Industry products. As used in this part, the term industry products includes all types of trees, small fruit plants, shrubs, vines, ornamentals, herbaceous annuals, biennials and perennials, bulbs, corms, rhizomes, and tubers which are offered for sale or sold to the general public. Included are products propagated sexually or asexually and whether grown in a commercial nursery or collected from the wild state. Such products are customarily used for outdoor planting. Not included are florists' or greenhouse plants solely for inside culture or use and annual vegetable plants.

Industry members. Any person, firm, corporation, or organization engaged in the sale, offering for sale, or distribution in commerce of industry products, as defined above.

Lining-out stock. Includes all plant material coming from propagating houses, beds, or frames, and young material such as seedlings rooted or unrooted cuttings, grafts or layers, of suitable size to transplant either in the nursery row or in containers for “growing on.”

Nursery-propagated. Reproduced and grown under cultivation, including reproduced and grown under cultivation from plants, seeds or cuttings lawfully collected from the wild state.

Propagated. Reproduced from seeds, cuttings, callus or other plant tissue, spores or other propagules under a controlled environment that is intensely manipulated by human intervention for the purpose of producing selected species or hybrids.

(a) It is an unfair or deceptive act or practice to sell, offer for sale, or distribute industry products by any method or under any circumstance or condition that misrepresents directly or by implication to purchasers or prospective purchasers the products with respect to quantity, size, grade, kind, species, age, maturity, condition, vigor, hardiness, number of times transplanted, growth ability, growth characteristics, rate of growth or time required before flowering or fruiting, price, origin or place where grown, or any other material aspect of the industry product.

(b) The inhibitions of this section shall apply to every type of advertisement or method of representation, whether in newspaper, periodical, sales catalog, circular, by tag, label or insignia, by radio or television, by sales representatives, or otherwise.

(c) Among practices inhibited by the foregoing are direct or indirect representations:

(1) That plants have been propagated by grafting or bud selection methods, when such is not the fact.

(2) That industry products are healthy, will grow anywhere without the use of fertilizer, or will survive and produce without special care, when such is not the fact.

(3) That plants will bloom the year round, or will bear an extraordinary number of blooms of unusual size or quality, when such is not the fact.

(4) That an industry product is a new variety, when in fact it is a standard variety to which the industry member has given a new name.

(5) That an industry product cannot be purchased through usual retail outlets, or that there are limited stocks available, when such is not the fact.

(6) That industry products offered for sale will be delivered in time for the next (or any specified) seasonal planting when the industry member is aware of factors which make such delivery improbable.

(7) That the appearance of an industry product as to size, color, contour, foliage, bloom, fruit or other physical characteristic is normal or usual when the appearance so represented is in fact abnormal or unusual.

(8) That the root system of any plant is larger in depth or diameter than that which actually exists, whether accomplished by excessive packaging material, or excessive balling, or other deceptive or misleading practice.

(9) That bublets are bulbs.

(10) That an industry product is a rare or unusual item when such is not the fact. [Guide 1]

(a) In the sale, offering for sale, or distribution of an industry product, it is an unfair or deceptive act or practice for any industry member to use a name for such product that misrepresents directly or by implication to purchasers or prospective purchasers its true identity.

(b) Subject to the foregoing:

(1) When an industry product has a generally recognized and well-established common name, it is proper to use such name as a designation therefor, either alone or in conjunction with the correct botanical name of the product.

(2) When an industry product has a generally recognized and well-established common name, it is an unfair or deceptive act or practice for an industry member to adopt and use a new name for the product unless such new name is immediately accompanied by the generally recognized and well-established common name, or by the correct botanical name, or by a description of the nature and properties of the product which is of sufficient detail to prevent confusion and deception of purchasers or prospective purchasers as to the true identity of the product.

(3) When an industry product does not have a generally recognized and well-established common name, and a name other than the correct botanical name of the product is applied thereto, such other name shall be immediately accompanied by either the correct botanical name of the product, or a description of the nature and properties of the product which is of sufficient detail as to prevent confusion and deception of purchasers and prospective purchasers as to the true identity of the product.

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair or deceptive act or practice for an industry member to use any term, designation, number, letter, mark, or symbol as a size or grade designation for any industry product in a manner or under any circumstance that misrepresents directly or by implication to purchasers or prospective purchasers the actual size or grade of such products.

(b) Under this section industry members offering lining-out stock for sale shall specify conspicuously and accurately the size and age of such stock when failure to do so may misrepresent directly or by implication such stock to purchasers or prospective purchasers.

(c) Nothing in this section is to be construed as inhibiting the designation of the size or grade of an industry product by use of a size or grade designation for which a standard has been established which is generally recognized in the industry when the identity of such standard is conjunctively disclosed, the product qualifies for the designation under such standard, and no deception of purchasers or prospective purchasers results in the use of such designation.

It is an unfair or deceptive act or practice to sell, offer for sale, or distribute industry products collected from the wild state without disclosing that they were collected from the wild state; provided, however, that plants propagated in nurseries from plants lawfully collected from the wild state may be designated as “nursery-propagated.” [Guide 6]

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair or deceptive act or practice for any industry member to represent itself directly or by implication to be a grower or propagator of such products, or any portion thereof, or to have any other experience or qualification either relating to the growing or propagation of such products or enabling the industry member to be of assistance to purchasers or prospective purchasers in the selection by them of the kinds or types of products, or the placement thereof, when such is not the fact, or in any other manner to misrepresent directly or by implication the character, nature, or extent of the industry member's business.

(b) It is also an unfair or deceptive act or practice for an industry member to use the word “guild,” “club,” “association,” “council,” “society,” “foundation,” or any other word of similar import or meaning, as part of a trade name, or otherwise, in such a manner or under such circumstances as to indicate or imply that its business is other than a commercial enterprise operated for profit, unless such be true in fact, or so as to deceive purchasers or prospective purchasers in any other material respect. [Guide 7]

(a) It is an unfair or deceptive act or practice to sell, offer for sale, or advertise an industry product by misrepresenting directly or by implication the origin or source of such product to purchasers or prospective purchasers (e.g., by use of the term Holland to describe bulbs grown in the U.S.A.); provided, however, that when a plant has an accepted common name that incorporates a geographical term and such term has lost its geographical significance as so used, the mere use of such common names does not constitute a misrepresentation as to source or origin (e.g., “Colorado Blue Spruce,” “Arizona Cypress,” “Black Hills Spruce,” “California Privet,” “Japanese Barberry,” etc.).

(b) It is also an unfair or deceptive act or practice to advertise, sell, or offer for sale an industry product of foreign origin without adequate and non-deceptive disclosure of the name of the foreign country from which it came, where the failure to make such disclosure would be misleading to purchasers or prospective purchasers. [Guide 8]

Industry member. Any person, firm, corporation or organization engaged in the sale or distribution of any industry product as defined below.

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, reconditioned, relined, or otherwise. The term automotive assemblies as herein used mean any part or assembly designed for an automobile, truck, motorcycle, tractor or similar self-propelled vehicle. Industry products include, but are not limited to, armatures, generators, starters, carburetors, clutches, distributors, 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, spark plugs, springs, windshield wiper motors and water pumps. Automobile tires are not products of the industry.

(a) It is an unfair trade practice to represent, directly or by implication, that any industry product is new or unused, or that any part of an industry product is new or unused when such is not the fact, or to misrepresent the extent of previous use thereof.

(b) It is an unfair trade practice for an industry member to offer for sale or sell any industry product unless a clear and conspicuous disclosure that such product has been used or contains used parts is made in all the industry member's advertising, sales promotional literature and invoices concerning the product, on the container in which the product is packed and if the product has been rebuilt, remanufactured, reconditioned or has the appearance of being new, on the product with sufficient permanency to remain thereon after installation for a reasonable period of time under ordinary conditions of use, and in such manner that said disclosure cannot be easily removed or obliterated.

(1) Form of disclosure. The disclosure that an industry product has been used or contains used parts as required by this section may be made by use of a word such as, but not limited to, “Used,” “Secondhand,” “Repaired,” “Remanufactured,” “Reconditioned,” “Rebuilt,” or “Relined,” whichever is applicable to the product involved. On invoices to the trade only the disclosure required by this section may be made by use of any number, mark, or other symbol which is clearly understood by all purchasers receiving such invoices as meaning that the products, or parts thereof, identified on the invoices have been used.

(2) Conspicuousness of disclosure. The disclosure required by this section shall be of such size or color contrast and so placed as to be readily noticeable to purchasers or prospective purchasers reading advertising, sales promotional literature, or invoices containing same, or reading any representation as to content on the container in which an industry product is packed, or inspecting an industry product before installation, or with a minimum of disassembly after installation.

(c) It is an unfair trade practice to place any means or instrumentality in the hands of others whereby they may mislead purchasers or prospective purchasers as to the previous use of -industry products or parts thereof. [Guide 1]

(a) It is an unfair trade practice to misrepresent the identity of the rebuilder, remanufacturer, reconditioner or reliner of an industry product.

(b) In connection with the sale or offering for sale of an industry product if the identity of the original manufacturer of the product, or the identity of the manufacturer for which the product was originally made, is revealed and the product was rebuilt, remanufactured, reconditioned or relined by other than the manufacturer so identified, it is an unfair trade practice to fail to disclose such fact wherever either of said manufacturers is identified in advertising and sales promotional literature concerning the product, on the container in which the product is packed, and on the product, in close conjunction with, and of the same permanency and conspicuousness as, the disclosure of previous use of the product required by this section. Examples of disclosures considered to be in compliance with the requirements of this section are as follows:

(1) Disclosure of the identity of the rebuilder as, for example:

(2) Disclosure that the product was rebuilt by an independent rebuilder as, for example:

(3) Disclosure that the product was rebuilt by other than the manufacturer so identified as, for example:

(4) Disclosure that the product was rebuilt for the identified manufacturer, if such is the case, as for example:

(a) It is an unfair trade practice to use, or cause or promote the use of, any statement or representation in advertising, on containers, on industry products, or elsewhere, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the condition of an industry product, or the extent that an industry product has been repaired or reconstructed.

(b) It is an unfair trade practice to use the words “Rebuilt,” “Remanufactured,” or words of similar import, as descriptive of an industry product which, since it was last subjected to any use, has not been dismantled and reconstructed as necessary, all of its internal and external parts cleaned and made free from rust and corrosion, all impaired, defective or substantially worn parts restored to a sound condition or replaced with new, rebuilt 1 or unimpaired used parts, all missing parts replaced with new, rebuilt 1 or unimpaired used parts, and such rewinding or machining and other operations performed as are necessary to put the industry product in sound working condition.

(c) It is an unfair trade practice to represent an industry product as “Factory Rebuilt” unless the product was rebuilt as described in paragraph (b) of this section at a factory generally engaged in the rebuilding of such products. (See also § 20.2) [Guide 3]

(a) These guides apply to jewelry industry products, which include, but are not limited to, the following: gem-stones and their laboratory-created and imitation substitutes; natural and cultured pearls and their imitations; and metallic watch bands not permanently attached to watches. 1 These guides also apply to articles, including optical frames, pens and pencils, flatware, and hollowware, fabricated from precious metals (gold, silver and platinum group metals), precious metal alloys, and their imitations. These guides also apply to all articles made from pewter. For the purposes of these guides, all articles covered by these guides are defined as “industry products.”

(b) These guides apply to persons, partnerships, or corporations, at every level of the trade (including but not limited to manufacturers, suppliers, and retailers) engaged in the business of offering for sale, selling, or distributing industry products.

(c) These guides apply to claims and representations about industry products included in labeling, advertising, promotional materials, and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, illustrations, depictions, product brand names, or through any other means.

It is unfair or deceptive to misrepresent the type, kind, grade, quality, quantity, metallic content, size, weight, cut, color, character, treatment, substance, durability, serviceability, origin, price, value, preparation, production, manufacture, distribution, or any other material aspect of an industry product.

It is unfair or deceptive to use, as part of any advertisement, packaging material, label, or other sales promotion matter, any visual representation, picture, televised or computer image, illustration, diagram, or other depiction which, either alone or in conjunction with any accompanying words or phrases, misrepresents the type, kind, grade, quality, quantity, metallic content, size, weight, cut, color, character, treatment, substance, durability, serviceability, origin, preparation, production, manufacture, distribution, or any other material aspect of an industry product.

(a) It is unfair or deceptive to represent, directly or by implication, that any industry product is hand-made or hand-wrought unless the entire shaping and forming of such product from raw materials and its finishing and decoration were accomplished by hand labor and manually-controlled methods which permit the maker to control and vary the construction, shape, design, and finish of each part of each individual product.

(b) It is unfair or deceptive to represent, directly or by implication, that any industry product is hand-forged, hand-engraved, hand-finished, or hand-polished, or has been otherwise hand-processed, unless the operation described was accomplished by hand labor and manually-controlled methods which permit the maker to control and vary the type, amount, and effect of such operation on each part of each individual product.

(a) It is unfair or deceptive to misrepresent the presence of gold or gold alloy in an industry product, or the quantity or karat fineness of gold or gold alloy contained in the product, or the karat fineness, thickness, weight ratio, or manner of application of any gold or gold alloy plating, covering, or coating on any surface of an industry product or part thereof.

(b) The following are examples of markings or descriptions that may be misleading: 2

(1) Use of the word “Gold” or any abbreviation, without qualification, to describe all or part of an industry product, which is not composed throughout of fine (24 karat) gold.

(2) Use of the word “Gold” or any abbreviation to describe all or part of an industry product composed throughout of an alloy of gold, unless a correct designation of the karat fineness of the alloy immediately precedes the word “Gold” or its abbreviation, and such fineness designation is of at least equal conspicuousness.

(3) Use of the word “Gold” or any abbreviation to describe all or part of an industry product that is not composed throughout of gold or a gold alloy, but is surface-plated or coated with gold alloy, unless the word “Gold” or its abbreviation is adequately qualified to indicate that the product or part is only surface-plated.

(4) Use of the term “Gold Plate,” “Gold Plated,” or any abbreviation to describe all or part of an industry product unless such product or part contains a surface-plating of gold alloy, applied by any process, which is of such thickness and extent of surface coverage that reasonable durability is assured.

(5) Use of the terms “Gold Filled,” “Rolled Gold Plate,” “Rolled Gold Plated,” “Gold Overlay,” or any abbreviation to describe all or part of an industry product unless such product or part contains a surface-plating of gold alloy applied by a mechanical process and of such thickness and extent of surface coverage that reasonable durability is assured, and unless the term is immediately preceded by a correct designation of the karat fineness of the alloy that is of at least equal conspicuousness as the term used.

(6) Use of the terms “Gold Plate,” “Gold Plated,” “Gold Filled,” “Rolled Gold Plate,” “Rolled Gold Plated,” “Gold Overlay,” or any abbreviation to describe a product in which the layer of gold plating has been covered with a base metal (such as nickel), which is covered with a thin wash of gold, unless there is a disclosure that the primary gold coating is covered with a base metal, which is gold washed.

(7) Use of the term “Gold Electroplate,” “Gold Electroplated,” or any abbreviation to describe all or part of an industry product unless such product or part is electroplated with gold or a gold alloy and such electroplating is of such karat fineness, thickness, and extent of surface coverage that reasonable durability is assured.

(8) Use of any name, terminology, or other term to misrepresent that an industry product is equal or superior to, or different than, a known and established type of industry product with reference to its gold content or method of manufacture.

(9) Use of the word “Gold” or any abbreviation, or of a quality mark implying gold content (e.g., 9 karat), to describe all or part of an industry product that is composed throughout of an alloy of gold of less than 10 karat fineness.

(c) The following are examples of markings and descriptions that are consistent with the principles described above:

(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 conspicuousness as the word “Gold” (for example, “14 Karat Gold,” “14 K. Gold,” or “14 Kt. Gold”). Such product may also be marked and described by a designation of the karat fineness of the gold alloy unaccompanied by the word “Gold” (for example, “14 Karat,” “14 Kt.,” or “14 K.”).

(2) An industry product or part thereof, on which there has been affixed on all significant surfaces, by any process, a coating, electroplating, or deposition by any means, of gold or gold alloy of not less than 10 karat fineness that is of substantial thickness, 3 and the minimum thickness throughout of which is equivalent to one-half micron (or approximately 20 millionths of an inch) of fine gold, 4 may be marked or described as “Gold Plate” or “Gold Plated,” or abbreviated, as, for example, G.P. The exact thickness of the plate may be marked on the item, if it is immediately followed by a designation of the karat fineness of the plating which is of equal conspicuousness as the term used (as, for example, “2 microns 12 K. gold plate” or “2μ 12 K. G.P.” for an item plated with 2 microns of 12 karat gold.)

(3) An industry product or part thereof on which there has been affixed on all significant surfaces by soldering, brazing, welding, or other mechanical means, a plating of gold alloy of not less than 10 karat fineness and of substantial thickness 5 may be marked or described as “Gold Filled,” “Gold Overlay,” “Rolled Gold Plate,” or an adequate abbreviation, when such plating constitutes at least 1/20th 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 (for example, “14 Karat Gold Filled,” “14 Kt. Gold Filled,” “14 Kt. G.F.,” “14 Kt. Gold Overlay,” or “14K. R.G.P.”). When conforming to all such requirements except the specified minimum of 1/20th of the weight of the metal in the entire article, the terms “Gold Overlay” and “Rolled Gold Plate” may be used when the karat fineness designation is immediately preceded by a fraction accurately disclosing 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 (for example, “1/40th 12 Kt. Rolled Gold Plate” or “1/40 12 Kt. R.G.P.”).

(4) An industry product or part thereof, on which there has been affixed on all significant surfaces by an electrolytic process, an electroplating of gold, or of a gold alloy of not less than 10 karat fineness, which has a minimum thickness throughout equivalent to .175 microns (approximately 7/1,000,000ths of an inch) of fine gold, may be marked or described as “Gold Electroplate” or “Gold Electroplated,” or abbreviated, as, for example, “G.E.P.” When the electroplating meets the minimum fineness but not the minimum thickness specified above, the marking or description may be “Gold Flashed” or “Gold Washed.” When the electroplating is of the minimum fineness specified above and of a minimum thickness throughout equivalent to two and one half (21/2) microns (or approximately 100/1,000,000ths of an inch) of fine gold, the marking or description may be “Heavy Gold Electroplate” or “Heavy Gold Electroplated.” When electroplatings 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 particular kind of electrolytic process, the marking may be accompanied by identification of the process used, as for example, “Gold Electroplated (X Process)” or “Heavy Gold Electroplated (Y Process).”

