt. G.P.,”” and
“14 Kt. Gold Overlay”). When con-
forming to all such requirements
except the specified minimum of Y¥oth
of the weight of the metal in the
entire article, the terms “Gold Plate,”
“Gold Plated,” ‘Rolled Gold Plate,”
and “Gold Overlay” may be used when
the karat fineness designation is im-
mediately preceded by a fraction
which accurately discloses the portion
of the weight of the metal in the
entire article accounted for by the
plating, and when such fraction is of
equal conspicuousness as the term
used (as, for example, “%o 12 Kt.
Rolled Gold Plate,” and ““%o 12 Kt.
R.G.P.”).

Examples of Proper Markings for Expan-
sion Bands of Specified Composition and
Construction. A substantial portion of me-
tallic watch bands are of the expansion type
and consist of a skeleton (containing links,
springs, rivets, and other smal] parts) of a
base metal; top caps and end pieces which
are of a base metal and to the exterior sur-
faces of which there have been affixed, by a
mechanical process, platings of yellow gold
alloy of 10 karat fineness; and bottom Caps
which are of stainless steel and which do
not have the appearance of yellow gold.

When such platings of the top caps and
end pieces are of substantially thickness and

2As here used, the term ‘substantial
thickness” is to be construed as requiring
that all areas of the plating be of such
thickness as to assure of a durable coverage
of the base metal to which it has been af-
fixed. Since industry products embrace
items having surfaces and parts of surfaces
which are subject to different degrees of
wear, this requirement of substantial thick-
ness may not necessitate uniformity of
thickness of plating for all items or for dif-
ferent areas of the surface or surfaces of in-
dividual items.

342


Chapter I—Federal Trade Commission

account for not less than oth of the total
weight of the base metal and gold alloy in
each such cap and end piece, a proper mark-
ing on the band would be—

“10 Karat Gold Filled Top Caps and End
Pieces. Stainless Steel Bottom Caps.”

or
“10 K. G. F. Top Caps and End Pieces.”

or
“10 K. G. F. Top Caps.”

and when such platings of the top caps and
end pieces are of substantial thickness and
account for Yoth of the total weight of the
base metal and gold alloy in each such top
cap and end piece, a proper marking on the
band would be—

“Yo 10 Karat Rolled Gold Plate Top Caps
and End Pieces. Stainless Steel Bottom
Caps.”

or

“Wo 10 K. R. G. P. Top Caps and End
Pieces.”

or
“Yo 10 K. R. G. P. Top Caps.”;

Provided, however, That the size and place-
ment of any such markings shall conform to
the requirements of paragraph (g) of this
section.

Note: When the plated top caps are af-
fixed, by swedging or otherwise, to a base
metal reinforcement lining, the weight of
such lining shall be included in the weight
used for determining the weight ratio and
proper term to be used.

(3) An industry product or part
thereof, all significant surfaces on
which there has been affixed by an
electrolytic process a coating or plat-
ing of gold, or of a gold alloy of not
less than 10 karat fineness, the mini-
mum thickness throughout of which is
equivalent to 7/1,000,000th of an inch
of fine gold, may be marked or de-
scribed as “Gold Electroplate’’ or
“Gold Electroplated.’”’ When the coat-
ing or plating meets the minimum fin-
eness, but not the minimum thickness,
above specified, the marking or de-
scription may be “Gold Flashed” or
“Gold Washed,” and when of the
minimum fineness above specified and
of a minimum thickness throughout
which is equivalent to 100/1,000,000th
of an inch of fine gold, the marking or
description may be “Heavy Gold Elec-
troplate” or ‘‘Heavy Gold Electroplat-

§ 60.2

ed.” When coatings or platings qualify
for the term “Gold Electroplate” (or
“Gold Electroplated”), or the term
“Heavy Gold Electroplate” (or ‘“Heavy
Gold Electroplated”), and have been
applied by use of a special kind of elec-
trolytic process, the designation for
which the coating or plating is quali-
fied may be accompanied by an identi-
fication of the process used, as for ex-
ample, “Gold Electroplated (X Proc-
ess)”; “Heavy Gold Electroplated (Y
Process).”

