(a) The terms "leakproof," "guaranteed leakproof" and other words and terms of similar import as descriptive of dry cell batteries are currently used in labeling and advertising in the sale of such batteries in commerce, as "commerce" is defined in the Federal Trade Commission Act. Batteries so described are sold for use in a great number and variety of devices which employ batteries as functional component parts.

(b) Despite efforts by dry cell battery manufacturers to eliminate electrolyte leakage, no dry cell batteries currently marketed and distributed are proof against such leakage. This is evinced by, among other things, statements and statistics furnished by industry members, experts in the field of electrical power sources, marketers of battery operated devices and by consumers. Moreover, the fact that battery leakage does cause extensive damage to devices in which batteries are employed, and to other articles, such as carpets, clothing and furniture has not been disputed.

(c) Although battery leakage may occur while a battery is being discharged, it is more likely to occur after the useful life of the battery has been expended. Consequently, damage from leakage often results from the failure of the user to remove the battery from a device after it has been discharged. Leakage and damage therefrom are also caused or accelerated by continuous drainage of the

current or by the use of a battery in a device which may short out or overheat the battery. Climatic conditions, such as heat or high humidity, may also induce battery leakage. Each year literally thousands of incidents of actual damage resulting from leakage of batteries described as "leakproof" and "guaranteed leakproof" are brought to the attention of battery manufacturers by consumers. Under these circumstances, it is concluded that battery leakage and damage therefrom occurs under those conditions of use to which consumers ordinarily subject dry cell batteries.

The use of the terms "leakproof” and "guaranteed leakproof" and words and representations of similar import in the labeling and advertising of dry cell batteries constitutes a representation that the batteries so described will not leak, and has the capacity and tendency to lead purchasers to believe that there is no danger of leakage or damage resulting therefrom when batteries so described are used in any battery-powered device regardless of the adequacy of design of such device, the duration of use, or other conditions of usage which contribute to electrolyte leakage. Moreover, the use of such terms has the capacity and tendency to lead purchasers to believe that there is no need for periodic inspection of batteries so described.

§ 403.3 Arguments in opposition to the rule.

(a) Many marketers offer a guarantee against damage resulting from leakage. The terms of the guarantee are usually set forth on the battery, and the obligation assumed by most marketers thereunder is to replace batteries and repair or replace any flashlights damaged by leakage. Some marketers voluntarily extend this guarantee to cover the repair or replacement of other devices or property damaged by leakage. It has been argued in opposition to the adoption of the rule that the consumer is adequately protected by scrupulous performance under such guarantees, and that marketers offering these benefits are entitled to call consumer attention thereto by the use of unequivocal “leakproof" claims. This argument is rejected since it is clear that the offering of guarantees and even voluntary performance by the guarantor beyond the

scope of the guarantee cannot justify claims which attribute to a product qualities which it does not in fact possess. As to the contention that to disallow the use of "leakproof" representations would deprive consumers of the protection currently furnished them, the rule clearly states that it shall not be interpreted as prohibiting the offering of guarantees which provide for restitution in the event of damage from electrolyte leakage provided no representation is made that the batteries in question are proof against leakage.

(b) It is further argued in opposition to the adoption of the rule that any prohibition of "leakproof" representations will remove the incentive of industry members to develop a genuinely leakproof dry cell battery. This argument is also rejected. By preventing use of such absolute claims as descriptive of batteries which are not proof against leakage, the rule should have the effect of encouraging members of the industry to develop batteries which are in fact leakproof. In the event such a battery should be constructed, the rule may be amended upon a proper showing to permit use of "leakproof" representations as descriptive of batteries having such "leakproof" construction.

(a) On the basis of the foregoing, the Commission concludes that the practice of describing dry cell batteries as "leakproof", "guaranteed leakproof" or by similar representations has the capacity and tendency to mislead and deceive purchasers and prospective purchasers and to divert business from competitors who do not so describe their products. The Commission further concludes that this practice is violative of section 5 of the Federal Trade Commission Act, and that the public interest in preventing its use is specific and substantial.

(b) Accordingly, for the purpose of preventing such unlawful practices, the Commission hereby promulgates, as a Trade Regulation Rule, its conclusions and determination that in connection with the sale of dry cell batteries in commerce, as "commerce" is defined in the Federal Trade Commission Act, the use of the word "leakproof", the term "guaranteed leakproof" or any other word or term of similar import, or any abbreviation thereof, in advertising, labeling, marking or otherwise, as descriptive

The rule should not be interpreted as prohibiting manufacturers or other marketers from offering or furnishing guarantees which provide for restitution in the event of damage from electrolyte leakage provided no representation is made, directly or indirectly, that dry cell batteries will not leak.

§ 403.6 Future product improvement. In the event any person develops a new or improved dry cell battery which he believes is in fact leakproof, he may apply to the Commission for an amendment to the rule or for other appropriate relief. The application shall be filed with the Secretary, Federal Trade Commission, and be accompanied by a full report of the data upon which the applicant relies to substantiate his claim that the battery is leakproof. The Commission will give public notice of the application and afford interested persons an opportunity to submit written data, views or arguments. The Commission in its discretion may also order such further proceedings as it deems to be necessary. If the Commission determines that the applicant's claim has been substantiated, it will issue an appropriate order amending the rule or taking such other action as may be warranted.

sizes thereof.