(d) The provisions of this section relating to markings and descriptions of industry products and parts thereof are subject to the applicable tolerances of the National Stamping Act or any amendment thereof. 6

(a) It is unfair or deceptive to represent, directly or by implication, that an industry product is “vermeil” if such mark or description misrepresents the product's true composition.

(b) An industry product may be described or marked as “vermeil” if it consists of a base of sterling silver coated or plated on all significant surfaces with gold, or gold alloy of not less than 10 karat fineness, that is of substantial thickness 7 and a minimum thickness throughout equivalent to two and one half (21/2) microns (or approximately 100/1,000,000ths of an inch) of fine gold.

(a) It is unfair or deceptive to misrepresent that an industry product contains silver, or to misrepresent an industry product as having a silver content, plating, electroplating, or coating.

(b) It is unfair or deceptive to mark, describe, or otherwise represent all or part of an industry product as “silver,” “solid silver,” “Sterling Silver,” “Sterling,” or the abbreviation “Ster.” unless it is at least 925/1,000ths pure silver.

(c) It is unfair or deceptive to mark, describe, or otherwise represent all or part of an industry product as “coin” or “coin silver” unless it is at least 900/1,000ths pure silver.

(d) It is unfair or deceptive to mark, describe, or otherwise represent all or part of an industry product as being plated or coated with silver unless all significant surfaces of the product or part contain a plating or coating of silver that is of substantial thickness. 8

(e) The provisions of this section relating to markings and descriptions of industry products and parts thereof are subject to the applicable tolerances of the National Stamping Act or any amendment thereof. 9

(a) It is unfair or deceptive to use the words “platinum,” “iridium,” “palladium,” “ruthenium,” “rhodium,” and “osmium,” or any abbreviation to mark or describe all or part of an industry product if such marking or description misrepresents the product's true composition. The Platinum Group Metals (PGM) are Platinum, Iridium, Palladium, Ruthenium, Rhodium, and Osmium.

(b) The following are examples of markings or descriptions that may be misleading: 10

(1) Use of the word “Platinum” or any abbreviation, without qualification, to describe all or part of an industry product that is not composed throughout of 950 parts per thousand pure Platinum.

(2) Use of the word “Platinum” or any abbreviation accompanied by a number indicating the parts per thousand of pure Platinum contained in the product without mention of the number of parts per thousand of other PGM contained in the product, to describe all or part of an industry product that is not composed throughout of at least 850 parts per thousand pure platinum, for example, “600Plat.”

(3) Use of the word “Platinum” or any abbreviation thereof, to mark or describe any product that is not composed throughout of at least 500 parts per thousand pure Platinum.

(c) The following are examples of markings and descriptions that are not considered unfair or deceptive:

(1) The following abbreviations for each of the PGM may be used for quality marks on articles: “Plat.” or “Pt.” for Platinum; “Irid.” or “Ir.” for Iridium; “Pall.” or “Pd.” for Palladium; “Ruth.” or “Ru.” for Ruthenium; “Rhod.” or “Rh.” for Rhodium; and “Osmi.” or “Os.” for Osmium.

(2) An industry product consisting of at least 950 parts per thousand pure Platinum may be marked or described as “Platinum.”

(3) An industry product consisting of 850 parts per thousand pure Platinum, 900 parts per thousand pure Platinum, or 950 parts per thousand pure Platinum may be marked “Platinum,” provided that the Platinum marking is preceded by a number indicating the amount in parts per thousand of pure Platinum (for industry products consisting of 950 parts per thousand pure Platinum, the marking described in § 23.7(b)(2) above is also appropriate). Thus, the following markings may be used: “950Pt.,” “950Plat.,” “900Pt.,” “900Plat.,” “850Pt.,” or “850Plat.”

(4) An industry product consisting of at least 950 parts per thousand PGM, and of at least 500 parts per thousand pure Platinum, may be marked “Platinum,” provided that the mark of each PGM constituent is preceded by a number indicating the amount in parts per thousand of each PGM, as for example, “600Pt.350Ir.,” “600Plat.350Irid.,” or “550Pt.350Pd.50Ir.,” “550Plat.350Pall.50Irid.”

(a) It is unfair or deceptive to mark, describe, or otherwise represent all or part of an industry product as “Pewter” or any abbreviation if such mark or description misrepresents the product's true composition.

(b) An industry product or part thereof may be described or marked as “Pewter” or any abbreviation if it consists of at least 900 parts per 1000 Grade A Tin, with the remainder composed of metals appropriate for use in pewter.

As used in these guides, the term quality mark means any letter, figure, numeral, symbol, sign, word, or term, or any combination thereof, that has been stamped, embossed, inscribed, or otherwise placed on any industry product and which indicates or suggests that any such product is composed throughout of any precious metal or any precious metal alloy or has a surface or surfaces on which there has been plated or deposited any precious metal or precious metal alloy. Included are the words “gold,” “karat,” “carat,” “silver,” “sterling,” “vermeil,” “platinum,” “iridium,” “palladium,” “ruthenium,” “rhodium,” or “osmium,” or any abbreviations thereof, whether used alone or in conjunction with the words “filled,” “plated,” “overlay,” or “electroplated,” or any abbreviations thereof. Quality markings include those in which the words or terms “gold,” “karat,” “silver,” “vermeil,” “platinum” (or platinum group metals), or their abbreviations are included, either separately or as suffixes, prefixes, or syllables.

(a) Deception as to applicability of marks. (1) If a quality mark on an industry product is applicable to only part of the product, the part of the product to which it is applicable (or inapplicable) should be disclosed when, absent such disclosure, the location of the mark misrepresents the product or part's true composition.

(2) If a quality mark is applicable to only part of an industry product, but not another part which is of similar surface appearance, each quality mark should be closely accompanied by an identification of the part or parts to which the mark is applicable.

(b) Deception by reason of difference in the size of letters or words in a marking or markings. It is unfair or deceptive to place a quality mark on a product in which the words or letters appear in greater size than other words or letters of the mark, or when different markings placed on the product have different applications and are in different sizes, when the net impression of any such marking would be misleading as to the metallic composition of all or part of the product. (An example of improper marking would be the marking of a gold electroplated product with the word “electroplate” in small type and the word “gold” in larger type, with the result that purchasers and prospective purchasers of the product might only observe the word “gold.”)

(a) It is unfair or deceptive to:

(1) Use the terms “corrosion proof,” “noncorrosive,” “rust proof,” or any other term of similar meaning to describe an industry product unless all parts of the product will be immune from rust and other forms of corrosion during the life expectancy of the product; or

(2) Use the terms “corrosion resistant,” “rust resistant,” or any other term of similar meaning to describe an industry product unless all parts of the product are of such composition as to not be subject to material damage by corrosion or rust during the major portion of the life expectancy of the product under normal conditions of use.

(b) Among the metals that may be considered as corrosion (and rust) resistant are: Pure nickel; Gold alloys of not less than 10 Kt. fineness; and Austenitic stainless steels.

(a) A diamond is a natural mineral consisting essentially of pure carbon crystallized in the isometric system. It is found in many colors. Its hardness is 10; its specific gravity is approximately 3.52; and it has a refractive index of 2.42.

(b) It is unfair or deceptive to use the unqualified word “diamond” to describe or identify any object or product not meeting the requirements specified in the definition of diamond provided above, or which, though meeting such requirements, has not been symmetrically fashioned with at least seventeen (17) polished facets.

(c) The following are examples of descriptions that are not considered unfair or deceptive:

(1) The use of the words “rough diamond” to describe or designate uncut or unfaceted objects or products satisfying the definition of diamond provided above; or

(2) The use of the word “diamond” to describe or designate objects or products satisfying the definition of diamond but which have not been symmetrically fashioned with at least seventeen (17) polished facets when in immediate conjunction with the word “diamond” there is either a disclosure of the number of facets and shape of the diamond or the name of a type of diamond that denotes shape and that usually has less than seventeen (17) facets (e.g., “rose diamond”).

(a) It is unfair or deceptive to use the word “flawless” to describe any diamond that discloses flaws, cracks, inclusions, carbon spots, clouds, internal lasering, or other blemishes or imperfections of any sort when examined under a corrected magnifier at 10-power, with adequate illumination, by a person skilled in diamond grading.

(b) It is unfair or deceptive to use the word “perfect,” or any representation of similar meaning, to describe any diamond unless the diamond meets the definition of “flawless” and is not of inferior color or make.

(c) It is unfair or deceptive to use the words “flawless” or “perfect” to describe a ring or other article of jewelry having a “flawless” or “perfect” principal diamond or diamonds, and supplementary stones that are not of such quality, unless there is a disclosure that the description applies only to the principal diamond or diamonds.

If a diamond has been treated by artificial coloring, tinting, coating, irradiating, heating, by the use of nuclear bombardment, or by the introduction or the infusion of any foreign substance, it is unfair or deceptive not to disclose that the diamond has been treated and that the treatment is not or may not be permanent.

It is unfair or deceptive to use the term “blue white” or any representation of similar meaning to describe any diamond that under normal, north daylight or its equivalent shows any color or any trace of any color other than blue or bluish.

It is unfair or deceptive to use the terms “properly cut,” “proper cut,” “modern cut,” or any representation of similar meaning to describe any diamond that is lopsided, or is so thick or so thin in depth as to detract materially from the brilliance of the stone.

It is unfair or deceptive to use the unqualified expressions “brilliant,” “brilliant cut,” or “full cut” to describe, identify, or refer to any diamond except a round diamond that has at least thirty-two (32) facets plus the table above the girdle and at least twenty-four (24) facets below.

(a) It is unfair or deceptive to misrepresent the weight of a diamond.

(b) It is unfair or deceptive to use the word “point” or any abbreviation in any representation, advertising, marking, or labeling to describe the weight of a diamond, unless the weight is also stated as decimal parts of a carat (e.g., 25 points or .25 carat).

(c) If diamond weight is stated as decimal parts of a carat (e.g., .47 carat), the stated figure should be accurate to the last decimal place. If diamond weight is stated to only one decimal place (e.g., .5 carat), the stated figure should be accurate to the second decimal place (e.g., “.5 carat” could represent a diamond weight between .495-.504).

(d) If diamond weight is stated as fractional parts of a carat, a conspicuous disclosure of the fact that the diamond weight is not exact should be made in close proximity to the fractional representation and a disclosure of a reasonable range of weight for each fraction (or the weight tolerance being used) should also be made.

As used in these guides, the terms set forth below have the following meanings:

(a) Pearl: A calcareous concretion consisting essentially of alternating concentric layers of carbonate of lime and organic material formed within the body of certain mollusks, the result of an abnormal secretory process caused by an irritation of the mantle of the mollusk following the intrusion of some foreign body inside the shell of the mollusk, or due to some abnormal physiological condition in the mollusk, neither of which has in any way been caused or induced by humans.

(b) Cultured Pearl: The composite product created when a nucleus (usually a sphere of calcareous mollusk shell) planted by humans inside the shell or in the mantle of a mollusk is coated with nacre by the mollusk.

(c) Imitation Pearl: A manufactured product composed of any material or materials that simulate in appearance a pearl or cultured pearl.

(d) Seed Pearl: A small pearl, as defined in (a), that measures approximately two millimeters or less.

(a) It is unfair or deceptive to use the unqualified word “pearl” or any other word or phrase of like meaning to describe, identify, or refer to any object or product that is not in fact a pearl, as defined in § 23.18(a).

(b) It is unfair or deceptive to use the word “pearl” to describe, identify, or refer to a cultured pearl unless it is immediately preceded, with equal conspicuousness, by the word “cultured” or “cultivated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is not a pearl.

(c) It is unfair or deceptive to use the word “pearl” to describe, identify, or refer to an imitation pearl unless it is immediately preceded, with equal conspicuousness, by the word “artificial,” “imitation,” or “simulated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is not a pearl.

(d) It is unfair or deceptive to use the terms “faux pearl,” “fashion pearl,” “Mother of Pearl,” or any other such term to describe or qualify an imitation pearl product unless it is immediately preceded, with equal conspicuousness, by the word “artificial,” “imitation,” or “simulated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is not a pearl.

(a) It is unfair or deceptive to use the term “cultured pearl,” “cultivated pearl,” or any other word, term, or phrase of like meaning to describe, identify, or refer to any imitation pearl.

(b) It is unfair or deceptive to use the term “seed pearl” or any word, term, or phrase of like meaning to describe, identify, or refer to a cultured or an imitation pearl, without using the appropriate qualifying term “cultured” (e.g., “cultured seed pearl”) or “simulated,” “artificial,” or “imitation” (e.g., “imitation seed pearl”).

(c) It is unfair or deceptive to use the term “Oriental pearl” or any word, term, or phrase of like meaning to describe, identify, or refer to any industry product other than a pearl taken from a salt water mollusk and of the distinctive appearance and type of pearls obtained from mollusks inhabiting the Persian Gulf and recognized in the jewelry trade as Oriental pearls.

(d) It is unfair or deceptive to use the word “Oriental” to describe, identify, or refer to any cultured or imitation pearl.

(e) It is unfair or deceptive to use the word “natura,” “natural,” “nature's,” or any word, term, or phrase of like meaning to describe, identify, or refer to a cultured or imitation pearl. It is unfair or deceptive to use the term “organic” to describe, identify, or refer to an imitation pearl, unless the term is qualified in such a way as to make clear that the product is not a natural or cultured pearl.

(f) It is unfair or deceptive to use the term “kultured,” “semi-cultured pearl,” “cultured-like,” “part-cultured,” “pre-mature cultured pearl,” or any word, term, or phrase of like meaning to describe, identify, or refer to an imitation pearl.

(g) It is unfair or deceptive to use the term “South Sea pearl” unless it describes, identifies, or refers to a pearl that is taken from a salt water mollusk of the Pacific Ocean South Sea Islands, Australia, or Southeast Asia. It is unfair or deceptive to use the term “South Sea cultured pearl” unless it describes, identifies, or refers to a cultured pearl formed in a salt water mollusk of the Pacific Ocean South Sea Islands, Australia, or Southeast Asia.

(h) It is unfair or deceptive to use the term “Biwa cultured pearl” unless it describes, identifies, or refers to cultured pearls grown in fresh water mollusks in the lakes and rivers of Japan.

(i) It is unfair or deceptive to use the word “real,” “genuine,” “precious,” or any word, term, or phrase of like meaning to describe, identify, or refer to any imitation pearl.

(j) It is unfair or deceptive to use the word “gem” to describe, identify, or refer to a pearl or cultured pearl that does not possess the beauty, symmetry, rarity, and value necessary for qualification as a gem.

(k) It is unfair or deceptive to use the word “synthetic” or similar terms to describe cultured or imitation pearls.

(l) It is unfair or deceptive to use the terms “Japanese Pearls,” “Chinese Pearls,” “Mallorca Pearls,” or any regional designation to describe, identify, or refer to any cultured or imitation pearl, unless the term is immediately preceded, with equal conspicuousness, by the word “cultured,” “artificial,” “imitation,” or “simulated,” or by some other word or phrase of like meaning, so as to indicate definitely and clearly that the product is a cultured or imitation pearl.

It is unfair or deceptive to misrepresent the manner in which cultured pearls are produced, the size of the nucleus artificially inserted in the mollusk and included in cultured pearls, the length of time that such products remained in the mollusk, the thickness of the nacre coating, the value and quality of cultured pearls as compared with the value and quality of pearls and imitation pearls, or any other material matter relating to the formation, structure, properties, characteristics, and qualities of cultured pearls.

It is unfair or deceptive to fail to disclose that a gemstone has been treated in any manner that is not permanent or that creates special care requirements, and to fail to disclose that the treatment is not permanent, if such is the case. The following are examples of treatments that should be disclosed because they usually are not permanent or create special care requirements: coating, impregnation, irradiating, heating, use of nuclear bombardment, application of colored or colorless oil or epoxy-like resins, wax, plastic, or glass, surface diffusion, or dyeing. This disclosure may be made at the point of sale, except that disclosure should be made in any solicitation where the product can be purchased without viewing (e.g., direct mail catalogs, on-line services), and in the case of televised shopping programs, on the air. If special care requirements for a gemstone arise because the gemstone has been treated, it is recommended that the seller disclose the special care requirements to the purchaser.

It is unfair or deceptive to use the word “real,” “genuine,” “natural,” “precious,” “semi-precious,” or similar terms to describe any industry product that is manufactured or produced artificially.

(a) It is unfair or deceptive to use the word “gem” to describe, identify, or refer to a ruby, sapphire, emerald, topaz, or other industry product that does not possess the beauty, symmetry, rarity, and value necessary for qualification as a gem.

(b) It is unfair or deceptive to use the word “gem” to describe any laboratory-created industry product unless the product meets the requirements of paragraph (a) of this section and unless such word is immediately accompanied, with equal conspicuousness, by the word “laboratory-grown,” “laboratory-created,” or “[manufacturer-name]-created,” “synthetic,” or by some other word or phrase of like meaning, so as to clearly disclose that it is not a natural gem.

(a) It is unfair or deceptive to use the word “flawless” as a quality description of any gemstone that discloses blemishes, inclusions, or clarity faults of any sort when examined under a corrected magnifier at 10-power, with adequate illumination, by a person skilled in gemstone grading.

(b) It is unfair or deceptive to use the word “perfect” or any representation of similar meaning to describe any gemstone unless the gemstone meets the definition of “flawless” and is not of inferior color or make.

(c) It is unfair or deceptive to use the word “flawless,” “perfect,” or any representation of similar meaning to describe any imitation gemstone.