(f) Tolerances and exemptions: The
requirements of this section relating
to markings and descriptions of indus-
try products and parts thereof are sub-
ject to the tolerances applicable there-
to under the National Stamping Act
(15 U.S. Code, sections 294, et seq.).
Such requirements are also subject to
exemptions applicable thereto under
section 10(a) of Commercial Standard
CS 67-38, relating to articles made of
karat gold, and under section 12(a) of
Commercial Standard CS 47-34, relat-
ing to articles having mechanically-ap-
plied surface platings of gold alloy;
and also to the exemptions applicable
thereto enumerated in section 8 of
Commercial Standard CS 118-44 (re-
lating to marking of Jewelry and Nov-
elties of Silver) and section 8a) of
Commercial Standard CS 51-35 (relat-
ing to marking of articles made of
silver in combination with gold).

(g) Additional requirements relating
to markings. As used in this para-
graph, the term ‘quality marking”
means any marking on an industry
product which indicates or suggests
that the product contains precious
metal or an alloy thereof. Included are
the words “gold”, ‘karat’, “carat”,
“duragold”, ‘“diragold”’, ‘noblegold’’,
“goldine”, “silver”, “sterling’’, ‘coin’,
“coin silver’, “platinum”, “irridium’”’,
“palladium”, “ruthenium”, “rhodium’’,
and “osmium”, and any abbreviation
of any such word, whether used alone
or in conjunction with such terms as
“filled”, “plated”, “overlay”, ‘“electro-
plated”, or any abbreviation thereof.

(1) Markings to be legible, conspicu-
ous, and of adequate permanency.
Quality markings on industry products
shall be legible and of such degree of
permanency as to remain on the prod-

343

40-035 O—79—— 23


§ 60.3

ucts until consummation of consumer
sale thereof. They shall also be of
such size and conspicuousness as to
likely be observed and read by pur-
chasers and prospective purchasers
making casual inspection of the prod-
ucts; provided, however, that when
markings of such size and conspicuous-
ness would seriously impair the ap-
pearance of the product, they may be
of less size and conspicuousness if also
appearing on a tag or label attached or
affixed to the product in such a
manner as to remain thereon until
consummation of consumer purchase
and of such size and conspicuousness
as to be likely observed and read by
purchasers and prospective purchas-
ers. When the marking on or attached
to the product is concealed or ob-
scured because of the manner in
which the product is packaged, or
mounted in a container or on a display
card, and is offered for consumersale
in such form with consequence of
likely deception of purchasers or pros-
pective purchasers as to the true me-
tallic composition of the product, the
marking shall also appear on the out-
side of the packaging, or on the con-
tainer or display card on which the
product is mounted, in such a position
as to be clearly applicable to the prod-
uct and in such size and conspicuous-
ness as to be likely observed and read
by purchasers and prospective pur-
chasers.

(2) Deception by reason of difference
in size of letters or words in the mark-
ings. Words and letters in quality
markings shall not appear in larger
type than other words and letters in
such markings when such size differ-
ence has the capacity and tendency or
effect of deceiving purchasers or pros-
pective purchasers as to the true me-
tallic content of the product. (An ex-
ample of such improper marking is
where the product is marked as gold
electroplate with the word ‘‘“GOLD” in
large type and the word “electroplate”
in small type.)

(3) When exposed parts are of simi-
lar appearance but of different compo-
sition. When watch bands contain two
or more parts having exposed surfaces
of the same composition appearance
but which in fact are of different com-

Title 146—Commercial Practices

position, any marking as to the compo-
sition of one of such parts shall be ac-
companied by a disclcsure of the com-
position of the other parts or parts.
Thus, when a band has top caps and
end pieces of 14 karat yellow gold and
bottom caps of yellow gold electro-
plate, a proper marking would be ‘14
K. Gold Top Caps and End Pieces.
Gold Electroplated Bottom Caps”; and
when the top caps and end pieces are
14 karat white gold, and the bottom
caps are of stainless steel which has
the appearance of white gold, a proper
marking would be “14 K. White Gold
Top Caps and End Pieces. Stainless
Steel Bottom Caps” [Rule 2]

§60.3 Misuse of “corrosion proof,” “non-
corrosive,” “corrosion resistant,” “rust
proof,” “rust resistant,” ete.