It is further shown that the cut sizes, i.e., the dimensions of the material used in making tablecloths and related products before hemming and finishing, are usually larger than the completed or finished sizes thereof. The record also shows that to many consumers the size marked on a tablecloth or related product means the actual size of the finished product and that this meaning is not dispelled by the words "cut size" alone without a disclosure of the finished size identified as such. Upon consideration of the entire matter, including the Commission's accumulated experience in matters involving the unqualified use of the term "cut size", the Commission has concluded that use of the "cut size” alone to designate sizes of tablecloths and related products, has the capacity and tendency to mislead consumer purchasers into believing that such size represents the actual dimensions of the finished product.

§ 404.2

Request for tolerance in stating finished sizes.

The Commission also has carefully considered requests of affected parties for a rule provision which would establish a tolerance in stating the finished sizes of their products. It was asserted that manufacturers of these products are unable to control the exact finished sizes thereof due to variations inherent in the manufacturing and processing operations, as well as to the varying characteristics of different materials used in the manufacture of such products. The primary purpose of this rule is to prevent deception of consumers as to the size of tablecloths and related products. To permit a substantial deviation from the designated size in the form of a tolerance would not be consistent with this purpose. In applying the rule, however, allowance will be made for minor deviations from the stated finished size which are unavoidable despite the exercise of due care.

§ 404.3 The rule.

(a) On the basis of the foregoing, the Commission concludes that the practice of selling tablecloths and related products in commerce, as "commerce" is defined in the Federal Trade Commission Act, marked as to "cut size," i.e., the dimensions of the material used in making such products, without disclosing the size of the finished products, (1) has the capacity and tendency (i) to mislead and

deceive purchasers into believing that the "cut size" represents the actual dimensions of the finished products, whereas the finished sizes of such products are in fact usually smaller than the "cut size" of the materials from which they are made, a matter of importance to the consumer, and (ii) to divert business from competitors who clearly disclose the finished size of their products, and that, therefore, (2) this practice constitutes an unfair method of competition in commerce, and an unfair and deceptive act or practice in commerce, in violation of Section 5 of the Federal Trade Commission Act. The Commission further concludes that the public interest in preventing this practice is specific and substantial.

(b) Accordingly, for the purpose of preventing such unlawful practice, the Commission hereby promulgates, as a Trade Regulation Rule, its conclusions and determination that in connection with the sale or offering for sale of tablecloths and related products such as doilies, table mats, dresser scarves, place mats, table runners, napkins and tea sets, in commerce, as "commerce" is defined in the Federal Trade Commission Act, any representation of the "cut size" or the dimensions of materials used in the construction of tablecloths and related products in advertising, labeling, marking or otherwise, constitutes an unfair method of competition and an unfair and deceptive act or practice, unless

(1) such "cut size” dimensions are accompanied by the words "cut size"; and

(2) the "cut size” is accompanied by a clear and conspicuous disclosure of the dimensions of the finished products and by an explanation that such dimensions constitute the finished size.

Example. An example of proper size marking when the product has a finished size of 50' x 68′′ and a cut size of 52" x 70", and disclosure is made of the cut size, is— "Finished size 50′′ x 68′′; Cut size 52'' x 70''."

SOURCE: The provisions of this Part 405 appear at 29 F.R. 8166, June 27, 1964, unless otherwise noted.

§ 405.1

Character of the deception.

(a) Manufacturers and distributors of men's, boys', women's and children's belts have engaged in the practice of selling certain belts in commerce, as "commerce" is defined in the Federal Trade Commission Act, without adequate disclosure of facts concerning the actual composition thereof or any disclaimer that the product is leather, and have misbranded or otherwise misrepresented the content of such belts. The misbranding or deception in question has involved belts manufactured from split leather, leather fibers or dust, imitation leather or other non-leather material having the appearance of leather, and leather which has been processed or otherwise finished to simulate or resemble the appearance of a different kind of leather.

(b) Some affected parties have urged that the rule should not require affirmative disclosure with respect to the content of waist belts in the absence of any mismarking or mislabeling thereof. This contention is rejected for the reason that it is well settled that deception which is harmful to the business community and the consuming public can result from the misleading appearance of a product in the absence of an affirmative disclosure as to its actual composition or a disclaimer that it is leather. § 405.2 Contentions regarding terminology for split leather.

(a) Several industry members, who utilize split leather primarily in the manufacture of belts for the lower priced market, and their trade association have urged that the word "split” has a derogatory connotation in the trade and that in its place they should be permitted either to use the word "leather", without qualification, to describe such belts or to employ the term "flesh-side" instead of "split". It is argued that the consuming public would be adequately protected if the rule so provided. However, many consumers believe that the word "leather" without qualification, means top grain leather. Moreover, the precise meaning of the term "flesh-side" has not become sufficiently established to be generally accepted even among the trade and it is evident that its use at the retail level would only serve to confuse and mislead the consumer.

