able credit standing, or by other false representations; or

(b) To falsely disparage a competitor's products, business methods, selling prices, values, credit terms, policies, or services.

§ 219.10 Commercial bribery.

It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase or contract to purchase products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors.

§ 219.11 Procurement of competitors' confidential information.

It is an unfair trade practice for any member of the industry to obtain information concerning the business of a competitor by bribery of an employee or agent of such competitor, by false or misleading statements or representations, 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.

§ 219.12 Prohibited forms of trade restraints (unlawful price fixing, etc.).' It is an unfair trade practice for any member of the industry, either directly

2 The inhibitions of this section are subject 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 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 re

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 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.

§ 219.13 Enticing away employees of competitors.

It is an unfair trade practice for any member of the industry willfully 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 destroying or substantially lessening competition: Provided, That nothing in this section shall be construed as prohibiting employees from seeking more favorable employment, or as prohibiting employers from hiring or offering employment to employees of competitors in good faith and not solely for the purpose of inflicting injury on a competitor.

§ 219.14 Deception in marking of industry products.

It is an unfair trade practice to make or publish, or cause to be made or published, in trade promotional literature, in advertising, in the form of a label or marking on an industry product, or otherwise, any statement or representation which directly, or by reason of concealment of material fact, has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers concerning the grade, quality, use, size, composition and finish, strength, thickness, origin, preparation, manufacture, or distribution of sold by such buyer when such contract or agreement is lawful as applied to intrastate 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 agreement is not between manufacturers, or between wholesalers, or between brokers, or between factors, or between retailers, or between persons, firms, or corporations in competition with each other.

any product of the industry, or which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers in any other material respect.

§ 219.15 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, directly or indirectly, that he is a manufacturer of industry products, or that he owns or controls a factory making such products, when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business.

§ 219.16 Misrepresenting products as conforming to standard.

Representing, through advertising, personal solicitation, or otherwise, that any product of the industry conforms to a standard recognized in or applicable to the industry when such is not the fact, is an unfair trade practice.

§ 219.17 Aiding or abetting use of unfair trade practices.

It is an unfair trade practice for any person, firm, or corporation to aid, abet, coerce, or induce another, directly or indirectly, to use or promote the use of any unfair trade practice specified in the foregoing sections in this part.

COMMITTEE ON TRADE PRACTICES

§ 219.201 Industry committee.

The provisions of § 16.1 of this subchapter shall be applicable to an industry committee established under this part.

[21 F.R. 1174, Feb. 21, 1956]

§ 220.1 Deception (general).

It is an unfair trade practice for any industry member to use, or cause or promote the use of, any advertising matter, guarantee, warranty, trade promotional literature, mark, brand, label, or other representation, however disseminated or published, which has the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public with respect to the grade, quality, conformity to a trade standard, material, composition, construction, fabrication, manufacture, distribution, origin, or price or terms of sale, of library binding, or which is false, misleading, or deceptive in any other material respect.

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

(a) Misrepresentation as to character of business. It is an unfair trade practice for any member of the industry to represent, directly or indirectly, through the use of any word or term in his corporate or trade name, in his advertising or otherwise, that he is a library binder,

or that he is the owner or operator of a library bindery, when such is not the fact, or in any other manner to misrepresent the character, extent, volume, or type of his business.

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

(1) When all the conditions, obligations, or other prerequisites to the receipt and retention of the "free" article of merchandise or service offered are not clearly and conspicuously set forth at the outset so as to leave no reasonable probability that the terms of the offer will be misunderstood; and, regardless of such disclosure:

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

NOTE: The disclosure required by subsection b (1) of this section shall appear in close conjunction with the word "free" (or other word or words of similar import) wherever such word first appears in each 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.

(c) Misbranding of library binding. The false or deceptive marking, branding, or labeling of any library binding with respect to the grade, quality, use, effect, purpose, material, conformity to a trade standard, origin, preparation, manufacture, or distribution of such library binding, or concerning any component thereof, or in any other material respect, is an unfair trade practice. § 220.2 Guarantees and warranties.