(a) In the sale, offering for sale, or
distribution of industry products, it is
an unfair trade practice:

(1) To use the terms “corrosion
proof,” “non-corrosive,” “rust proof,”
or any word or term of equivalent
import, as descriptive of an industry
product, unless all parts thereof will
be immune from rust and other forms
of corrosion during the life expectancy
of the product; or

(2) To use the terms “corrosion resis-
tant,” “rust resistant,”’ or any word or
term of equivalent import, as descrip-
tive of an industry product unless all
parts of the product are of such com-
position as to not be subject to materi-
al damage by corrosion or rust during
the major portion of the life expectan-
cy of the product under normal condi-
tions of use.

(b) Among the metals which may be
considered as corrosion (and rust) re-
sistant are:

Pure Nickel.

Gold Alloys of not less than 10 Kt. fine-
ness.

Austenitic stainless steels.

(Rule 3]
§ 60.4 Deception as to origin or place of
manufacture.

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

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Chapter I—Federal Trade Commission

(a) To misrepresent the origin or
place of manufacture of an industry
product or any part thereof; or

(b) Subject to the exemptions here-
inafter specified, to fail to adequately
disclose to purchasers and prospective
purchasers that an industry product,
or substantial part thereof? is of for-
eign origin, or has been manufactured,
processed, or assembled in a foreign
country.

Note: The disclosure required by para-
graph (b) of this section shall be in the form
of a legible marking or stamping on the in-
dustry product, or on a label or tag affixed
thereto, which is of such degree of perma-
nency as to remain on or attached to the
product, in legible form, until consumma-
tion of the consumer sale thereof, and of
such conspicuousness as to be likely ob-
served and read by purchasers and prospec-
tive purchasers making casual inspection of
the product; and if such industry product is
packaged, or mounted in a container, or on
a display card, and is offered for consumer
sale in such form, then the marking or
stamping shall also appear on the front or
face of such packaging, container, or display
card, and be so positioned as to clearly have
application to the product so packaged or
mounted, and shall also be of such degree of
permanency as to remain thereon until con-
summation of consumer sale of the product,
and of such conspicuousness as to be likely
observed and read by purchasers and pros-
pective purchasers making casual inspection
of the product as so packaged or mounted.
The disclosure shall name the foreign coun-
try of origin or manufacture, and when not
applicable to the entire product shall speci-
fy the part or parts to which it has applica-
bility.

[Note amended, 27 FR 6384, July 6, 1962)

Exemptions. To be regarded as exempt
from the disclosure requirements of para-
graph (b) of this section are:

Sheet, strip, wire, tubing, and similar basic
material when imported in that form:

Parts of industry products which after
their importation are subjected to process-
ing or manufacturing in this country, or are
merged with another or other parts of do-
mestic manufacture, and as a consequence
of such processing, manufacturing, or

Parts which are to be considered as sub-
stantial include the skeletons or interliners
of the expansion type bands, whether of the
entire length of the band or but a substan-
tial portion of such length, and whether
caps and end pieces are affixed thereto
before or after the importation of such skel-
etons or interliners.

§ 60.6

merger, no longer retain the appearance
and essential characteristics possessed by
them at the time of their importation.

Nore: The affixing in this country of do-
mestically manufactured caps and end
pieces to imported skeletons of expansion
type bands is not to be regarded as so
changing the appearance and essential char-
acteristics of such skeletons as to exempt
them from the disclosure requirements of
paragraph (b) of this section.

Rivets, springs, screws, bolts, washers, and
similar small parts which are imported in an
unassembled state;

Natural stones and cultured pearls which
are used as decorative settings of industry
products.

Nore: Nothing in this section is to be con-
strued as relieving any industry member
from compliance with the requirements of
custom laws of the U.S. having application
to industry products and parts imported
from a foreign country.

[Rule 4]

§ 60.5 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 sale of industry
products, to represent, directly or indi-
rectly, that he is a manufacturer of in-
dustry products, unless he owns and
operates or directly controls a factory
wherein such products are made, or in
any other manner to misrepresent the
character, extent, or type of his busi-
ness. [Rule 5]

$60.6 Deceptive pricing.

It is an unfair trade practice for any
member of the industry to represent
directly or indirectly in advertising or
otherwise that an industry product
may be purchased for a specified price,
or at a saving, or at a reduced price,
when such is not the fact; or otherwise
deceive purchasers or prospective pur-
chasers with respect to the price of
any product offered for sale; or fur-
nish any means or instrumentality by
which others engaged in the sale of in-
dustry products may make any such
representation.

Note: On December 20, 1963, the Commis-
sion adopted Guides Against Deceptive. Pric-
ing which became effective on January 8,
1964, and which supersede the Guides on
this subject as adopted October 2, 1958.