(a) The Guides in this part apply to the manufacture, sale, distribution, marketing, or advertising of all kinds or types of leather or simulated-leather trunks, suitcases, traveling bags, sample cases, instrument cases, brief cases, ring binders, billfolds, wallets, key cases, coin purses, card cases, French purses, dressing cases, stud boxes, tie cases, jewel boxes, travel kits, gadget bags, camera bags, ladies' handbags, shoulder bags, purses, pocketbooks, footwear, belts (when not sold as part of a garment) and similar articles (hereinafter, “industry products”).

(b) These Guides represent administrative interpretations of laws administered by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. These Guides specifically address the application of section 5 of the FTC Act (15 U.S.C. 45) to the manufacture, sale, distribution, marketing, and advertising of industry products listed in paragraph (a) of this section. They provide the basis for voluntary compliance with such laws by members of industry. Conduct inconsistent with the positions articulated in these Guides may result in corrective action by the Commission under section 5 if, after investigation, the Commission has reason to believe that the behavior falls within the scope of conduct declared unlawful by the statute.

It is unfair or deceptive to misrepresent, directly or by implication, the kind, grade, quality, quantity, material content, thickness, finish, serviceability, durability, price, origin, size, weight, ease of cleaning, construction, manufacture, processing, distribution, or any other material aspect of an industry product.

It is unfair or deceptive to misrepresent, directly or by implication, the composition of any industry product or part thereof. It is unfair or deceptive to use the unqualified term “leather” or other unqualified terms suggestive of leather to describe industry products unless the industry product so described is composed in all substantial parts of leather.1 This section includes, but is not limited to, the following:

(a) Imitation or simulated leather. If all or part of an industry product is made of non-leather material that appears to be leather, the fact that the material is not leather, or the general nature of the material as something other than leather, should be disclosed. For example: Not leather; Imitation leather; Simulated leather; Vinyl; Vinyl coated fabric; or Plastic.

(b) Embossed or processed leather. The kind and type of leather from which an industry product is made should be disclosed when all or part of the product has been embossed, dyed, or otherwise processed so as to simulate the appearance of a different kind or type of leather. For example:

(1) An industry product made wholly of top grain cowhide that has been processed so as to imitate pigskin may be represented as being made of Top Grain Cowhide.

(2) Any additional representation concerning the simulated appearance of an industry product composed of leather should be immediately accompanied by a disclosure of the kind and type of leather in the product. For example: Top Grain Cowhide With Simulated Pigskin Grain.

(c) Backing material. (1) The backing of any material in an industry product with another kind of material should be disclosed when the backing is not apparent upon casual inspection of the product, or when a representation is made which, absent such disclosure, would be misleading as to the product's composition. For example: Top Grain Cowhide Backed With Vinyl.

(2) The composition of the different backing material should be disclosed if it is visible and consists of non-leather material with the appearance of leather, or leather processed so as to simulate a different kind of leather.

(d) Misuse of trade names, etc. A trade name, coined name, trademark, or other word or term, or any depiction or device should not be used if it misrepresents, directly or by implication, that an industry product is made in whole or in part from animal skin or hide, or that material in an industry product is leather or other material. This includes, among other practices, the use of a stamp, tag, label, card, or other device in the shape of a tanned hide or skin or in the shape of a silhouette of an animal, in connection with any industry product that has the appearance of leather but that is not made wholly or in substantial part from animal skin or hide.

(e) Misrepresentation that product is wholly of a particular composition. A misrepresentation should not be made, directly or by implication, that an industry product is made wholly of a particular composition. A representation as to the composition of a particular part of a product should clearly indicate the part to which the representation applies.2 Where a product is made principally of leather but has certain non-leather parts that appear to be leather, the product may be described as made of leather so long as accompanied by clear disclosure of the non-leather parts. For example:

(1) An industry product made of top grain cowhide except for frame covering, gussets, and partitions that are made of plastic but have the appearance of leather may be described as: Top Grain Cowhide With Plastic Frame Covering, Gussets and Partitions; or Top Grain Cowhide With Gussets, Frame Covering and Partitions Made of Non-Leather Material.

(2) An industry product made throughout, except for hardware, of vinyl backed with cowhide may be described as: Vinyl Backed With Cowhide (See also disclosure provision concerning use of backing material in paragraph (c) of this section).

(3) An industry product made of top grain cowhide except for partitions and stay, which are made of plastic-coated fabric but have the appearance of leather, may be described as: Top Grain Cowhide With Partitions and Stay Made of Non-leather Material; or Top Grain Cowhide With Partitions and Stay Made of Plastic-Coated Fabric.

(f) Ground, pulverized, shredded, reconstituted, or bonded leather. A material in an industry product that contains ground, pulverized, shredded, reconstituted, or bonded leather and thus is not wholly the hide of an animal should not be represented, directly or by implication, as being leather. This provision does not preclude an accurate representation as to the ground, pulverized, shredded, reconstituted, or bonded leather content of the material. However, if the material appears to be leather, it should be accompanied by either:

(1) An adequate disclosure as described by paragraph (a) of this section; or

(2) If the terms “ground leather,” “pulverized leather,” “shredded leather,” “reconstituted leather,” or “bonded leather” are used, a disclosure of the percentage of leather fibers and the percentage of non-leather substances contained in the material. For example: An industry product made of a composition material consisting of 60% shredded leather fibers may be described as: Bonded Leather Containing 60% Leather Fibers and 40% Non-leather Substances.

(g) Form of disclosures under this section. All disclosures described in this section should appear in the form of a stamping on the product, or on a tag, label, or card attached to the product, and should be affixed so as to remain on or attached to the product until received by the consumer purchaser. All such disclosures should also appear in all advertising of such products irrespective of the media used whenever statements, representations, or depictions appear in such advertising which, absent such disclosures, serve to create a false impression that the products, or parts thereof, are of a certain kind of composition. The disclosures affixed to products and made in advertising should be of such conspicuousness and clarity as to be noted by purchasers and prospective purchasers casually inspecting the products or casually reading, or listening to, such advertising. A disclosure necessitated by a particular representation should be in close conjunction with the representation.

As used in this part, the terms Industry Product or Product shall mean pneumatic tires for use on passenger automobiles, station wagons, and similar vehicles, or the materials used therein. The term Industry Member shall mean: All persons or firms who are engaged in the manufacture, sale or distribution of industry products as above defined whether under the manufacturer's or a private brand; and the manufacturers of passenger automobiles, station wagons, and similar vehicles for which industry products are provided as original equipment.

The following general principles will be used in determining whether terminology and other direct or indirect representations subject to the Commission's jurisdiction regarding industry products conform to laws administered by the Commission.

(a) The purchase of tires for a motor vehicle is an extremely important matter to the consumer. Not only are substantial economic factors involved, but in most instances the purchaser will entrust the safety of himself and others to the performance of the product.

(b) To avoid being deceived, the consumer must have certain basic information. Certain of this information should be provided before the purchaser makes his choice but other is essential throughout the life of the tire.

(1) Disclosure before the sale. The following information should be disclosed in point of sale material which is prominently displayed and of easy access, on the premises where the purchase is to be made in order to appraise the consumer:

(i) Load-carrying capacity of the tire. This information is essential to assure the purchaser that the tires he selects are capable of safely carrying the intended load. This information should consist of the maximum load-carrying capacity as related to various recommended air pressures and may include data which indicates the effect such varying pressures will have on the operation of the automobile. All such information shall be based on actual tests utilizing adequate and technically sound procedures. The test procedures and results shall be in writing and available for inspection.

(ii) Generic name of cord material. Different cord materials can have performance characteristics that will affect the consumer's selection of tires. These various characteristics are widely advertised, and the consumer is aware of the distinctions. Without a disclosure of the generic name of the cord material, the consumer is unable to consider this factor in his purchase.

(iii) Actual number of plies. Consumers have preference for industry products of a stated type of construction (e.g., 2 ply v. 4 ply). Without adequate disclosure the consumer is denied the basis for considering this factor in his selection.

(2) Disclosure on the tire. The following information should be clearly disclosed in a permanent manner on the outside wall of the tire:

(i) Size. Size is extremely important not only to insure that the tire will fit the vehicle wheel, but because it also is a determining factor as to the load-carrying capacity of the vehicle.

(ii) Whether tire is tubeless or tube type.

(iii) Actual number of plies.

(3) Other disclosures—(i) Generic name of cord material used in ply. A disclosure of the generic name of the cord material used in the ply of the tire should be made on a label or tag prominently displayed on the tire itself, and affixed in such a fashion that it cannot be easily removed prior to sale.

(ii) Load-carrying capacity and inflation pressure. One of the most important factors in obtaining tire performance is proper care and use. Included in such care is inflating the tire to the required level as related to load-carrying capacity and use. To insure that such pressures are maintained by the user and the tire is not overloaded beyond its safe capacity, a table or chart should be provided for retention by the purchaser. This will apprise the purchaser of the load-carrying capacity of the tires as related to the range of recommended air pressures and use. It may also supply data which indicate the effect such varying pressures will have on the operation of the automobile.

(a) There exists today no industrywide, government or other accepted system of quality standards or grading of industry products. Within the industry, however, a variety of trade terminology has developed which, when used in conjunction with consumer transactions, has the tendency to suggest that a system of quality standards or grading does in fact exist. Typical of such terminology are the expressions “line,” “level,” and “premium.” The exact meaning of such terminology may vary from one industry member to another. Therefore, the “1st line” or “100 level” or “premium” tire of one industry member may be grossly inferior to the “1st line” or “100 level” or “premium” tire of another member since in the absence of an accepted system of grading or quality standards, each member can determine what “line,” “level,” or “premium” classification to attach to a tire.

(b) The consumer does not understand the significance of the absence of accepted grading or quality standards and is likely to assume that the expressions “line,” “level,” and “premium” connote valid criteria. Since the consumer is likely to misinterpret the meaning of such terminology, he may be deceived into purchasing an inferior product because it has been given such designation.

(c) In the absence of an accepted system of grading or quality standards for industry products, it is improper to represent, either through the use of such expressions as “line,” “level,” “premium” or in any other manner, that such a system exists, unless the representation is accompanied by a clear and conspicuous disclosure:

(1) That no industrywide or other accepted system of quality standards or grading of industry products currently exists, and

(2) That representations as to grade, line, level, or quality, relate only to the private standard of the marketer of the tire so described (e.g., “XYZ first line”).

(d) Additionally, products should not be described as being “first line” unless the products so described are the best products, exclusive of premium quality products embodying special features, of the manufacturer or brand name distributor applying such designation. [Guide 2]

In the advertising or labeling of products, industry members should not use designations for grades of products they offer to the public:

(a) Which have the capacity to deceive purchasers into believing that such products are equal or superior to a better grade or grades of their products when such conclusion would be contrary to fact (for example, if the “first line” tire of a manufacturer is designated as “Standard,” “High Standard,” or “Deluxe High Standard,” the tires of that manufacturer which are of lesser quality should not be designated or described as “Super Standard,” “Supreme High Standard,” “Super Deluxe High Standard,” or “Premium”), or

(b) Which are otherwise false or misleading.

Original equipment tires are understood to mean the same brand and quality tires used generally as original equipment on new current models of vehicles of domestic manufacture. A tire which was formerly but is not currently used as “Original Equipment,” should not be described as “Original Equipment” without clear and conspicuous disclosure in close conjunction with the term, of the latest actual year such tire was used as “Original Equipment.” [Guide 4]

Representations and claims made by industry members that their products are superior in quality or performance to other products should not be made unless:

(a) The representation or claim is based on an actual test utilizing adequate and technically sound procedures of the performance of the advertised product and of the product with which it is compared; the test procedure, results of which are in writing and available for inspection; and

(b) The basis of the comparison is clearly stated and the comparison is based on identical conditions of use. Dangling comparatives should not be used.

(c) Claims or representations that one tire is comparable or identical to another should not be used unless the advertiser is able to establish that such tires are comparable not only as respects the molds in which the tires are made, but also as respects all significant materials used in their construction.[Guide 5]

(a) The fabric that is utilized in the ply is known as the cord material. The use of a particular type of cord material may be determined by the use to which the tire will be placed. One type of cord material may provide one desired characteristic, but not be used because of other characteristics which may be unfavorable.

(b) The type of cord material utilized in a tire is not necessarily determinative of its ultimate quality, performance or strength. Through variations in the denier of the material, the amount to be used and other construction aspects of the tire, the ultimate quality, performance, and strength is determined.

(c) It is improper to represent in advertising, or otherwise, that solely because a particular type of cord material is utilized in the construction of a tire, it is superior to tires constructed with other types of cord material. Such advertising is deceptive for it creates that impression in the consumer's mind whereas in fact it does not take into consideration the other variable aspects of tire construction.

(d) When the type of cord material is referred to in advertising, it must be made clear that it is only the cord that is of the particular material and not the entire tire. For example, it would be improper to refer to a product as “Nylon Tire.” The proper description is “Nylon Cord Tire.” Similarly, when the manufacturer of the cord material is mentioned, it should be made clear that he did not manufacture the tire. For example, a tire should be described as “Brand X Nylon Cord Material” and not “Brand X Nylon Tire.”

(e) Cord material should be identified by its generic name when referred to in advertising. [Guide 7]

Industry products should not be represented as “Change-Overs” or “New Car Take Offs” unless the products so described have been subjected to but insignificant use necessary in moving new vehicles prior to delivery of such vehicles to franchised distributor or retailer. “Change-Overs” or “New Car Take Offs” should not be described as new. Advertisements of such products should include a clear and conspicuous disclosure that “Change-Overs” or “New Car Take Offs” have been subjected to previous use. [Guide 8]

Advertisements of used or retreaded products should clearly and conspicuously disclose that same are not new products. Unexplained terms, such as “New Tread,” “Nu-Tread” and “Snow Tread” as descriptive of such tires do not constitute adequate disclosure that tires so described are not new. Any terms disclosing that tires are not new also shall not misrepresent the performance, the type of manufacture, or any other attribute of such tires. See § 228.18. [Guide 9]

Advertisements should clearly and conspicuously disclose that the products offered are discontinued models or designs or are obsolete when such is the fact.

Advertisements of products which are blemished, imperfect, or which for any reason are defective, should contain conspicuous disclosure of that fact. In addition, such products should have permanently stamped or molded thereon or affixed thereto and to the wrappings in which they are encased a plain and conspicuous legend or statement to the effect that such products are blemished, imperfect, or defective. Such markings by a legend such as “XX” or by a color marking or by any other code designation which is not generally understood by the public are not considered to be an adequate disclosure. [Guide 11]

(a) It is improper to utilize in advertising, any picture or depiction of an industry product other than the product offered for sale. Where price is featured in advertising, any picture or depiction utilized in connection therewith should be the exact tire offered for sale at the advertised price.

(b) For example, it would be improper to depict a white side wall tire with a designated price when the price is applicable to black wall tires. Such practice would be improper even if a disclosure is made elsewhere in the advertisement that the featured price is not for the depicted whitewalls. [Guide 12]

(a) Advertising in connection with racing, speed records, or similar events should clearly and conspicuously disclose that the tires on the vehicle are not generally available all purpose tires, unless such is the fact.

(b) The requirement of this section is applicable also to special purpose racing tires, which although available for such special purpose, are not the advertiser's general purpose product.

(c) Similarly, designations should not be utilized in conjunction with any industry product which falsely suggest, directly or indirectly, that such product is the identical one utilized in racing events or in a particular event. [Guide 13]

(a) Bait advertising is an alluring but insincere offer to sell a product which the advertiser in truth does not intend or want to sell. Its purpose is to obtain leads as to persons interested in buying industry products and to induce them to visit the member's premises. After the person visits the premises, the primary effort is to switch him from buying the advertised product in order to sell something else, usually at a higher price.

(b) No advertisement containing an offer to sell a product should be published when the offer is not a bona fide effort to sell the advertised product. Among the acts and practices which will be considered in determining if an advertisement is bona fide are:

(1) The advertising of a product at a price applicable only to unusual or off size tires or for special purpose tires;

(2) The refusal to show or sell the product offered in accordance with the terms of the offer;

(3) The failure to have available at all outlets listed in the advertisement a sufficient quantity of the advertised product to meet reasonably anticipated demands, unless the advertisement clearly and adequately discloses that the supply is limited and/or the merchandise is available only at designated outlets;

(4) The disparagement by acts or words of the advertised product or the disparagement of the guarantee, credit terms, or in any other respect in connection with it;

(5) Use of a sales plan or method of compensation for salesmen or penalizing salesmen, designed to prevent or discourage them from selling the advertised product. [Guide 14]

(a) Former price comparisons. One form of advertising in the replacement market is the offering of reductions or savings from the advertiser's former price. This type of advertising may take many forms, of which the following are examples:

(b) Trade area price comparisons. (1) Another recognized form of bargain advertising is to offer tires at prices lower than those being charged by others for the same tires in the area where the advertiser is doing business. Examples of this type of advertising where used in connection with the advertiser's own price are:

(2) The tire market, because of its nature, requires that special care and precaution be exercised before this type of advertising is used. Trade area price comparisons are understood by purchasers to mean that the represented bargain is a reduction or saving from the price being charged by representative retail outlets for the same tires at the time of the advertisement.

(3) If a tire manufacturer decides to conduct a promotion of a particular tire, reduces the price in his wholly owned stores and independent dealers follow the promotion price, the “sale” price has become the retail price in the area and it would be deceptive to represent that this “sale” price is reduced from that charged by others. In most circumstances where a promotion is sponsored by the manufacturer and is followed by the wholly owned stores and most of the independent dealers in the area, such trade area price comparisons would be improper.

(4) A trade area price comparison would be valid where an individual dealer, acting on his own, decides to lower the price of a tire significantly below that being charged by others in his area. In this situation, he would be honestly offering a genuine reduction from the price charged by others in his area.

(5) When using a retail price comparison great care should be exercised to make the advertising clear that the basis of the reduction or saving is the price being charged by others and not the advertiser's own former selling price.

(c) Substantiality of reduction or savings. In order for an advertiser to represent that a price is reduced or offers savings to purchasers without specifying the extent thereof, it is necessary that the represented reduction or savings be significant. When the amount of the reduction or savings is not stated in advertising and is not substantial enough to attract and influence prospective purchasers if they knew the true facts, the representation is deceptive.