(b) On the basis of the foregoing, the Commission concludes that the practices described herein have the capacity and tendency to mislead and deceive purchasers and prospective purchasers of waist belts and to divert business from competitors who clearly and properly describe and label such products. The Commission further concludes that these practices are violative of section 5 of the Federal Trade Commission Act, and that the public interest in preventing their use is specific and substantial.

§ 405.3 Application of the rule to women's and children's belts.

Some industry members expressed the view that all women's belts should be excluded from the proposed rule because many such belts are sold as part of a garment, rather than independently. This contention ignores the fact that very substantial quantities of women's belts are sold singly and not as part of a garment and thus affords no basis for excluding all women's belts from the application of the rule. Upon careful consideration the Commission has concluded that in the public interest the deception here involved would be removed by providing for the marking, tagging or labeling of women's and children's belts when sold separately, in accordance with the provisions of the rule.

§ 405.4 The rule.

Accordingly, for the purpose of preventing such unlawful practices, the Commission hereby promulgates as a Trade Regulation Rule, its conclusions and determination that in connection with the sale or offering for sale of men's and boys' belts, and women's and children's belts when not offered for sale as part of a garment, in commerce, as "commerce" is defined in the Federal Trade Commission Act, it constitutes an unfair method of competition and an unfair and deceptive act or practice to:

(a) Represent, directly or by implication, in advertising, labeling, marking or otherwise:

(1) That a belt which is not made from the hide or skin of an animal is leather (e.g., words such as "leather," "hide" or "skin," or depictions, symbols or other words or terms indicative of leather, shall not be used to describe a belt not made from the hide or skin of an animal); or

(2) That a belt is made of leather when such belt is composed of ground,

pulverized or shredded leather. This provision shall not be construed as prohibiting the use of terms such as "shredded leather fibers" or "pulverized leather," as the case may be, to describe the composition of belts; or

(3) That a belt made of split leather is "genuine cowhide," "finished cowhide," "alligator" or "leather," or use any other term which may indicate that it is composed of top grain leather. Belts composed of split leather shall be described or marked "split leather;" or

(4) That a belt is made from a specified animal hide or skin when such is not the fact (e.g., cowhide shall not be represented as "alligator" or "Morocco") ;

or

(5) That a belt is made wholly of a certain kind of leather or other specified material when in fact it is composed only in part of such leather or other material.

(b) Sell or distribute belts which have the appearance of leather, but which are made of split leather or ground, pulverized or shredded leather or of nonleather material, unless disclosure is made on the product or on tag or label affixed thereto of the composition of the product (e.g., "split leather" or "leather fibers" or "plastic," as the case may be) or of the fact that the product is not leather (e.g., "imitation leather").

(c) Sell or distribute belts made of leather or split leather which has been embossed, dyed or otherwise processed so as to have the appearance of a different kind of leather, unless disclosure is made on the product or on a tag or label affixed thereto of the kind of leather or split leather of which the belts are composed. For example, a belt composed of cowhide embossed or otherwise processed to simulate alligator could be described as "cowhide" or "cowhide embossed to simulate alligator," and a belt composed of split cowhide processed to simulate pigskin grain could be described as "split cowhide" or "split cowhide with simulated pigskin grain."

(d) Sell or distribute belts having an outer surface of leather or other mateIrial, which are backed with a different kind of leather or non-leather material having the appearance of leather, unless disclosure is made on the product or on a tag or label affixed thereto of the kind or type of leather used in the backing or of the fact that the backing is of nonleather material, as the case may be.

406.4 406.5

Deceptive use of the term “re-refined.”
The rule.

AUTHORITY: The provisions of this Part 406 issued under 38 Stat. 717, as amended; 15 U.S.C. 41-58.

SOURCE: The provisions of this Part 406 appear at 29 F.R. 11650, Aug. 14, 1964.

§ 406.1 The practices involved.

Processors, wholesalers and other marketers of lubricating oil composed in whole or in part of used oil, in the sale of such oil in commerce as "commerce” is defined in the Federal Trade Commission Act, have (a) failed to disclose clearly and conspicuously the fact that such oil has been previously used or contains used oil, as the case may be, (b) represented directly or by implication that such oil is new and unused, and (c) represented that such oil has been "re-refined" when in fact the physical and chemical contaminants acquired through use have not been removed by a refining process.

(a) Reclaimers of lubricating oils generally obtain their base stocks from service stations, garages, and cther sources where crankcase drainings and other waste oils are collected. These waste products are subjected to various processes which, depending on the completeness of the process used, result in the removal of some or all of the contaminants acquired through use. The resulting oils, which are sometimes blended with additives and sometimes with oil from virgin stocks, are customarily put into containers of the same general size, kind and appearance as those used for new and unused oil. The oil is then offered for sale to the public at gasoline filling stations and other retail outlets in the same manner and for the same purposes as unused lubricating oil. On the basis of previous Commission decisions, its knowledge of conditions in the marketing of the product, and the matters presented in the course of this rulemaking proceeding, the Commission finds that many consumers prefer new