345


§ 60.7

Copies of the Guides will be furnished upon
request.

[Rule 6]
[29 FR 7670, June 16, 1964)

§ 60.7 Deception as to identity of manu-
facturer or seller.

In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any member
of the industry to use any corporate
name, trade name, trade-mark, slogan
or other means of identification,
which, by reason of its similarity with
the corporate name, trade name,
trade-mark, slogan, or other means of
identification used by another party,
which has the capacity and tendency
or effect of deceiving purchasers or
prospective purchasers as to the iden-
tity of the manufacturer or vendor of
any industry product which is sold or
offered for sale by the industry
member. [Rule 7]

§ 60.8 Misrepresenting products as con-
forming to standard.

It is an unfair trade practice to rep-
resent, through advertising or other-
wise, that any product of the industry
conforms to any standard recognized
in or applicable to the industry when
such is not the fact. [Rule 8]

§ 60.9 Guarantees, warranties, etc.

(a) It is an unfair trade practice to
represent in advertising or otherwise
that a product is “guaranteed” with-
out clear and conspicuous disclosure
of:

(1) The nature and extent of the
guarantee, and

(2) Any material conditions or limi-
tations in the guarantee, which are im-
posed by the guarantor, and

(3) The manner in which the guar-
antor will perform thereunder, and

(4) The identity of the guarantor.

Representations that a product is
“guaranteed for life’ or has a “life-
time guarantee” in addition to meet-
ing the above requirements, shall con-
tain a conjunctive and conspicuous dis-
closure of the meaning of “life” or
“lifetime” as used (whether that of
the purchasers, the product or other-
wise).

Title 146—Commercial Practices

(b) Guarantees shall not be used
which under normal conditions are im-
practical of fulfillment or which are
for such a period of time or are other-
wise of such nature as to have the ca-
pacity and tendency of misleading pur-
chasers or prospective purchasers into
the belief that the product so guaran-
teed has a greater degree of servicea-
bility, durability or performance capa-
bility in actual use than is true in fact.

(c) This section has application not
only to “guarantees” but also to ‘“war-
ranties,” to purported “guarantees”
and ‘‘warranties,” and to any promise
or representation in the nature of a
“guarantee” or “warranty”. [Rule 9]

§ 60.10 Prohibited forms of trade re-
straints (unlawful price fixing, ete.).*

Members of the industry, either di-
rectly or indirectly, shall not engage in
any planned common course of action,
or enter into or take part in any un-
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 industry products or
otherwise unlawfully to restrain trade;
or use any form of threat, intimida-
tion, or coercion to induce any
member of the industry or other
person or persons to engage in any

‘The prohibitions of this section are sub-
ject to Pub. L. 542, approved July 14, 1952—
66 Stat. 632 (the McGuire Act commonly re-
ferred to as the “Fair Trade Amendment”)
which provides that with respect to a com-
modity which bears, or the label or contain-
er 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.

346


Chapter I—Federal Trade Commission

such planned common course of
action, or become a party to any such
understanding, agreement, combina-
tion, or conspiracy. [Rule 10]

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

Members of the industry shall not
defame competitors by falsely imput-
ing to them dishonorable conduct, in-
ability to perform contracts, question-
able credit standing, or by other false
representations, nor shall] such mem-
bers falsely disparage the products of
competitors in any respect, nor their
business methods, selling prices,
values, credit terms, policies or serv-
ices. [Rule 11]

$60.12 Prohibited discrimination.

(a) Prohibited discriminatory prices,
rebates, discounts, etc. No member of
the industry engaged in commerce, in
the course of such commerce, shall
grant or allow, secretly or openly, di-
rectly 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 dif-
ferent purchasers of goods of like
grade and quality, where either or any
of the purchasers involved therein are
in 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 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, and are not purchased by
schools, colleges, universities, public li-
braries, churches, hospitals, and chari-
table institutions not operated for
profit, as supplies for their own use;

(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

§ 60.12

such commodities are to such purchas-
ers sold or delivered;

Note: Cost justification under the above
proviso depends upon net savings in cost
based on all facts relevant to the transac-
tions under the terms of paragraph (a)(2) of
this section. For example, if a seller regular-
ly grants a discount based upon the pur-
chase of a specified quantity by a single
order for a single delivery, and this discount
is justified by cost differences, it does not
follow that the same discount can be cost
justified if granted to a purchaser of the
same quantity by multiple orders or for
multiple deliveries.