(d) Representations of specific price reductions and savings. (1) Advertisements which offer a specified amount or percentage of price reduction or savings should not be used where there is no determinable regular selling price, whether it be the advertiser's former price or the retail price in the area.

(2) The lack of a determinable actual selling price does not preclude all “sale” advertising. For example, if a dealer desires to offer a tire at a price which represents a significant reduction from the lowest price in the range of prices at which he has actually sold the tire in the recent regular course of his business, it would not be deceptive to advertise the tire with such representations as “Sale Priced,” “Reduced” or “Save.”

(3) However, an advertiser is not precluded from offering specific savings from the lowest price at which he has actually sold tires, provided that the advertising clearly states that the offered savings are a reduction from the lowest previous selling price and not from the advertiser's regular selling price.

(e) No trade-in prices. (1) The most common device used in advertising is to offer a purported reduction or savings from a so-called “no trade-in” price. Prospective purchasers are entitled to believe this to mean that they would realize a savings from the price they would have had to pay for the tire prior to the “Sale,” either in cash or in cash plus the fair value of a traded-in tire. If this is not true, purchasers are deceived. Where a significant number of sales in relation to a seller's total sales is not made at the so-called “no trade-in” price and such price appreciably exceeds the price purchasers would normally pay the seller (including the fair value of any trade-in), use of the price as a basis for claiming a reduction or savings would be deceptive and contrary to this part.

(2) Representations of high trade-in allowances are sometimes used in combination with fictitious “no trade-in” prices to deceive purchasers. These may take the form of direct representations that a specified amount (usually significantly higher than the value of the tire carcass) will be allowed for a trade-in tire, or, representations of specific savings in the purchase of a new tire when a tire is traded in during a “sale.” In either case, the purchaser is given the illusion of a bargain in the guise of a high trade-in allowance which he does not in fact receive if the amount of the allowance is deducted from a fictitiously high “no trade-in” price.

(f) Combination offers. (1) Frequent use is made in the tire market of purported bargain advertising which offers “free” or at a represented reduced price a tire, some other article of merchandise or a service, with the purchase of one or more tires at a specified price. The following are typical examples of this type of offer:

(g) Federal Excise Tax. Since the Federal Excise Tax on tires is assessed on the manufacturer and is based on the weight of the materials used and not the retail selling price, the tax should be included in the price quoted for a particular tire, or the amount of the tax set out in immediate conjunction with the tire price. For example, assuming the tax on a particular tire to be $1 and the advertised selling price $9.95, the price should be stated as “$10.95” or “$9.95 plus $1 Federal Excise Tax” and not “$9.95 plus Federal Excise Tax.”

(h) Advertising furnished by tire manufacturers. It is the practice of some tire manufacturers to supply advertising to independent as well as to wholly owned retail outlets in local trade areas. A tire manufacturer providing advertising material to be used in local trade areas by either wholly owned or independent outlets is responsible for the representations made in such advertising and should base price and savings claims on conditions actually existing in the particular areas. In view of price fluctuations at the local level, the general dissemination (i.e., in more than one trade area) to independent retail outlets of advertising material containing stated prices or reduction claims results in deception 1 and is, accordingly, contrary to this part. [Guide 15]

(a) In general, any advertising containing a guarantee representation shall clearly and conspicuously disclose:

(1) The nature and extent of the guarantee. (i) The general nature of the guarantee should be disclosed. If the guarantee is, for example, against defects in material or workmanship, this should be clearly revealed.

(ii) Disclosure should be made of any material conditions or limitations in the guarantee. This would include any limitation as to the duration of a guarantee, whether stated in terms of treadwear, time, mileage, or otherwise. Exclusion of tire punctures also would constitute a material limitation. If the guarantor's performance is conditioned on the return of the tire to the dealer who made the original sale, this fact should be revealed.

(iii) When a tire is represented as “guaranteed for life” or as having a “lifetime guarantee,” the meaning of the term life or lifetime should be explained.

(iv) Guarantees which under normal conditions are impractical of fulfillment or for such a period of time or number of miles as to mislead purchasers into the belief the tires so guaranteed have a greater degree of serviceability or durability than is true in fact, should not be used.

(2) The manner in which the guarantor will perform. This consists generally of a statement of what the guarantor undertakes to do under the guarantee. Types of performance would be repair of the tire, refund of purchase price or replacement of the tire. If the guarantor has an option as to the manner of the performance, this should be expressly stated.

(3) The identity of the guarantor. The identity of the guarantor should be clearly revealed in all advertising, as well as in any documents evidencing the guarantee. Confusion of purchasers often occurs when it is not clear whether the manufacturer or the retailer is the guarantor.

(4) Pro rata adjustment of guarantees—(i) Disclosure in advertising. Many guarantees provide that in the event of tire failure during the guarantee period a credit will be allowed on the purchase price of a replacement tire, the amount of the credit being in proportion to the treadwear or time remaining under the guarantee. All advertising of the guarantee should clearly disclose the pro rata nature of the guarantee and the price basis upon which adjustments will be made.

(ii) Price basis for adjustments. Usually under this type of guarantee the same predetermined amount is used as a basis for the prorated credit and the purchase price of the replacement tire. If this so-called “adjustment” price is not the actual selling price but is an artificial, inflated price the purchaser does not receive the full value of his guarantee. This is illustrated by the following example:

(b) Accordingly, to avoid deception of purchasers as to the value of guarantees, adjustments should be made on the basis of a price which realistically reflects the actual selling price of the tire. The following would be considered appropriate price bases for making guarantee adjustments:

(1) The original purchase price of the guaranteed tire; or

(2) The adjusting dealer's actual current selling price at the time of adjustment; or

(3) A predetermined price which fairly represents the actual selling price of the tire.

Absolute terms such as “skidproof,” “blowout proof,” “blow proof,” “puncture proof” should not be unqualifiedly used unless the product so described affords complete and absolute protection from skidding, blowouts, or punctures, as the case may be, under any and all driving conditions. [Guide 17]

(a) No claim or representation should be made concerning an industry product which directly, by implication, or by failure to adequately disclose additional relevant information, has the capacity or tendency or effect of deceiving purchasers or prospective purchasers in any material respect. This prohibition includes, but is not limited to, representations or claims relating to the construction, durability, safety, strength, condition or life expectancy of such products.

(b) Also included among the prohibitions of this section are claims or representations by members of this industry or by distributors of any component parts of materials used in the manufacture of industry products, concerning the merits or comparative merits (as to strength, safety, cooler running, wear, or resistance to shock, heat, moisture, etc.) of such products, components or materials, which are not true in fact or which are otherwise false or misleading. [Guide 18]

Many manufacturers are now offering winter tread tires with metal spikes. Certain States, or other jurisdictions, however, prohibit the use of such tires because of possible road damage. Accordingly, in the advertising of such products, a clear and conspicuous statement should be made that the use of such tires is illegal in certain States or jurisdictions. Further, when such tires are locally advertised in areas where their use is prohibited, a clear and conspicuous statement to this effect must be included. [Guide 19]

(a) One of the most commonly used forms of bargain advertising is to offer a reduction from the advertiser's own former price for an article. If the former price is the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time, it provides a legitimate basis for the advertising of a price comparison. Where the former price is genuine, the bargain being advertised is a true one. If, on the other hand, the former price being advertised is not bona fide but fictitious—for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction—the “bargain” being advertised is a false one; the purchaser is not receiving the unusual value he expects. In such a case, the “reduced” price is, in reality, probably just the seller's regular price.

(b) A former price is not necessarily fictitious merely because no sales at the advertised price were made. The advertiser should be especially careful, however, in such a case, that the price is one at which the product was openly and actively offered for sale, for a reasonably substantial period of time, in the recent, regular course of his business, honestly and in good faith—and, of course, not for the purpose of establishing a fictitious higher price on which a deceptive comparison might be based. And the advertiser should scrupulously avoid any implication that a former price is a selling, not an asking price (for example, by use of such language as, “Formerly sold at $___”), unless substantial sales at that price were actually made.

(c) The following is an example of a price comparison based on a fictitious former price. John Doe is a retailer of Brand X fountain pens, which cost him $5 each. His usual markup is 50 percent over cost; that is, his regular retail price is $7.50. In order subsequently to offer an unusual “bargain”, Doe begins offering Brand X at $10 per pen. He realizes that he will be able to sell no, or very few, pens at this inflated price. But he doesn't care, for he maintains that price for only a few days. Then he “cuts” the price to its usual level—$7.50—and advertises: “Terrific Bargain: X Pens, Were $10, Now Only $7.50!” This is obviously a false claim. The advertised “bargain” is not genuine.

(d) Other illustrations of fictitious price comparisons could be given. An advertiser might use a price at which he never offered the article at all; he might feature a price which was not used in the regular course of business, or which was not used in the recent past but at some remote period in the past, without making disclosure of that fact; he might use a price that was not openly offered to the public, or that was not maintained for a reasonable length of time, but was immediately reduced.

(e) If the former price is set forth in the advertisement, whether accompanied or not by descriptive terminology such as “Regularly,” “Usually,” “Formerly,” etc., the advertiser should make certain that the former price is not a fictitious one. If the former price, or the amount or percentage of reduction, is not stated in the advertisement, as when the ad merely states, “Sale,” the advertiser must take care that the amount of reduction is not so insignificant as to be meaningless. It should be sufficiently large that the consumer, if he knew what it was, would believe that a genuine bargain or saving was being offered. An advertiser who claims that an item has been “Reduced to $9.99,” when the former price was $10, is misleading the consumer, who will understand the claim to mean that a much greater, and not merely nominal, reduction was being offered. [Guide I]

(a) Another commonly used form of bargain advertising is to offer goods at prices lower than those being charged by others for the same merchandise in the advertiser's trade area (the area in which he does business). This may be done either on a temporary or a permanent basis, but in either case the advertised higher price must be based upon fact, and not be fictitious or misleading. Whenever an advertiser represents that he is selling below the prices being charged in his area for a particular article, he should be reasonably certain that the higher price he advertises does not appreciably exceed the price at which substantial sales of the article are being made in the area—that is, a sufficient number of sales so that a consumer would consider a reduction from the price to represent a genuine bargain or saving. Expressed another way, if a number of the principal retail outlets in the area are regularly selling Brand X fountain pens at $10, it is not dishonest for retailer Doe to advertise: “Brand X Pens, Price Elsewhere $10, Our Price $7.50”.

(b) The following example, however, illustrates a misleading use of this advertising technique. Retailer Doe advertises Brand X pens as having a “Retail Value $15.00, My Price $7.50,” when the fact is that only a few small suburban outlets in the area charge $15. All of the larger outlets located in and around the main shopping areas charge $7.50, or slightly more or less. The advertisement here would be deceptive, since the price charged by the small suburban outlets would have no real significance to Doe's customers, to whom the advertisement of “Retail Value $15.00” would suggest a prevailing, and not merely an isolated and unrepresentative, price in the area in which they shop.

(c) A closely related form of bargain advertising is to offer a reduction from the prices being charged either by the advertiser or by others in the advertiser's trade area for other merchandise of like grade and quality—in other words, comparable or competing merchandise—to that being advertised. Such advertising can serve a useful and legitimate purpose when it is made clear to the consumer that a comparison is being made with other merchandise and the other merchandise is, in fact, of essentially similar quality and obtainable in the area. The advertiser should, however, be reasonably certain, just as in the case of comparisons involving the same merchandise, that the price advertised as being the price of comparable merchandise does not exceed the price at which such merchandise is being offered by representative retail outlets in the area. For example, retailer Doe advertises Brand X pen as having “Comparable Value $15.00”. Unless a reasonable number of the principal outlets in the area are offering Brand Y, an essentially similar pen, for that price, this advertisement would be deceptive. [Guide II]

(a) Many members of the purchasing public believe that a manufacturer's list price, or suggested retail price, is the price at which an article is generally sold. Therefore, if a reduction from this price is advertised, many people will believe that they are being offered a genuine bargain. To the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer.

(b) There are many methods by which manufacturers' suggested retail or list prices are advertised: Large scale (often nationwide) mass-media advertising by the manufacturer himself; preticketing by the manufacturer; direct mail advertising; distribution of promotional material or price lists designed for display to the public. The mechanics used are not of the essence. This part is concerned with any means employed for placing such prices before the consuming public.

(c) There would be little problem of deception in this area if all products were invariably sold at the retail price set by the manufacturer. However, the widespread failure to observe manufacturers' suggested or list prices, and the advent of retail discounting on a wide scale, have seriously undermined the dependability of list prices as indicators of the exact prices at which articles are in fact generally sold at retail. Changing competitive conditions have created a more acute problem of deception than may have existed previously. Today, only in the rare case are all sales of an article at the manufacturer's suggested retail or list price.

(d) But this does not mean that all list prices are fictitious and all offers of reductions from list, therefore, deceptive. Typically, a list price is a price at which articles are sold, if not everywhere, then at least in the principal retail outlets which do not conduct their business on a discount basis. It will not be deemed fictitious if it is the price at which substantial (that is, not isolated or insignificant) sales are made in the advertiser's trade area (the area in which he does business). Conversely, if the list price is significantly in excess of the highest price at which substantial sales in the trade area are made, there is a clear and serious danger of the consumer being misled by an advertised reduction from this price.

(e) This general principle applies whether the advertiser is a national or regional manufacturer (or other non-retail distributor), a mail-order or catalog distributor who deals directly with the consuming public, or a local retailer. But certain differences in the responsibility of these various types of businessmen should be noted. A retailer competing in a local area has at least a general knowledge of the prices being charged in his area. Therefore, before advertising a manufacturer's list price as a basis for comparison with his own lower price, the retailer should ascertain whether the list price is in fact the price regularly charged by principal outlets in his area.

(f) In other words, a retailer who advertises a manufacturer's or distributor's suggested retail price should be careful to avoid creating a false impression that he is offering a reduction from the price at which the product is generally sold in his trade area. If a number of the principal retail outlets in the area are regularly engaged in making sales at the manufacturer's suggested price, that price may be used in advertising by one who is selling at a lower price. If, however, the list price is being followed only by, for example, small suburban stores, house-to-house canvassers, and credit houses, accounting for only an insubstantial volume of sales in the area, advertising of the list price would be deceptive.

(g) On the other hand, a manufacturer or other distributor who does business on a large regional or national scale cannot be required to police or investigate in detail the prevailing prices of his articles throughout so large a trade area. If he advertises or disseminates a list or preticketed price in good faith (i.e., as an honest estimate of the actual retail price) which does not appreciably exceed the highest price at which substantial sales are made in his trade area, he will not be chargeable with having engaged in a deceptive practice. Consider the following example:

(h) Manufacturer Roe, who makes Brand X pens and sells them throughout the United States, advertises his pen in a national magazine as having a “Suggested Retail Price $10,” a price determined on the basis of a market survey. In a substantial number of representative communities, the principal retail outlets are selling the product at this price in the regular course of business and in substantial volume. Roe would not be considered to have advertised a fictitious “suggested retail price.” If retailer Doe does business in one of these communities, he would not be guilty of a deceptive practice by advertising, “Brand X Pens, Manufacturer's Suggested Retail Price, $10, Our Price, $7.50.”

(i) It bears repeating that the manufacturer, distributor or retailer must in every case act honestly and in good faith in advertising a list price, and not with the intention of establishing a basis, or creating an instrumentality, for a deceptive comparison in any local or other trade area. For instance, a manufacturer may not affix price tickets containing inflated prices as an accommodation to particular retailers who intend to use such prices as the basis for advertising fictitious price reductions. [Guide III]

(a) Frequently, advertisers choose to offer bargains in the form of additional merchandise to be given a customer on the condition that he purchase a particular article at the price usually offered by the advertiser. The forms which such offers may take are numerous and varied, yet all have essentially the same purpose and effect. Representative of the language frequently employed in such offers are “Free,” “Buy One—Get One Free,” “2-For-1 Sale,” “Half Price Sale,” “1¢ Sale,” “50% Off,” etc. Literally, of course, the seller is not offering anything “free” (i.e., an unconditional gift), or 1/2 free, or for only 1¢, when he makes such an offer, since the purchaser is required to purchase an article in order to receive the “free” or “1¢” item. It is important, therefore, that where such a form of offer is used, care be taken not to mislead the consumer.

(b) Where the seller, in making such an offer, increases his regular price of the article required to be bought, or decreases the quantity and quality of that article, or otherwise attaches strings (other than the basic condition that the article be purchased in order for the purchaser to be entitled to the “free” or “1¢” additional merchandise) to the offer, the consumer may be deceived.

(c) Accordingly, whenever a “free,” “2-for-1,” “half price sale,” “1¢ sale,” “50% off” or similar type of offer is made, all the terms and conditions of the offer should be made clear at the outset. [Guide IV]

The practices covered in the provisions set forth above represent the most frequently employed forms of bargain advertising. However, there are many variations which appear from time to time and which are, in the main, controlled by the same general principles. For example, retailers should not advertise a retail price as a “wholesale” price. They should not represent that they are selling at “factory” prices when they are not selling at the prices paid by those purchasing directly from the manufacturer. They should not offer seconds or imperfect or irregular merchandise at a reduced price without disclosing that the higher comparative price refers to the price of the merchandise if perfect. They should not offer an advance sale under circumstances where they do not in good faith expect to increase the price at a later date, or make a “limited” offer which, in fact, is not limited. In all of these situations, as well as in others too numerous to mention, advertisers should make certain that the bargain offer is genuine and truthful. Doing so will serve their own interest as well as that of the public. [Guide V]

Products which do not, after application, have the same physical and chemical properties of metal, or of a particular represented metal, shall not be represented as metal or as having the intrinsic characteristics of metal, or of the particular metal indicated. Thus, neither the term metal nor the terms iron, steel, aluminum or other names of metal shall be used to designate in brand names or otherwise any product of the kind herein described. While this section does not prohibit truthful representations in advertising and labeling of the percentage of content of any metallic substances in such products (e.g., contains 20 percent powdered aluminum) it does prohibit with respect thereto the use of representations such as, but not limited to, the following:

Products which, when used, do not form a metallic seal or bond, shall not be represented as solders or as welding products unless it is clearly disclosed in connection therewith that they are nonmetallic, as for example, “Plastic Solder” or “Plastic Weld.” A “solder” or “weld” product which is nonmetallic shall not be represented as producing a metallic seal or bond. This section does not prohibit an accurate representation of the percentage of metallic substance contained in a product. [Guide 2]

(a) The word “porcelain” shall not be used to designate in brand names or otherwise any product which, after application, does not possess all of the chemical and physical properties of porcelain. Under this section products of the type herein described shall not be represented as being, among other things:

(b) This section does not prohibit truthful representations of the actual percentage of porcelain contained in an industry product as, for example,

(a) No product shall be represented as being an epoxy adhesive unless the epoxy component thereof is derived from an epoxide or oxirane which, when applied in use, chemically reacts with a hardener or curing agent to form a substantially infusible and insoluble bond.