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

(b) Within the inhibitions of this section is the use of the following types of guarantees:

(1) Guarantees containing statements, representations, or assertions which have the capacity and tendency or effect of misleading and deceiving in any material respect; or

(2) Guarantees which are of such form, text, or character as to import, imply, or represent that the guarantee is broader than is in fact true, or will afford more protection and service to purchasers or users than is in fact true;

or

(3) Guarantees in which any condition, qualification, or contingency applied by the guarantor thereto is not fully and nondeceptively stated therein, or is stated in such manner or form as to be deceptively minimized, obscured, or concealed, wholly or in part; or

(4) Guarantees which are stated, phrased, or set forth in such manner that although the statements contained therein are literally and technically true, the whole is misleading in that purchasers or users are not made sufficiently aware of certain contingencies or conditions applicable to such guarantees which materially lessen the value or protection thereof as guarantees to purchasers or users; or

(5) Guarantees which have the capacity and tendency or effect of otherwise misrepresenting the performance, serviceability, durability, or lasting qualities of library binding, such as, for example, a guarantee extending for a certain number of years or other long period of time when the ability of the library binding to last, endure, or remain serviceable for such period of time has not been established by actual experience or by competent and adequate tests definitely showing in either case that the library binding has such lasting qualities under the conditions encountered or to be encountered in the respective locality where the library binding is sold and used under the guarantee; or

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

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

(c) This section shall be applicable not only to guarantees, but also to warranties, to purported warranties and guarantees, and to any promise or representation in the nature of or purporting to be a guarantee or warranty.

§ 220.3 Other deception.

(a) Deceptive use and imitation of trade or corporate names, trade-marks, etc. It is an unfair trade practice for any member of the industry

(1) To imitate, or cause to be imitated, or directly or indirectly promote the imitation of, the trade-marks, trade names, or other exclusively owned symbols or marks of identification of competitors in a manner having the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the buying public; or

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

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

The

(c) Substitution of products. practice of shipping or delivering library binding which does not conform to specifications upon which the sale is consummated, or to representations made prior to securing the order, without the consent of the purchasers to such substitution, and with the capacity and tendency or effect of misleading or deceiving purchasers, is an unfair trade practice.

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

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

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

(a) To falsely represent or imply that any such library binding conforms to the requirements of any standard or specification, whether established or recogmized by a department or unit of a city

or State government, or of the Federal Government, by trade practice, or otherwise.

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

(c) For any member of the industry to claim or imply that the library binding conforms to any standard or specification which is inapplicable or which has been rescinded, revised, superseded, or amended, and thereby mislead or deceive purchasers or prospective purchasers.

§ 220.5 Fictitious prices, price lists, etc.

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

§ 220.6 Selling below cost.

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

their library binding, or of their business methods, selling prices, values, credit terms, policies, services, or conditions of employment, is an unfair trade practice.

§ 220.8 Enticing away employees of competitors.

Knowingly enticing away employees or sales representatives of competitors under any circumstance having the capacity and tendency or effect of substantially injuring or lessening present or potential competition is an unfair trade practice:

Provided, That nothing

in this section shall be construed as prohibiting employees from seeking more favorable employment, or as prohibiting employers from hiring or offering employment to employees of competitors in good faith and not for the purpose of injuring, destroying, or preventing competition.

§ 220.9 Commercial bribery.

It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase or contract to purchase products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors. § 220.10 Procurement of competitors' confidential information.

It is an unfair trade practice for any member of the industry to obtain information concerning the business of a competitor by bribery of an employee or agent of such competitor, by false or misleading statements or representations, by the impersonation of one in authority, or by any other unfair means, and to use the information so obtained so as substantially to injure competition or unreasonably restrain trade.

§ 220.11 Unlawful interference with competitors' purchases or sales.

It is an unfair trade practice for any industry member, by means of any mo

nopolistic practices, or through combination, conspiracy, coercion, boycott, threats, or any other unlawful means, directly or indirectly, to interfere with a competitor's right to purchase his raw materials and supplies from whomsoever he chooses, or to sell his product to whomsoever he chooses.

§ 220.12

Arrangements to exclude sale of competitors' products.

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

§ 220.13 Tie-in sales; coercing purchase of one product as a prerequisite to the purchase of other products. The practice of coercing the purchase of one or more types of library binding as a prerequisite to the purchase of one or more other types of library binding, where the effect may be substantially to lessen competition or tend to create a monopoly or unreasonably to restrain trade, is an unfair trade practice.

§ 220.14 Unfair threats of infringement suits.

The circulation of threats of suit 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 intimidating such customers or prospective customers, or of unduly hampering, injuring, or prejudicing competitors in their business, is an unfair trade practice.

§ 220.15 Inducing breach of contract.

(a) Knowingly inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers or their suppliers, or interfering with or obstructing the performance of any such contractual duties or services, under any circumstance having the capacity and tendency or effect of sub