(3) That nothing contained in this
section shall prevent persons engaged
in selling goods, wares, or merchandise
in commerce from selecting their own
customers in bona fide transactions
and not in restraint of trade;

(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 proc-
ess, or sales in good faith in discon-
tinuance of business in the goods con-
cerned;

(5) That nothing contained in this
section shall prevent the meeting in
good faith of an equally low price of a
competitor.

Nore: Subsection (b) of section 2 of the
Clayton Act, as amended, reads as follows:
“Upon proof being made, at any hearing on
a complaint under this section, that there
has been discrimination in price or services
or facilities furnished, the burden of rebut-
ting the prima facie case thus made by
showing justification shall be upon the
person charged with a violation of this sec-
tion, and unless justification shall be affir-
matively shown, the Commission is author-
ized to issue an order terminating the dis-
crimination: Provided, however, That noth-
ing herein contained shall prevent a seller
rebutting the prima facie case thus made by
showing that his lower price or the furnish-
ing 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.”

(b) Prohibited brokerage and com-
missions. No member of the industry
engaged in commerce, in the course of

347


§ 62.0

such commerce, shall pay or grant, or
receive or accept, anything of value as
a commission, brokerage, or other
compensation or any allowance or dis-
count in lieu thereof, except for serv-
ices 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. No member of
the industry engaged in commerce
shall 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 con-
sideration for any services or facilities
furnished by or through such custom-
er in connection with the processing,
handling, sale, or offering for sale of
any products or commodities manufac-
tured, sold or offered for sale by such
member, unless such payment or con-
sideration is made known to and is
available on proportionally equal
terms to all other customers compet-
ing in the distribution of such prod-
ucts or commodities.

(d) Prohibited discriminatory serv-
ices or facilities. No member of the in-
dustry engaged in commerce shall dis-
criminate in favor of one purchaser
against another purchaser or purchas-
ers of a commodity bought for resale,
with or without processing, by con-
tracting to furnish or furnishing, or by
contributing to the furnishing of, any
services or facilities including, but not
limited to, displays, exhibits, and pro-
motional material connected with the
processing, handling, sale, or offering
for sale of such commodity so pur-
chased upon terms not made known to
and accorded to all competing pur-
chasers on proportionally equal terms.

Nore: Subsection (b) of section 2 of the
Clayton Act, as amended, which is set forth
in the note concluding paragraph (a) of this

Title 16—Commercial Practices

section, is applicable to paragraph (d) of
this section.

(e) Inducing or receiving an illegal
discrimination in price. No member of
the industry engaged in commerce, in
the course of such commerce, shall
knowingly induce or receive a discrimi-
nation in price, advertising or promo-
tional allowances, or services or facili-
ties, which is prohibited by the forego-
ing provisions of this section. (Rule
12)

PART 62—REBUILT, RECONDITIONED
AND OTHER USED AUTOMOTIVE
PARTS INDUSTRY

Sec.

62.0 Definitions.

62.1 Deception as to previous use of prod-
ucts.

62.2 Deception as to identity of rebuilder,
remanufacturer, reconditioner or re-
liner.

62.3 Misrepresentation as to condition of
products and misuse of the terms “re-
built,” “factory rebuilt,” ‘“remanufac-
tured,’ etc.

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

Source: 27 FR 6210, June 30, 1962, unless
otherwise noted.

§ 62.0 Definitions.

(a) Industry member. Any person,
firm, corporation or organization en-
gaged in the sale or distribution of any
industry product as defined below.

(b) Industry products. Industry
products are automotive parts and
automotive assemblies which have
been used or which contain used parts,
whether such parts or assemblies have
been rebuilt, remanufactured, recondi-
tioned, relined, or otherwise. The
terms “automotive parts” and “auto-
motive assemblies” as herein used
mean any part or assembly designed
for an automobile, truck, motorcycle,
tractor or similar self-propelled vehi-
cle. Industry products include, but are
not limited to, armatures, generators,
starters, carburetors, clutches, distrib-
utors, connecting rods, crankshafts,
cylinder blocks, engine assemblies, fuel
pumps, brakes, master and wheel
brake cylinders, power brakes, shock
absorbers, starter drives, solenoids,
automatic transmissions, regulators,

348