(b) No product containing an epoxy shall be represented as having the characteristics and capabilities of an epoxy adhesive, where the epoxy component present in the product is in an amount not sufficient to produce the characteristics and capabilities represented.

(c) No representation shall be made that the epoxy component in an industry product is present to produce the characteristics and capabilities of an epoxy adhesive where such component is not productive of such characteristics and capabilities, but is present for a different purpose and use. [Guide 4]

(a) The word “rubber” or other words denominating rubber shall not be used to designate, in brand names or otherwise, any product which, after application, does not possess the essential characteristics of rubber. Under this section such a product shall not be represented as, for example, “Rubber,” “Plastic Rubber,” “Liquid Rubber,” etc.

(b) This section does not prohibit truthful representation of the actual percentage of rubber contained in a product. [Guide 5]

(a) No representation shall be made in any manner respecting any adhesive products to which this part is applicable which is likely to mislead or deceive purchasers as to their nature, composition, characteristics, uses, effectiveness, capabilities, durability, toughness, hardness, adhesive strength, lasting effect, thermal or electrical properties, resistance to water, steam, gas, or chemicals, or in any other material respect.

(b) Among the representations prohibited by this section are the following:

(1) Representations that a product will seal, repair or mend “anything” when, in fact, there are certain materials which it cannot seal, repair or mend.

(2) Representations that a product is proof against or will withstand any specified temperature when in fact the product is adversely affected in any way when subjected to such temperature for any period of time.

(3) Representations that a product will effect permanent repairs if, in fact, the repairs made by use of the product will not last as long as the product so repaired.

(4) Representations that a product makes any product like new if it does not actually restore the part thereof repaired to its original new condition. [Guide 6]

Industry members shall not represent in advertising or otherwise that a product is “guaranteed” without a clear and conspicuous disclosure in close conjunction with such representation of:

(a) The nature and extent of the guarantee; and

(b) Any material conditions or limitations in the guarantee which are imposed by the guarantor; and

(c) The manner in which the guarantor will perform thereunder; and

(d) The identity of the guarantor.

Manufacturers and distributors shall not place in the hands of wholesalers, jobbers, retailers, or others, promotional material by or through which they may deceive or mislead the purchasing and consuming public concerning any product. [Guide 8]

Bait advertising is an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised.

No advertisement containing an offer to sell a product should be published when the offer is not a bona fide effort to sell the advertised product. [Guide 1]

(a) No statement or illustration should be used in any advertisement which creates a false impression of the grade, quality, make, value, currency of model, size, color, usability, or origin of the product offered, or which may otherwise misrepresent the product in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised product to another.

(b) Even though the true facts are subsequently made known to the buyer, the law is violated if the first contact or interview is secured by deception. [Guide 2]

No practice should be pursued by an advertiser, in the event of sale of the advertised product, of “unselling” with the intent and purpose of selling other merchandise in its stead. Among acts or practices which will be considered in determining if the initial sale was in good faith, and not a strategem to sell other merchandise, are:

(a) Accepting a deposit for the advertised product, then switching the purchaser to a higher-priced product,

(b) Failure to make delivery of the advertised product within a reasonable time or to make a refund,

(c) Disparagement by acts or words of the advertised product, or the disparagement of the guarantee, credit terms, availability of service, repairs, or in any other respect, in connection with it,

(d) The delivery of the advertised product which is defective, unusable or impractical for the purpose represented or implied in the advertisement. [Guide 4]

The Guides for the Advertising of Warranties and Guarantees are intended to help advertisers avoid unfair or deceptive practices in the advertising of warranties or guarantees. The Guides are based upon Commission cases, and reflect changes in circumstances brought about by the Magnuson-Moss Warranty Act (15 U.S.C. 2301 et seq.) and the FTC Rules promulgated pursuant to the Act (16 CFR parts 701 and 702). The Guides do not purport to anticipate all possible unfair or deceptive acts or practices in the advertising of warranties or guarantees and the Guides should not be interpreted to limit the Commission's authority to proceed against such acts or practices under section 5 of the Federal Trade Commission Act. The Commission may bring an action under section 5 against any advertiser who misrepresents the product or service offered, who misrepresents the terms or conditions of the warranty offered, or who employs other deceptive or unfair means.

Section 239.2 of the Guides applies only to advertisements for written warranties on consumer products, as “written warranty” and “consumer product” are defined in the Magnuson-Moss Warranty Act, 15 U.S.C. 2301, that are covered by the Rule on Pre-Sale Availability or Written Warranty Terms, 16 CFR part 702. The other sections of the Guides apply to the advertising of any warranty or guarantee.

(a) If an advertisement mentions a warranty or guarantee that is offered on the advertised product, the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, that prior to sale, at the place where the product is sold, prospective purchasers can see the written warranty or guarantee for complete details of the warranty coverage. 1

(b) If an advertisement in any catalogue, or in any other solicitation 2 for mail order sales or for telephone order sales mentions a warranty or guarantee that is offered on the advertised product, the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, that prospective purchasers can obtain complete details of the written warranty or guarantee free from the seller upon specific written request or from the catalogue or other solicitation (whichever is applicable).

(a) A seller or manufacturer should use the terms “Satisfaction Guarantee,” “Money Back Guarantee,” “Free Trial Offer,” or similar representations in advertising only if the seller or manufacturer, as the case may be, refunds the full purchase price of the advertised product at the purchaser's request.

(b) An advertisement that mentions a “Satisfaction Guarantee” or a similar representation should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, any material limitations or conditions that apply to the “Satisfaction Guarantee” or similar representation.

If an advertisement uses “lifetime,” “life,” or similar representations to describe the duration of a warranty or guarantee, then the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, the life to which the representation refers.

A seller or manufacturer should advertise that a product is warranted or guaranteed only if the seller or manufacturer, as the case may be, promptly and fully performs its obligations under the warranty or guarantee.

The purpose of these Guides is to provide assistance to businesses seeking to comply with sections 2 (d) and (e) of the Robinson-Patman Act (the “Act”). The guides are based on the language of the statute, the legislative history, administrative and court decisions, and the purposes of the Act. Although the Guides are consistent with the case law, the Commission has sought to provide guidance in some areas where no definitive guidance is provided by the case law. The Guides are what their name implies—guidelines for compliance with the law. They do not have the force of law.

Seller includes any person (manufacturer, wholesaler, distributor, etc.) who sells products for resale, with or without further processing. For example, selling candy to a retailer is a sale for resale without processing. Selling corn syrup to a candy manufacturer is a sale for resale with processing.

A customer is any person who buys for resale directly from the seller, or the seller's agent or broker. In addition, a “customer” is any buyer of the seller's product for resale who purchases from or through a wholesaler or other intermediate reseller. The word “customer” which is used in section 2(d) of the Act includes “purchaser” which is used in section 2(e).

Competing customers are all businesses that compete in the resale of the seller's products of like grade and quality at the same functional level of distribution regardless of whether they purchase directly from the seller or through some intermediary.

The term interstate commerce has not been precisely defined in the statute. In general, if there is any part of a business which is not wholly within one state (for example, sales or deliveries of products, their subsequent distribution or purchase, or delivery of supplies or raw materials), the business may be subject to sections 2(d) and 2(e) of the Act. (The commerce standard for sections 2 (d) and (e) is at least as inclusive as the commerce standard for section 2(a).) Sales or promotional offers within the District of Columbia and most United States possessions are also covered by the Act.

The terms services and facilities have not been exactly defined by the statute or in decisions. One requirement, however, is that the services or facilities be used primarily to promote the resale of the seller's product by the customer. Services or facilities that relate primarily to the original sale are covered by section 2(a). The following list provides some examples—the list is not exhaustive—of promotional services and facilities covered by sections 2 (d) and (e):

A seller who makes payments or furnishes services that come under the Act should do so according to a plan. If there are many competing customers to be considered or if the plan is complex, the seller would be well advised to put the plan in writing. What the plan should include is describe in more detail in the remainder of these Guides. Briefly, the plan should make payments or services functionally available to all competing customers on proportionally equal terms. (See § 240.9 of this part.) Alternative terms and conditions should be made available to customers who cannot, in a practical sense, take advantage of some of the plan's offerings. The seller should inform competing customers of the plans available to them, in time for them to decide whether to participate. (See § 240.10 of this part.)

(a) Promotional services and allowances should be made available to all competing customers on proportionally equal terms. No single way to do this is prescribed by law. Any method that treats competing customers on proportionally equal terms may be used. Generally, this can be done most easily by basing the payments made or the services furnished on the dollar volume or on the quantity of the product purchased during a specified period. However, other methods that result in proportionally equal allowances and services being offered to all competing customers are acceptable.

(b) When a seller offers more than one type of service, or payments for more than one type of service, all the services or payments should be offered on proportionally equal lterms. The seller may do this by offering all the payments or services at the same rate per unit or amount purchased. Thus, a seller might offer promotional allowances of up to 12 cents a case purchased for expenditures on either newspaper advertising or handbills.

(a) Functional availability:

(1) The seller should take reasonable steps to ensure that services and facilities are useable in a practical sense by all competing customers. This may require offering alternative terms and conditions under which customers can participate. When a seller provides alternatives in order to meet the availability requirement, it should take reasonable steps to ensure that the alternatives are proportionally equal, and the seller should inform competing customers of the various alternative plans.

(2) The seller should insure that promotional plans or alternatives offered to retailers do not bar any competing retailers from participation, whether they purchase directly from the seller or through a wholesaler or other intermediary.

(3) When a seller offers to competing customers alternative services or allowances that are proportionally equal and at least one such offer is useable in a practical sense by all competing customers, and refrains from taking steps to prevent customers from participating, it has satisfied its obligation to make services and allowances “functionally available” to all customers. Therefore, the failure of any customer to participate in the program does not place the seller in violation of the Act.

(b) Notice of available services and allowances: The seller has an obligation to take steps reasonably designed to provide notice to competing customers of the availability of promotional services and allowances. Such notification should include enough details of the offer in time to enable customers to make an informed judgment whether to participate. When some competing customers do not purchase directly from the seller, the seller must take steps reasonably designed to provide notice to such indirect customers. Acceptable notification may vary. The following is a non-exhaustive list of acceptable methods of notification:

(1) By providing direct notice to customers;

(2) When a promotion consists of providing retailers with display materials, by including the materials within the product shipping container;

(3) By including brochures describing the details of the offer in shipping containers;

(4) By providing information on shipping containers or product packages of the availability and essential features of an offer, identifying a specific source for further information;

(5) By placing at reasonable intervals in trade publications of general and widespread distribution announcements of the availability and essential features of promotional offers, identifying a specific source for further information; and

(6) If the competing customers belong to an identifiable group on a specific mailing list, by providing relevant information of promotional offers to customers on that list. For example, if a product is sold lawfully only under Government license (alcoholic beverages, etc.), the seller may inform only its customers holding licenses.

(c) A seller may contract with intermediaries or other third parties to provide notice. See § 240.11.

A seller may contract with intermediaries, such as wholesalers, distributors, or other third parties, to perform all or part of the seller's obligations under sections 2(d) and (e). The use of intermediaries does not relieve a seller of its responsibility to comply with the law. Therefore, in contracting with an intermediary, a seller should ensure that its obligations under the law are in fact fulfilled.

The seller should take reasonable precautions to see that the services the seller is paying for are furnished and that the seller is not overpaying for them. The customer should expend the allowance solely for the purpose for which it was given. If the seller knows or should know that what the seller is paying for or furnishing is not being properly used by some customers, the improper payments or services should be discontinued.

(a) Customer's liability: Sections 2 (d) and (e) apply to sellers and not to customers. However, the Commission may proceed under section 5 of the Federal Trade Commission Act against a customer who knows, or should know, that it is receiving a discriminatory price through services or allowances not made available on proportionally equal terms to its competitors engaged in the resale of a seller's product. Liability for knowingly receiving such a discrimination may result whether the discrimination takes place directly through payments or services, or indirectly through deductions from purchase invoices or other similar means.

(b) Third party liability: Third parties, such as advertising media, may violate section 5 of the Federal Trade Commission Act through double or fictitious rates or billing. An advertising medium, such as a newspaper, broadcast station, or printer of catalogues, that publishes a rate schedule containing fictitious rates (or rates that are not reasonably expected to be applicable to a representative number of advertisers), may violate section 5 if the customer uses such deceptive schedule or invoice for a claim for an advertising allowance, payment or credit greater than that to which it would be entitled under the seller's promotional offering. Similarly, an advertising medium that furnishes a customer with an invoice that does not reflect the customer's actual net advertising cost may violate section 5 if the customer uses the invoice to obtain larger payments than it is entitled to receive.

A seller charged with discrimination in violation of sections 2 (d) and (e) may defend its actions by showing that particular payments were made or services furnished in good faith to meet equally high payments or equivalent services offered or supplied by a competing seller. This defense is available with respect to payments or services offered on an area-wide basis, to those offered to new as well as old customers, and regardless of whether the discrimination has been caused by a decrease or an increase in the payments or services offered. A seller must reasonably believe that its offers are necessary to meet a competitor's offer.

It is no defense to a charge of unlawful discrimination in the payment of an allowance or the furnishing of a service for a seller to show that such payment or service could be justified through savings in the cost of manufacture, sale or delivery.

For the purpose of this part the following definitions shall apply:

(a) Industry product means a food for dogs or cats and includes all types of dry, semimoist, frozen, canned, and other commercial foods manufactured or marketed for consumption by domesticated dogs or cats. The term also includes special candy for such dogs and cats but does not include animal medicines or remedies.

(b) Industry member means a person, firm, corporation, or organization engaged in the importation, manufacture, sale or distribution of an industry product.

(c) Ingredients are the constituent materials making up a food for dogs or cats. Except as otherwise prescribed in this part the names and definitions of ingredients adopted by the Association of American Feed Control Officials will be used in the administration of this part, except that with respect to products which have been certified by the Department of Agriculture under the provisions of 9 CFR 355.1-355.42, the definitions set forth in those regulations will be used. [Guide 1]

Industry products and their respective ingredients should be identified and designated in accordance with the provisions of paragraph (c) of § 241.1 of this part, or if no name or definition has been established for an ingredient, it should be designated or identified by its common or usual name. The names of ingredients should not be used in advertising, labeling, brand or trade name, or otherwise, so as to misrepresent directly or by implication the identity of an ingredient or the composition of an industry product. [Guide 2]

Industry members should not use or cause or promote the use of any promotional materials, advertising, labels, insignia, brand or trade names which have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers:

(a) With respect to the composition, substance, content, identity, quantity, appearance, consistency, form, shape, color, flavor, cost, value, origin, grade, quality, suitability, nutritional properties, methods of manufacture, manner of processing, or novelty of an industry product or ingredient thereof; or

(b) In any other material respect. [Guide 3]

An industry member should not use on the label of an industry product a statement of identity, vignette, or any other representation, pictorial or otherwise, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to the composition, form, suitability, quality, color, or flavor of the product or any of its ingredients. More specifically:

(a) A label should contain sufficient information to enable a purchaser or prospective purchaser to determine the nature and composition of the product and the purposes for which it is suitable. As a prospective purchaser usually cannot ascertain by inspection whether an industry product will satisfy all of the nutritional requirements of a dog or cat, labeling respecting a product which is suitable only for particular purposes, e.g., as an intermittent or supplemental food, a special food for puppies, a protein supplement, or as a maintenance food for mature dogs, or is otherwise not a complete food, should not contain direct or implied representations which are misleading with respect to the purposes for which the product is suitable. To avoid misleading prospective purchasers in this respect it is generally necessary to disclose clearly and conspicuously the particular purposes for which the product is suitable or that the product is not a complete food.

(b) When used as part of a product name or statement of identity, the name of a particular ingredient should not be set forth in such a manner as to mislead prospective purchasers into believing that there is a greater proportion of such ingredient in the product than there is in fact. For example, if a product is composed of 80 percent meat byproducts and 15 percent beef, and 5 percent other ingredients, and is designated as “meat by-products and beef”, the word “beef” in the product name or statement of identity should not be more conspicuous than the words “meat by-products.” [Guide 4]

An industry member should not make any representation in an advertisement 1 which has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the composition, appearance, form, suitability or quality of an industry product or of any ingredient thereof. More specifically:

(a) A product should not be described in advertising as “all meat” or “100 percent meat,” or “all tuna,” or “all chicken,” or otherwise represented as being composed wholly of a named ingredient if it contains other ingredients such as the byproducts of meat, poultry, or fish. However, for the purpose of this provision, water sufficient for processing, required decharacterizing agents, and trace amounts of preservatives and condiments shall not be considered ingredients.

(b) The name or names of ingredients derived from animals, poultry or fish, such as “meat,” “beef,” “tuna,” or “chicken and eggs” should not be used as a complete description of the composition of an industry product unless the product contains at least 95 percent by weight of the named ingredient or combination of such ingredients. If the product contains more than one ingredient derived from animals, poultry, or fish, the name of a preferred ingredient should not be given precedence or undue prominence so as to create the impression that the product contains a greater amount of that ingredient than it does in fact. For example, if a product contains 70 percent eggs and 25 percent chicken it should be described as “eggs and chicken.”

(c) The names of ingredients derived from animals, poultry or fish or words or terms suggestive thereof, or representations that a product contains such ingredients, should not be used in advertising respecting an industry product unless the ingredients so named, represented, or suggested are present in the product in substantial amounts and the name, word, term, or representation is accompanied by a clear and conspicuous disclosure of the nature of the other ingredients contained in the product. The disclosure contemplated by this provision does not necessitate a complete listing of ingredients but only such description as is necessary to remove any likelihood of deception as to the general nature and composition of the product. However, no ingredient should be given undue emphasis so as to create the impression that it is present in the product in a larger amount than is the fact. This provision is not intended to preclude the use of such names or terms as descriptive of the flavor of a product which has the flavor represented and is immediately followed by the word “flavor” (see § 241.7 of this part), or to affect the use in advertising of product names or statements of identity which conform to the provisions of § 241.4 of this part. The following are examples of appropriate disclosures under this paragraph:

(1) “A meaty mixture of vegetables, cereals, and other nutritional ingredients.”

(2) “Contains cereals, vegetables, and meat.”

(d) Such terms as “stew,” “hash,” or other human food terms should not be used to describe an industry product or an ingredient thereof which is not so constituted as to conform to Federal standards of identity established for such foods. However, the specified percentages of meat, poultry, or fish ingredients may properly be composed of the named ingredient or of a combination of that ingredient and the parts of poultry or fish, or the byproducts of animals, poultry, or fish from which the ingredient was derived. For example, a product described as “Meat Stew for Dogs” should contain not less than 25 percent meat and meat byproducts, or a product described as “Chicken Stew for Dogs” should contain not less than 25 percent chicken and chicken parts, or a product described as “Pet Stew for Dogs” should contain not less than 25 percent meat and meat by-products, or poultry products, and a variety of vegetables and other nutritional ingredients.

(e) Representations that a product contains or is fortified with fresh eggs should not be made if the product in fact contains no fresh eggs or an inappreciable amount thereof, or only dried or powdered eggs or egg yolks or egg whites, or only such eggs as may be found in the carcasses of poultry.

(f) Representations that an industry product contains whole fresh milk should not be made if the product in fact contains reconstituted milk, skimmed milk, buttermilk, or dry powdered whole or skimmed milk.

(g) Representations that a product or an ingredient thereof is “moist in its own juices” or otherwise that the moisture therein is the natural juices contained in the product or ingredients should not be made if water or other liquids have been added thereto.

(h) Vignettes and graphic and pictorial illustrations of an industry product or the contents, ingredients on immediate container thereof, which have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to the appearance, substance, condition, or composition of the product or its ingredients should not be used. A pictorial or other depiction of a product which has the appearance of being composed entirely of meat or of other ingredients derived from animals, poultry or fish, but which in fact is not so composed, should be accompanied by a clear and conspicuous disclosure of the nature of the ingredients contained in the product.

(i) Terms such as “burger,” “chunk,” “patty,” “cubes,” “loaf,” “croquettes,” and others of similar import, should not be used to describe a product or an ingredient thereof which does not have substantially the shape or form so represented when it is sold to the retail purchaser. Terms denoting shape or form which also suggest ingredients derived from animals, poultry, or fish are subject to the provisions of this part relating to misrepresentation of content.

(j) The quality of an industry product from the nutritional standpoint is not necessarily dependent upon its meat content, or upon the amount or nature of other ingredients derived from animals, poultry or fish which it may contain. Accordingly, it is improper to represent that a dog or cat has a nutritional requirement for such an ingredient, or that solely because a particular industry product contains, for example, a specified percentage of meat it is nutritionally superior to products having a lesser quantity of meat, or to those which contain other and different ingredients. Such advertising is deceptive because it does not take into consideration the nutritional properties of various ingredients or combinations thereof used in the formulation and processing of industry products.

(k) Representations or claims by an industry member that a product is superior to other products from the standpoint of quality, composition, nutritional properties or method of manufacture should not be made unless the advertiser has established on the basis of accurate comparative analyses or scientifically valid tests that such is the fact. Comparatives such as “meatier,” “higher meat protein,” and “greater meat content” should not be used as descriptive of an industry product or an ingredient thereof without disclosing the basis of comparison, e.g., “meatier than our other products.”

(l) It is deceptive to offer for sale or sell an industry product which is not suitable for use as a food for dogs or cats. As a prospective purchaser usually cannot ascertain by inspection whether an industry product will satisfy all of the nutritional requirements of a dog or cat, advertising respecting a product which is suitable only for particular purposes, e.g., as an intermittent or supplemental food, a special food for puppies, a protein supplement, or as a maintenance food for mature dogs, or is otherwise not a complete food, should not contain direct or implied representations which are misleading with respect to the purposes for which the product is suitable. To avoid misleading prospective purchasers in this respect it is generally necessary to disclose clearly and conspicuously the particular purposes for which the product is suitable or that the product is not a complete food. This disclosure is especially necessary where in the absence thereof purchasers would be led by the advertising to believe that the product is nutritionally complete.

(m) Advertising should not contain any representation with respect to the identity, composition, or suitability of any industry product or an ingredient thereof, which contradicts, negates or is otherwise inconsistent with any representation, statement, direction for use, or other information which appears in the labeling of such a product.

(n) In advertisements pertaining to more than one of its products an industry member should use only such terms as are properly applicable to all of the products so advertised, unless the advertisement specifically identifies the particular products to which certain representations are applicable. For example, if “Y Company” has on the market an “all meat” product for dogs, an “all tuna” products for cats, and two separate, complete ration-type foods for dogs and cats respectively, it should not in a single advertisement represent that Y products are complete foods, or that they are “all meat.” [Guide 5]

An industry member should not misrepresent directly or indirectly, in advertising, the actual color of an industry product. More specifically, it should not represent that the color of a product is its natural color when such color has been established by artificial means; or that a product does not contain an artificial coloring ingredient unless this is true in fact; or that the color of a product is of any particular significance to a dog or to a cat. [Guide 6]

An industry member should not represent directly or indirectly, in advertising, that a product has a particular flavor unless the product has that flavor and the designated or named flavor is detectable by a recognized test method, or provides a characteristic distinguishable by the animal for which the product is intended. If the advertisement contains representations respecting flavor and the flavor has been derived from artificial sources that fact should be disclosed. [Guide 7]

An industry member should not represent directly or indirectly, in advertising, labeling, brand or tradename, or otherwise:

(a) That an industry product, or a recommended feeding thereof, is or meets the requisites of a complete, perfect, scientific, or balanced ration for dogs or cats unless such product or feeding:

(1) Contains ingredients in quantities sufficient to satisfy the estimated nutrient requirements established by a recognized authority on animal nutrition, such as The Committee on Animal Nutrition of the National Research Council of the National Academy of Sciences; or

(2) Contains a combination of ingredients which, when fed to a normal animal as the only source of nourishment, will provide satisfactorily for fertility of the male and female, gestation and lactation, normal growth from weaning to maturity without supplementary feeding and will maintain the normal weight of an adult animal whether working or at rest, and has had its capabilities in this regard demonstrated by adequate testing.

(b) That any listing of nutrients is equal to or exceeds the amounts recommended by a recognized authority on animal nutrition, such as the Committee on Animal Nutrition of the National Research Council of the National Academy of Sciences, unless such listing utilizes the same units of measure, and lists in equal or excess amounts all of the essential nutrients contained in the most recent nutrient list of that authority; or

(c) That a product or ingredient thereof contains vitamins, minerals, or other nutrients in excess of the actual content thereof, as for example, by comparing the vitamins, minerals, or other nutrients of a product or ingredient thereof with the nutrient content of a food deficient in such nutrients; or

(d) That any product or ingredient thereof provides “super protein richness,” or a complete source of protein in that it contains the essential body building amino acids, inferably in the proper amount and proportion for proper nutrition, when such is not the fact. [Guide 8]

An industry member should not misrepresent directly or indirectly, in advertising, labeling, brand or trade name or otherwise, that a product is fit for human consumption or made under the same sanitary conditions as food for humans. [Guide 10]

An industry member should not, in advertising, labeling or otherwise, misrepresent the methods used in the manufacture or processing of an industry product. More specifically: Representations that a product has been broiled, braised, baked, or otherwise cooked, preserved or processed in a specific manner should not be made unless such is the fact. As the word “canned” when applied to an industry product may constitute a representation as to the manner in which a product has been processed as well as to the nature of the container in which it is packaged, a product should not be described without qualification as “canned” unless it has been both thermally processed and packed in a can. [Guide 11]

An industry member should not directly or indirectly in advertising, labeling, or otherwise:

(a) Engage in the defamation of its competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by making other false representations about them; or

(b) Falsely disparage the quality, grade, origin, appearance, composition, suitability, nutritional properties, cost, value, type, consistency, form, color, flavor, method of manufacture, manner of preparation, or lack of novelty of its competitors' products. [Guide 12]

An industry member should not misrepresent directly or indirectly in company, brand or trade name, or in advertising, labeling, or otherwise:

(a) The length of time it has been in business; or

(b) The extent of its sales; or

(c) Its rank in the industry as a producer or distributor of a product or type of product; or

(d) That it is a manufacturer or packer of industry products; or

(e) That it owns or operates a laboratory, breeding or experimental kennel, or that its products have been tested in any particular manner or for any period of time or with any particular results; or

(f) That a product, ingredient, or manufacturing process is new or exclusive; or

(g) Any other material aspect of its business or products. [Guide 13]

An industry member should not deceptively represent directly or indirectly by endorsement, testimonial, award, advertising, labeling, brand or trade name, or otherwise:

(a) That a product or ingredient thereof has been prepared according to the formula, direction, or personal supervision of, or is prescribed by, or is the first choice of, or has been inspected, guaranteed, recognized, approved or used by; or meets or exceeds the specifications or standards of; or is otherwise endorsed by a particular individual or class of individuals, or by a governmental or nongovernmental agency, or by professionals such as veterinarians, chemists, physicists, or psychiatrists, or by organizations, breeders, kennels, sportsmen, hunt clubs, or animal hospitals; or

(b) That a product is the recipient of a bona fide merit award or seal of approval; or

(c) That a product or an ingredient thereof has been inspected by the U.S. Government or any agency thereof and that it has passed that inspection. [Guide 14]

An industry member should not offer for sale any industry product when the offer is not a bona fide effort to sell the product so offered as advertised and at the advertised price.

(a) An industry member should not represent in advertising or otherwise that a product is guaranteed without clear and conspicuous disclosure of:

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

(2) Any material conditions or limitations in the guarantee which are imposed by the guarantor; and

(3) The manner in which the guarantor will perform thereunder; and

(4) The identity of the guarantor. (The necessary disclosure requires that any guarantee made by the dealer or vendor which is not backed up by the manufacturer must make it clear that the guarantee is offered by the dealer or vendor only.)

(b) A seller or manufacturer should not advertise or represent that a product is guaranteed when he cannot or does not promptly and scrupulously fulfill his obligations under the guarantee.

(c) A specific example of refusal to perform obligations under the guarantee would arise in connection with the use of the phrase “Satisfaction or your money back” if the guarantor does not promptly make a full refund of the purchase price upon request, irrespective of the reason for such a request.

(d) This section has application not only to “guarantees” but also to “warranties,” to purported “guarantees” and “warranties,” and to any promise or representation in the nature of a “guarantee” or “warranty.”

An industry member should not 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 purchasers with respect to the price of any product offered for sale; or furnish any means or instrumentality by which others engaged in the sale of industry products may make any such representation.

For the purpose of this part the following definitions shall apply:

(a) Industry member. Any person, firm, corporation, or organization engaged in the manufacture, sale or distribution of industry products as such products are hereinafter defined.

(b) Industry products. Industry products include all products, whether of domestic or foreign origin, which are suitable for use as interior decorative wall panels. Industry products may be composed of any material or combinations of materials including, but not limited to, solid wood, plywood, wood products, plastics, metals, etc., and may be textured, prefinished, partially finished, or unfinished.

(c) Exposed surface, front or face. An “exposed surface” of a decorative wall panel is the one prominently exposed to view when the product is placed in the generally accepted position for use. The “exposed surface” is often referred to as the “front” or “face”, as contrasted to the back of a panel.

(d) Back. The back of a decorative wall panel is the surface reverse to the face. The back is not generally intended to provide an esthetically pleasing appearance and, therefore, is not considered an “exposed surface” under the definition immediately above. However, these definitions do not preclude unusual construction giving a panel two exposed surfaces or faces.

(e) Veneer. In this part, the term veneer is used in the sense most commonly understood by ordinary consumers—namely, to describe a thin layer of more valuable or beautiful wood used on the face of a panel for overlaying an inferior wood or other core material.

(a) In general. Industry members should not sell, offer for sale, or distribute industry products by any method, or under any representation, circumstance, or condition which has the capacity and tendency or effect of misleading purchasers or prospective purchasers as to the grade, type, kind, character, content, construction, composition, process, or technique used in preparation or fabrication, origin, size, thickness, quality, quantity, value, price, serviceability, resistance, performance, durability, color, finish, manufacture, or distribution of any product of the industry or component part of such product, or in any other respect.

(b) Basis for affirmative disclosures of facts. (1) Many of the following sections set forth specific examples as to when affirmative disclosures should be made in advertising and on labels. In order to prevent deception the Commission may require affirmative disclosure of material facts concerning merchandise which, if known to prospective purchasers, would influence their decisions of whether or not to purchase. The failure to disclose such facts as may be required is an unfair trade practice violative of the Federal Trade Commission Act.

(2) Two of the most prevalent situations in which disclosures should be made are (i) when the appearance of a wall panel could mislead purchasers or potential purchasers as to its true composition, and (ii) when a representation is made in any manner which is susceptible of at least one misleading interpretation unless it is clearly qualified. Representations which cannot be qualified without the qualification amounting to a contradiction should not be used.

(c) Manner of making disclosures on products and in advertising. (1) Retail dealers, manufacturers, and other suppliers must all assume the affirmative responsibility to provide detailed information to the public concerning the compositions of wall panels through informative advertising, promotional materials, and properly labeled products and samples thereof.

(2) When disclosures are necessary on industry products, they should appear on each product (except when sold and used for industrial purposes and the industrial purchaser is otherwise fully informed of the material facts involved). Such disclosures should be on the product, or on a tag or label attached thereto, and be of such permanency as to remain on, or attached to, the product until consummation of sale to the ultimate purchaser. Conspicuous disclosures may appear on backs of wall panels, but in instances where such disclosures would not be readily noticeable to casual observers, such as on certain point-of-sale display panels where the backs are not easily viewed, disclosures should be made on the front or face of panels.

(3) When disclosures are necessary in advertising, they should be made in any advertisement relating to an industry product irrespective of the form or media used whenever statements, representations or depictions appear therein which, in the absence of such disclosures, could serve to create a false impression that the product, or any part thereof, is of a certain kind, size, quality or composition.

(4) In all cases, disclosures should be in immediate conjunction with any representation, depiction, illustration, simulation, or display making it necessary, and should be of sufficient clarity and conspicuousness to be noted by prospective purchasers. The number of times a disclosure should be made will depend entirely upon the context in which it appears.

(5) When disclosures are necessary to describe composition, they may be accomplished by stating the true composition (e.g., “mahogany grained hardboard”, “walnut grain finish on plastic”, “reproduction of wood grain on plastic overlay” or “printed vinyl overlay on plywood”), or by making a disclaimer of composition (e.g., “imitation wood surface”, “simulated wood finish” or “simulated grain design”). Of course, a representation concerning the composition of a product should clearly indicate the part to which the representation is properly applicable.

In connection with the sale of industry products made of wood, or which are not wood but have an appearance simulating wood, industry members should not use any display, exhibit, sample, sales method, depiction or representation which could have the capacity and tendency directly or indirectly to mislead purchasers or potential purchasers because of: A false statement; a half-truth; or the failure to disclose facts concerning composition when the appearance of a product could convey a misleading impression. 1

(a) Examples of representations considered false include:

(1) Describing an oak panel as “pecan”;

(2) Describing as “solid birch” or “genuine birch” a panel made with laminations of all birch plies. Proper descriptions would include “birch plywood” or “birch plies”;

(3) Describing a particleboard, flakeboard, hardwood, fiberboard, chipcore or plywood panel as “solid wood”;

(4) Describing as “natural wood grain” a simulated grain design which has been printed on, attached to or simulated in any other manner on the surface of an industry product;

(5) Describing a nonlumber product, such as particleboard, hardboard, fiberboard, flakeboard, and products of similar composition, as “wood”. Although such products are composed of wood particles or wood fibers, they should not be represented without qualification as “wood” but may be described as “particleboard”, “hardboard”, “fiberboard”, “wood product”, or by any applicable nondeceptive word or term.

(b) Examples of representations considered likely to mislead because of a half-truth include:

(1) Describing as “walnut”, “in walnut”, “genuine walnut”, “walnut panel” or “walnut plywood” a panel having only a face veneer of walnut. Proper descriptions would include “walnut veneer face”, “walnut veneer surface”, “walnut veneer” or “walnut veneered plywood”.

(2) Describing as “walnut veneer” a panel having a face veneer not entirely of walnut. If a wood name is used to describe a panel having more than one kind of wood in the face veneer then all of the woods in the face veneers should be named or otherwise identified (e.g., “walnut and cherry veneers” or “walnut and other hardwood veneers”);

(3) Using unqualified phrases such as “wood-pattern” or “woodgrain finish” to describe a panel having a wood surface which has been stamped, rolled, pressed, or otherwise processed in such manner as to change the natural wood grain design. Proper descriptions would include “simulated woodgrain finish”, “imitation grain figure” or “simulated walnut grain finish on birch face veneer”;

(4) Describing as “hardwood plywood” a panel made of hardwood plywood but having a vinyl film surface simulating a wood finish. Proper descriptions would include “hardwood plywood with simulated wood grain on vinyl overlay” or “simulated wood surface on plywood”.

(c) Examples of failure to disclose facts concerning composition when the appearance of industry products could convey a misleading impression include circumstances such as when a product, or part thereof, is: Wood but has the appearance of a different kind of wood; and Not wood but has an appearance simulating wood. For instance, when necessary to prevent possible deception an affirmative disclosure should be made of the facts concerning composition when an industry product, or part thereof:

(1) Has an exposed surface of plastic, metal, vinyl, hardboard, particle-board or other material not possessing a natural wood grain structure but which has an appearance simulating that of a wood grain. Depending on the composition, proper descriptions would include “simulated walnut finish on plastic face”, “vinyl surface with simulated pecan finish”, “simulated birch finish on hardboard” “mahogany grained plastic”, or other nondeceptive phrases;

(2) Has a wood surface finished by means of staining, decalcomania, printing, paper coating or other process so as to have the appearance of a different kind of wood. Depending on the composition, proper descriptions would include “mahogany finished gum plywood”, “walnut stained plywood”, “walnut finish on pecan veneer face”, or “cherry grain design on hardwood plywood”;

(3) Has an appearance which could mislead potential purchasers in any material respect.

(d) Examples of wood names to describe color, grain design, etc.:

(1) When a wood name is used in advertising or labeling to describe the grain and/or color of a stain finish or other type of simulated finish which has been applied to a surface composed of something other than solid wood of the type named, it should be made clear that the wood name used is merely descriptive of the grain design and/or color or other simulated finish.

(2) Under this section, unqualified phrases such as “walnut”, “walnut finish”, “in walnut”, “fruitwood”, “oak”, “mahogany finish”, and other terms of similar import or meaning, will not be adequate. But statements such as “walnut stain”, “maple stain finish”, “mahogany finish on gum”, “photographically reproduced pecan grain”, “printed pecan design”, “fruitwood finish on selected hardwood veneer”, “cherry grain finish on vinyl overlay” and “walnut finish on other hardwoods” (or “softwoods”, as the case may be) will satisfy this provision if such statements are factually correct and appear in contexts which are otherwise nondeceptive. 2 [Guide 2]

Industry members should not use any direct or indirect representation concerning the identity of the wood in industry products that is false or likely to mislead purchasers as to the actual wood composition.

(a) Walnut. The unqualified term walnut should not be used to describe wood other than genuine solid walnut (genus Juglans). The term black walnut should be applied only to the species Juglans nigra.

(b) Mahogany. (1) The unqualified term mahogany should not be used to describe wood other than genuine solid mahogany (genus Swietenia of the Meliaceae family). The woods of genus Swietenia may be described by the term “mahogany” with or without a prefix designating the country or region of its origin, such as “Honduras mahogany”. “Costa Rican mahogany”. “Brazilian mahogany” or “Mexican mahogany”.

(2) The term “mahogany” may be used to describe solid wood of the genus Khaya of the Meliaceae family, but only when prefixed by the word “African” (e.g., “African mahogany”).

(3) In naming or designating the seven nonmahogany Philippine woods Tanguile, Red Lauan, White Lauan, Tiaong, Almon, Mayapis, and Bagtikan, the term “mahogany” may be used but only when prefixed by the word “Philippine” (e.g., “Philippine mahogany”), due to the long standing usage of that term. Examples of improper use of the term “mahogany” include reference to Red Lauan as “Lauan mahogany” or to White Lauan as “Blond Lauan mahogany”. Such woods, however, may be described as “Red Lauan” or “Lauan” or “White Lauan”, respectively. The term “Philippine mahogany” will be accepted as a name or designation of the seven woods named above. Such term shall not be applied to any other wood, whether or not grown on the Philippine Islands.

(4) The term “mahogany”, with or without qualifications, should not be used to describe any other wood except as provided above. This applies also to any of the woods belonging to the Meliaceae family, other than genera Swietenia and Khaya.

(c) Maple. The terms hard maple, rock maple, bird's-eye maple, Northern maple or other terms of similar nature should not be used to describe woods other than those known under the lumber trade names of Black Maple (Acer nigrum) and Sugar Maple (Acer saccharum).

Industry members should not misrepresent the composition of any industry product, or part thereof, or fail to disclose any material fact concerning the composition of an industry product when the failure to do so has the capacity and tendency or effect of deceiving purchasers or prospective purchasers. 3 For example:

(a) A hardboard panel having an imitation marble finish should not be described without qualification as “marble”, “onyx”, “travertine” or “travertine marble finish”. Proper descriptions would include “simulated marble finish”, “imitation marble-textured”, “marble pattern on plastic faced hardboard”, “simulated travertine on hardboard”, “marble pattern on vinylfaced hardboard” or other nondeceptive terms;

(b) A fiberboard panel having an imitation burlap finish should not be described without qualifications as “burlap” or “burlap finish”. Proper descriptions would include “imitation burlap weave finish”, “simulated burlap design on fiberboard”, “simulated burlap finish on fiberboard”, “burlap pattern on embossed vinyl surface” or other nondeceptive terms. [Guide 4]

Industry members should not use any picture, illustration, diagram or other depiction, either alone or in conjunction with words or phrases, which would have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers concerning any material fact relating to an industry product. For example, if an advertisement showed installed panels with the color and graining characteristic of walnut, but the paneling being offered was not genuine solid walnut, then the advertisement should contain a clear and conspicuous disclosure of the composition of the product being offered (e.g., “walnut veneer plywood”, “engraved walnut grain design on selected hardwood plywood”, or “simulated walnut finish on hardboard”). 3 [Guide 5]

Industry members should not use any trade name, product name, corporate name, coined name, trademark 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, composition, or origin of any industry product, or of any material used therein, or which is false or misleading in any other material respect. [Guide 6]

Industry members should not pass off the products of one industry member as and for those of another through the imitation or simulation of trademarks, trade names, brands, labels or otherwise. [Guide 7]

Industry products which are not of first quality should be legibly marked or labeled in a clear and conspicuous manner as “second”, “rejected”, “defective”, or “blemished”, as the case may be, or by some other term which clearly and conspicuously makes known to purchasers, or potential purchasers viewing the products, the fact that they are not of first quality. Also, such products should not be advertised in any manner without a clear and conspicuous disclosure that the products are not of first quality. Such disclosures should conform with provisions of paragraphs (b) and (c) of § 243.1 of this part. [Guide 8]

Industry members should not directly or indirectly misrepresent the manner in which the exposed surfaces of prefinished industry products may be washed, cleaned, or otherwise maintained, or fail to clearly and conspicuously disclose the manner in which exposed surfaces may be washed, cleaned, or otherwise maintained without adverse effects whenever representations are made concerning such matters. [Guide 9]

Industry members should not:

(a) Mark or otherwise represent, directly or by implication, an industry product as being of a certain size unless it has the dimensions represented; or

(b) Fail to disclose in advertising and on industry products the true size thereof when the failure to make such disclosure has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the size of such products. For example, consumers generally assume that decorative wall panels are 4′×8′×1/4″ when advertised without disclosure of dimensions. Therefore, if the dimensions of advertised panels are less than 4′×8′×1/4″, an affirmative disclosure of the correct size should be made. 5 [Guide 10]

Industry members should not:

(a) Remove, obliterate, deface, change, alter, conceal, or make illegible any information this part provides be disclosed on industry products, without replacing the same before sale, resale or distribution for sale with a proper mark or label meeting the provisions of this part; or

(b) Sell, resell, or distribute any industry product without its being marked or labeled and described in accordance with the provisions of this part. [Guide 11]

Members of the industry should not misrepresent in advertising, labeling, or otherwise, that any product conforms to any applicable standard or specification. [Guide 12]

(a) Industry members should not make any direct or indirect representation which is false or likely to mislead prospective purchasers concerning the origin of either domestic or foreign industry products, or any substantial parts thereof.

(b) Industry members should clearly and conspicuously disclose that industry products, or any substantial parts thereof, were produced or manufactured in an identified foreign country when the failure to make such disclosure has the capacity and tendency or effect of deceiving prospective purchasers. Such disclosures should be in the form of a legible mark, stamp or label on the product, and any samples thereof, and should be of such size, conspicuousness and permanency as to remain noticeable and legible upon casual inspection until consumer purchase. [Guide 13]

The Commission has adopted Guides Against Deceptive Pricing, part 233, Guides Against Deceptive Advertising of Guarantees, part 239, and Guides Against Bait Advertising, part 238, all of which have general application and furnish additional guidance for members of the Decorative Wall Paneling Industry. Members of this industry should comply with those parts.

For the purpose of this part the following definitions shall apply:

(a) The term watch means a timepiece or time-keeping device for measuring or indicating time which is designed to be worn on or about the person.

(b) The term watchcase or case means any metal case, covering, or housing of any quality or description for a watch as defined above and shall include the back, center, lugs, bezel, pendant, crown, bow, cap, and other parts thereof, including a watch band which has been permanently affixed thereto; and unless otherwise stated, either term as used in this part applies to the case whether marketed separately or together with the movement or works.

(c) The term accessories means products, other than watch bands, which are affixed to and sold in combination with watchcases or watches, such as, for example, bracelets, pins, pendants, brooches, or ornaments.

(d) The term mark means any letter, figure, numeral, symbol, sign, word, or term, or any combination thereof, which has been stamped, embossed, inscribed, or otherwise placed, on any industry product for the purpose of disclosing its metallic composition or any other material information.

(e) The term plate or plated means that a sheet or shell of metal has been applied by soldering, brazing, welding, or other mechanical means to the outer surfaces of foundation metal stock.

(f) The term electroplate or electroplated means that a coating of metal has been applied by the electrolytic method to the outer surfaces of foundation metal stock.

(g) The term industry product means a watch, watchcase, accessory or a part thereof.

(h) The term industry member means a person, firm, corporation, or organization engaged in the importation, manufacture, sale, or distribution of any industry product. [Guide 1]

Industry members should not use, or cause or promote the use of any promotional materials, advertising, labels, tags, marks, insignia, brand or trade names, depictions or packaging which bear, contain, or constitute representations which have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers:

(a) With respect to the grade, quality, estimated life, appearance, substance, size, construction, novelty, composition, accuracy, dependability, imperviousness, repairability, conformance to standards, or methods of manufacture, of industry products; or

(b) With respect to the country of origin of industry products or parts thereof; or

(c) In any other material respect. [Guide 2]

Industry members should not directly or indirectly, in advertising, marking, labeling, in a brand or trade name, or otherwise, misrepresent the metallic composition of a watchcase. With respect to cases having an exposed surface or surfaces which are, or have the appearance of being, metal, the metallic composition of the cases should be clearly and conspicuously disclosed in accordance with the methods and terminology set forth below:

(a) Exclusions. In determining the metallic composition of watchcases, parts which are necessarily required to be of steel or some other base metal may be excluded, namely, the springs, hinge pins for jointed cases, spring pins for straps or bands, separate inside movement holding rings, and crown cores.

(b) Gold. Watchcases which are not composed entirely of fine (24 karat) 1 gold should not be marked with the unqualified word “gold” or an abbreviation thereof.

(c) Gold alloy. Watchcases composed entirely of an alloy of gold of not less than 10 karat fineness 1 should be marked as “gold” or by an abbreviation thereof, and such word or abbreviation should be immediately preceded with a correct designation of the karat fineness 1 of the alloy, for example, “10 Karat Gold,” “14 Kt Gold,” “10 Kt.”

(d) Gold filled. Watchcases which have been plated by mechanical means with gold, or with an alloy of gold of not less than 10 karat fineness, 1 and the plating is of a thickness throughout of not less than three one-thousandths 2 of an inch after completion of all finishing operations, should be marked “Gold Filled”, or by an abbreviation thereof, and such term or abbreviation should be immediately preceded by a correct designation of the karat fineness 1 of the gold alloy of which the plating is composed, as, for example, “12 Karat Gold Filled”, “12 K.G.F.”

(e) Rolled gold plate. Watchcases which have been plated by mechanical means with gold, or with an alloy of gold of not less than 10 karat fineness, 1 and the plating is of a thickness throughout of not less than one and one-half one thousandths 2 of an inch upon completion of all finishing operations, should be marked “gold plate” or “rolled gold plate” or by an abbreviation thereof and such term or abbreviation should be immediately preceded by a correct designation of the karat fineness 1 of the gold alloy of which the plating is composed, as, for example, “10 Karat Gold Plate,” “10 Karat Rolled Gold Plate,” “10 K.R.G.P.”

(f) Gold electroplate. (1) Watchcases which have been electroplated with gold or with an alloy of gold of not less than 10 karat fineness, 1 to a thickness throughout of not less than three-fourths one thousandths 2 of an inch upon completion of all finishing operations and which can successfully withstand the tests set forth in paragraph 2 of the appendix, should be marked “gold electroplate” or “gold electroplated” and such term may be immediately preceded by a correct designation of the karat fineness 1 of the gold alloy of which such coating is composed, e.g., “16 Karat Gold Electroplate.” If the thickness of such gold electroplate is one and one-half one thousandths 2 of an inch or greater, it may be described as “Heavy Gold Electroplate,” and such term may be immediately preceded by a correct designation of the karat fineness 1 of the gold alloy of which such plating is composed. Gold electroplated products which satisfy the provisions in this paragraph may also be marked with an accurate disclosure of the actual thickness of the electroplate, e.g., “1/1000” gold electroplate.”

(2) Watches which have cases marked “gold electroplate” or “gold electroplated” in conformity with this section should, when sold to the ultimate consumer within the 18-month period immediately following the operative date of this section, be accompanied by an appropriate statement explaining the meaning of the marking and providing sufficient information to enable the consumer to make an informed judgment regarding the quality of the coating. The statement should not purport to compare the merits of electroplated coatings with the merits of coatings applied by other processes. The statement should be made on any point of sale material describing or referring to the watch and on a label or tag firmly affixed to the watch.

(g) Silver. Watchcases which are composed entirely of pure silver or of an alloy of silver of not less than nine-hundred twenty-five one thousandths fineness 1 should be marked as “silver,” “sterling” or “sterling silver” or by an abbreviation thereof. Cases which are composed entirely of a silver alloy of at least nine-hundred one thousandths fineness 1 should be marked “coin silver.”

(h) Silver plate. Watchcases which have been plated or electroplated with silver, should be marked as “silver plate” or “silver plated”, if after the completion of all finishing operations, such plating is of sufficient thickness to withstand normal use and last throughout the estimated life of the watch.

(i) Other precious metals. Watchcases which are composed in whole or in part of a precious metal other than gold or silver, or of an alloy of such a metal, or which have been plated or electroplated with such a metal or alloy thereof, should be marked so as to disclose the kind of precious metal or alloy so used and the manner of its use.

(j) Base metals. Watchcases or parts thereof which do not meet the minimum requirements set forth in paragraphs (b) through (i) of this section should be marked as “Base Metal” or so as to identify clearly the kind or kinds of metal of which they are composed, e.g., “Aluminum,” “Stainless Steel,” “Chromium Plated Steel,” and under these circumstances the mark should not contain the names of or abbreviations for any precious metal.

(k) Combination of metals. Watchcases which are composed of parts having different metallic compositions, should be marked in the manner prescribed in paragraphs (b) through (j) of this section with an accompanying explanation of the part or parts to which such markings or descriptions apply, e.g., “Base Metal Back,” “14 K Gold Filled Bezel.”

(l) Substantiality. A watchcase should not be composed of metals or alloys, or have coatings of either base metal or precious metals, which are not of sufficient thickness and substantiality as to render lasting and effective service, with due regard to the estimated life of the watch of which it is a part, unless the fact that such case will not render such service is clearly and conspicuously disclosed on a tag, label, or in other printed material which accompanies the watch when it is sold to the ultimate consumer.

(m) Placement of markings and abbreviations. All markings on watchcases as provided in this part should be of a permanent type and made on the exterior, exposed surface of the back, and be so placed and of such a size that they will be readily apparent to purchasers of the product. Provided that markings, respecting the metallic composition of watch bands which are part of the cases, may be placed on the bands or on the cases. All markings should be stated in the English language and printed in letters or figures of the same size and conspicuousness as that used for words or abbreviations descriptive of any precious metal content, i.e., “gold,” “silver,” or “karat”. When using abbreviations in markings as provided by this section, “G” may be used for the word “Gold,” “K” or “Kt” for the word “Karat,” and “Chr” for the word “Chromium”. In addition “G.F.” may be used for “Gold Filled,” and “R.G.P.” for “Rolled Gold Plate.” The terms “electroplate” and “electroplated” should not be abbreviated. The word “filled” and the word “plate” should not be abbreviated in marks containing the word “gold” unless the word “gold” is abbreviated by use of the letter “G”.

(n) Misuse of terms. The words “gold,” “karat,” “silver,” “sterling,” “coin,” or any abbreviation thereof either alone or in conjunction with other words such as “solid,” “plate,” “plated,” “filled,” “electroplate,” or “electroplated” or any abbreviation thereof should not be used as a marking or as descriptive of a watchcase or part thereof in labeling, advertising, trade names or otherwise in a manner inconsistent with the provisions of this section.

(o) Disclosures in advertising. All disclosures which are placed on industry products in conformity with this section should also appear in all advertising or other promotional material pertaining to such products, irrespective of the media used, whenever statements, representations, or depictions are made or appear therein, which in the absence of such disclosures serve to create a false impression that the products or parts thereof, are of a certain metallic composition. The disclosure so made should be of such conspicuousness and clarity as to be noted by purchasers and prospective purchasers casually reading, or listening to, such advertising, and the words and terms therein which are descriptive of metallic composition should not be used except as provided in this section. [Guide 3]

(a) Industry members should not misrepresent directly or indirectly, in advertising, other promotional material, labeling, brand or trade name, or marking, or otherwise, the ability of a product to withstand or resist damage or other harmful effects from stated causes. Illustratively, under this section a product should not be described or designated as “shockproof,” “waterproof,” “nonmagnetic,” or “all proof,” even if such term or terms are qualified by words or phrases, e.g., “waterproof when case, crown, and crystal are intact.” In addition a product should not be described or designated as “shock resistant,” “water resistant,” or “antimagnetic” unless it conforms to the applicable provisions set forth below:

(1) Shock resistant. A product may be properly described or designated as “shock resistant” or “shock absorbing” if it possesses a level of resistance to damage from shock sufficient to insure that it will successfully withstand the test described in paragraph 3 of the appendix to this part.

(2) Water resistant. An industry product may be properly described or designated as “water resistant” if it is sufficiently impervious to water or moisture so as to insure that at the time of its sale to the ultimate consumer it will successfully withstand the test described in paragraph 4 of the appendix to this part.

(3) Antimagnetic. A product may properly be described or designated as “antimagnetic” if it is so designed and constructed as to provide a substantial degree of protection against magnetism, and the product will successfully withstand the test described in paragraph 5 of the appendix to this part.

(b) Whenever a product described or designated as “shock resistant,” “water resistant,” or “antimagnetic” in conformity with this section is sold to the ultimate consumer, the designation should be accompanied by an appropriate statement explaining the meaning of the term and the care and maintenance ordinarily required to preserve the described qualities. The statement should be made on any point of sale material describing or referring to the watch having the designation in question and on a label or tag firmly affixed to the watch bearing the designation. [Guide 5]

Industry members should not misrepresent directly or indirectly, in advertising, labeling, marking, brand or trade name, or otherwise, the number of jewels contained in a watch, or that a watch is “jeweled” or that a watch contains a jeweled movement. Illustratively, industry members should not:

(a) Represent or describe a watch as “jeweled” or as containing a jeweled movement unless the watch movement contains at least seven jewels each of which serves the purpose of protecting against wear from friction by providing a mechanical contact with a moving part at a point of wear;

(b) Refer to the number of jewels contained in a watch unless each and every one of these jewels serves the purpose of protecting against wear from friction by providing a mechanical contact with a moving part at a point of wear. [Guide 6]

Industry members should not misrepresent directly or indirectly, in advertising, labeling, marking, brand or trade name, or otherwise, the composition, quality, or any other material fact respecting accessories. Illustratively, industry members should not, under this section: use terms, representations of metallic composition, words or names associated with precious, semiprecious, synthetic, and imitation stones, and quality marks in a manner inconsistent with the provisions of the Commission's Trade Practice Rules for the Jewelry Industry, promulgated June 28, 1957, and amended November 17, 1959. [Guide 7]

An industry product which in whole or in part is used, secondhand, rebuilt, repaired, refinished, or which contains parts that are used, secondhand, rebuilt, repaired or refinished, should not be sold, offered for sale or distributed unless the fact that such product or parts are not new, or are used, secondhand, rebuilt, or repaired, or refinished, is fully and nondeceptively disclosed in all advertising of the product, on the product itself or on a label firmly affixed thereto, and on the immediate container in which the product is sold to the ultimate consumer. [Guide 8]

Industry members should not imitate or simulate the trade names or trade-marks of competitors, or obliterate, conceal, or remove tags, labels, marks, or other disclosures placed on an industry product or on the package in which it is sold to the ultimate consumer under circumstances having the capacity and tendency of deceiving the ultimate consumer as to the identity of the manufacturer, origin of the product, or in any other material respect. [Guide 9]

(a) Watches having movements of foreign origin or movements which contain parts of foreign origin should not be offered for sale or sold unless they are accompanied by a clear and conspicuous disclosure of the country or countries of origin of the movement.

(b) The countries of origin of a watch movement are the country in which the movement has been assembled and the country in which its substantial and significant parts have been manufactured. For purposes of this section, if parts constituting 50 percent or more of the cost to the assembler of all the parts of the movement are manufactured in a single country, those parts shall be presumed to be the substantial and significant parts of the movement.

(1) If the movement has been assembled in the same foreign country in which parts constituting 50 percent or more of the cost to the assembler of all the parts of the movement have been manufactured, the name of that country alone should be used to designate the origin of the movement. Appropriate forms of disclosure would include “Swiss Made”, or “Japan”.

(2) If the watch movement has been assembled in one country and parts constituting 50 percent or more of the cost to the assembler of all the parts of the movement have been manufactured in a single other country, the names of both such countries, and no other, should be used to designate the origin of the movement. Appropriate forms of disclosure would include “Assembled in France from Swiss parts”, or “Japanese parts, assembled in the United States”.

(3) If the watch movement has been assembled in one country but parts constituting 50 percent or more of the cost to the assembler of all the parts of the movement have not been manufactured in a single other country, only the name of the country of assembly should be used, accompanied by a disclosure that the parts are partially foreign, imported or domestic, as the case may be. Appropriate forms of disclosure would include “Movement assembled in the United States from domestic and imported parts” or “Movements assembled in France from foreign parts” or “Assembled in Germany with parts from foreign countries”.

(4) For purposes of this section, the United States includes only the States, the District of Columbia, Puerto Rico, the American Virgin Islands, Guam and American Samoa.

(c) In making the disclosures under the circumstances set forth in paragraphs (b) (2) and (3) of this section, care should be exercised to insure that the form selected does not imply directly or indirectly that the movement is solely a product of the country from which its substantial and significant parts were obtained, or that it is solely a product of the country in which the movement was assembled.

(d) The disclosures provided for in this section should be permanently marked on an exposed surface of the watch or on a label or tag affixed thereto which has such a degree of permanency as to remain thereon until consummation of the consumer sale of the watch and be of such size and conspicuousness that they will be readily apparent to purchasers or prospective purchasers making a casual inspection of the watch. [Guide 10]

Members of the industry should not 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 purchasers with respect to the price of any product offered for sale; or furnish any means or instrumentality by which others engaged in the sale of industry products may make any such representation.

Members of the industry should not give, offer to give, or permit or cause to be given, directly or indirectly, money or anything of value to employees or agents of customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence or cause their employers or principals to purchase or contract to purchase the products of such industry members, or to refrain from purchasing products from competitors of such members. [Guide 12]

Members of the industry should not coerce a customer or prospective customer to purchase one or more products as a prerequisite to the purchase of one or more other products, where the effect may be substantially to lessen competition, or tend to create a monopoly or to unreasonably restrain trade. [Guide 13]

Industry members should not falsely represent, directly or indirectly, in company, brand, or trade name, or in advertising, labeling or otherwise:

(a) The length of time they have been in business;

(b) The extent of their sales;

(c) Their rank in the industry as producers or distributors of a product or type of product;

(d) That they are manufacturers of industry products or own or control a factory engaged in the manufacture of such products;

(e) That they own or operate a laboratory, or that their products have been tested in any particular manner or for any period of time, or with any particular results;

(f) That a product or manufacturing process is new or exclusive; or

(g) Any other material aspect of their business or products. [Guide 14]

(a) Industry members should not represent in advertising or otherwise that a product is “guaranteed” without clear and conspicuous disclosure in close conjunction with such representation of:

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

(2) Any material conditions or limitations in the guarantee which are imposed by the guarantor, and

(3) The manner in which the guarantor will perform thereunder, and

(4) The identity of the guarantor.

(b) A seller or manufacturer should not advertise or represent that a product is guaranteed when he cannot or does not promptly and scrupulously fulfill his obligations under the guarantee.

(c) A specific example of nonperformance of an obligation under the guarantee would arise in connection with the use of the phrase, “Satisfaction or your money back” if the guarantor does not promptly make a full refund of the purchase price upon request, irrespective of the reason for such request.

(d) Guarantees should not be used which under normal conditions are impractical of fulfillment or which are for such a period of time or are otherwise of such nature as to have the capacity and tendency of misleading purchasers or prospective purchasers into the belief that the product so guaranteed has a greater degree of serviceability, durability or performance capability in actual use than is true in fact.

(e) This section has application not only to “guarantees” but also to “warranties”, to purported “guarantees” and “warranties”, and to any promise or representation in the nature of a “guarantee” or “warranty.”

In connection with the sale, offering for sale, or distribution of industry products, industry members should not 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:

(a) 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:

(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 quantity, or (3) reduces the quantity or size thereof.

(a) In general. Industry members should not sell, offer for sale, or distribute any industry product under any representation or circumstance, including failure to disclose material facts, that has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to its utility, construction, composition, durability, design, style, quality, quantity or number of items, model, origin, manufacture, price, grade, or in any other material respect.

(b) Affirmative disclosures. Material facts concerning merchandise which, if known to prospective purchasers, would influence their decision of whether or not to purchase should be disclosed. This includes situations where deception may result from the appearance alone which in the absence of affirmative disclosures, could have the capacity and tendency or effect of misleading or deceiving. For example, veneered construction, use of plastic with simulated wood appearance, use of materials or products that simulate other materials or products used in the manufacture of furniture, or use of simulated finish or grain design, are considered to be material facts and a failure to disclose such information may be an unfair trade practice violative of section 5 of the Federal Trade Commission Act.

(1) Where disclosures should be made. Unless otherwise provided, any affirmative disclosure which should be made under this part, should be on the industry product, or on a tag or label prominently attached thereto, and should be of such permanency as to remain on or attached to the product until consummation of sale to the consumer. Also, affirmative disclosures should appear in all advertising relating to industry products, irrespective of the media used, whenever statements, representations or depictions are used which could create an impression that the furniture is of a certain construction or composition and which, in the absence of such disclosures, could have the capacity to mislead purchasers or prospective purchasers.

(2) The manner of disclosure. In all cases in which the disclosure is necessary, it should be made in close conjunction with the representation or depiction to be qualified and should be of sufficient clarity, conspicuousness, and audibility (when spoken), as to be noted by prospective purchasers. The number of times a disclosure should be made will depend entirely upon the format and context in which it appears. As a general proposition, in catalogs and brochures advertising a suite or line of furniture it will be sufficient to make appropriately conspicuous disclosures once at the outset; however, additional disclosures should be made on any page where additional descriptive words are used which should be qualified under this part.

(3) The form of disclosure with respect to composition. Whenever an affirmative disclosure regarding composition should be made under this part, it may be accomplished by either describing the true composition of the product or parts thereof (“plastic”, “vinyl”, “marble particles with binder”) or by stating that the material is not what it appears to be (“simulated wood”, “imitation leather”, “simulated marble”). Terms such as “molded components”, “walnut plastic” or “carved effect” will not suffice to disclose that exposed surfaces are plastic, or that they are not wood.

(4)(i) Trade names, coined names, trademarks, etc. suggestive of composition. Any trade name, coined name, trademark, depiction, symbol or other word or term which is susceptible of more than one interpretation, one or more of which could be misleading, should be immediately qualified to remove clearly and conspicuously the misleading implication(s). For instance, a trade name such as “Durahyde”, if used to describe a fabric-backed vinyl upholstery covering which simulates leather, should be immediately qualified to disclose (A) the true composition of the product (e.g., “fabric-backed vinyl”) or (B) that the product is not leather (e.g., “simulated leather”, “not leather” or “imitation leather”).

(ii) Trade designations or other representations which cannot be qualified without the qualification amounting to a contradiction should not be used. A trade designation consisting in whole or in part of a word which denotes a kind or type of material of which the product is not in fact composed should not be used. For example, the words “hide”, “skin” and “leather” should not be used in trade names denoting nonleather products, although homophones of those words such as “hyde” may be used if qualified as provided above. Similarly, the word “wood” should not be used in a trade name of a product which does not contain wood.

(iii) Also, ambiguous or imprecise trade designations will not be sufficient to satisfy the disclosure provisions of this part. For example, the coined name “Hardiclad” used to describe molded plastic drawer fronts having the appearance of wood, is not sufficient to disclose that such parts are plastic or that they are not wood.

(c) Illustrative examples of affirmative disclosure of composition or appearance. The following examples are among those which, if factually correct, will meet the provisions of this section with respect to affirmative disclosures:

(1) Disclosure of veneered construction. “Veneered construction”, “[wood name] solids and veneers”, “[wood name] veneered tops, fronts and end panels” or “[wood name] veneered 5-ply construction with solid parts of [wood name]”;

(2) Disclosure of the use of plastics or other materials having the appearance of wood. “High impact polystyrene”, “door panels of polystyrene”, “legs of rigid polyurethane”, “walnut grained plastic tops”, “parts of the exposed surfaces are of simulated wood” (to describe minor parts of the exposed surfaces of furniture), “imitation wood”, “carved effects of simulated wood”, “simulated wood components”, “wood grained vinyl veneer”, “walnut grained hardboard” or “simulated wood effect on plastic”;

(3) Simulated leather, slate, or marble. “Vinyl”, “leather look on vinyl”, “simulated leather”, “slate effect on plastic tops”, “simulated slate”, “simulated marble” or “marble dust and polyester binder”;

(4) Simulated wood grain design. “Simulated wood grain design”, “cherry grained maple”, “simulated mahogany crotch on mahogany veneer”, “Simulated Carpathian Elm burl” or “engraved cathedral walnut grain on hardboard”;

(5) Simulated carvings. “Carved effect in plastic”, “simulated wood carvings” or “molded polystyrene with carved look”;

(6) Hang tags or labels disclosing the use of veneers, plastic simulating wood, or simulated wood grain. “Veneered construction, heat and stain resistant plastic tops, drawer fronts and decorative parts of rigid polyurethane”, or “This furniture is made of selected hardwoods and veneers with matching plastic tops and decorative carved effects of polystyrene in dark oak finish”, or “This suite is constructed of selected walnut veneers and solid pecan, and has simulated wood panels on drawers, doors, and headboards”, or “Walnut veneer end panels and tops, polystyrene drawer and door fronts, and selected solid hardwood”, or “This furniture is constructed of selected handwood solids and veneers, with certain veneered surfaces having simulated grain finish to enhance their appearance” or “Solid and Veneered hardwoods with carved effects in simulated wood and simulated grain design on veneered tops in matching pecan finish”.

(d) Removal of tags or labels. Members of the industry should not:

(1) Remove, obliterate, deface, change, alter, conceal, or make illegible any information this part provides be disclosed on industry products, such as on tags or labels attached thereto, without replacing the same with a proper disclosure meeting the provisions of this part before offering for sale, sale, or distribution; or

(2) Sell, resell, distribute, or offer for sale an industry product without it being marked, tagged, or labeled and described in accordance with the provisions of this part. [Guide 1]

(a) Solid wood construction. Industry members should not use unqualified wood names to describe furniture unless all of the exposed surfaces are constructed of solid wood of the type named. If more than one type of solid wood is used and one of the woods is named, then all of the principal woods should be disclosed, or the extent of the use of the wood named should be indicated. In lieu of naming the specific woods, a general designation of the type of wood, such as “hardwood” or “softwood” may be used. For example, the following representations, if factually correct, will be acceptable: “solid maple”, “solid African mahogany”, “walnut and pecan”, “solid oak fronts”, “walnut”, “maple and other selected hardwoods”, “fine hardwoods” and “selected hardwoods”.

(b) Wood veneers. (1) When the exposed surfaces of furniture are of veneered and solid construction, and wood names are used to describe such furniture, the wood names should be qualified to disclose the fact of veneered construction. For example, “walnut solids and veneers” or “mahogany veneered construction” may be used when all the exposed surfaces of furniture are constructed of solid and veneered wood of the type named. When such terms as “walnut veneered construction” or “oak veneered construction” are used, it is understood that the exposed solid parts are composed of the same wood.

(2) When solid parts of furniture are of woods other than those used in veneered surfaces, either the use of such other woods should be disclosed or the location of the veneers stated. Examples: “walnut veneers and pecan solids”, “mahogany veneers and African mahogany solids”, “walnut veneered tops, fronts and end panels”, “table tops of mahogany veneers” or “cherry veneers and selected solid hardwoods”.

(c) Wood products. Wood names or names suggesting wood should not be used to refer to materials which, while produced from wood particles or fibers, do not possess a natural wood growth structure. Such materials, however, may be referred to by their generally accepted names, if otherwise nondeceptive, such as “hardboard”, “particleboard”, “chipcore” or “fiberboard”, or may be referred to as “wood products”.

(d) Color or grain design finish. When wood names are used merely to describe a color of a stain finish and/or grain design or other simulated finish applied to the exposed surfaces of furniture that is composed of something other than solid wood of the types named, it must be made clear that the wood names are merely descriptive of the color and/or grain design or other simulated finish. Terms such as “walnut finish” or “fruitwood finish” will not suffice. However, terms such as “walnut color”, “fruitwood stain finish”, “maple finish on birch solids and veneers”, “walnut finish on walnut veneers and selected solid hardwoods”, “cherry grained maple drawer fronts”, “walnut finish plastic top” or “maple stained hardwoods” will be considered acceptable when factually correct and in contexts otherwise nondeceptive.

(e) Materials simulating wood. No wood names should be used to describe any materials simulating wood without disclosures making it clear that the wood names used are merely descriptive of the color and/or grain design or other simulated finish; nor should any trade names or coined names be employed which may suggest that such materials are some kind of wood. [Guide 2]

Industry members should not use any direct or indirect representation concerning the identity of the wood in industry products that is false or likely to mislead purchasers as to the actual wood composition.

(a) Walnut. The unqualified term walnut should not be used to describe wood other than genuine solid walnut (genus Juglans). The term black walnut should be applied only to the species Juglans nigra.

(b) Mahogany. (1) The unqualified term mahogany should not be used to describe wood other than genuine solid mahogany (genus Swietenia of the Meliaceae family). The woods of genus Swietenia may be described by the term “mahogany” with or without a prefix designating the country or region of its origin, such as “Honduras mahogany”, “Costa Rican mahogany”, “Brazilian mahogany” or “Mexican mahogany”.

(2) The term “mahogany” may be used to describe solid wood of the genus Khaya of the Meliaceae family, but only when prefixed by the word “African” (e.g., “African mahogany desk”).

(3) In naming or designating the seven non-mahogany Philippine woods Tanguile, Red Lauan, White Lauan, Tiaong, Almon, Mayapis, and Bagtikan, the term “mahogany” may be used but only when prefixed by the word “Philippine” (e.g., “Philippine mahogany table”), due to the long standing usage of that term. Examples of improper use of the term “mahogany” include reference to Red Lauan as “Lauan mahogany” or to White Lauan as “Blond Lauan mahogany”. Such woods, however, may be described as “Red Lauan” or “Lauan” or “White Lauan”, respectively. The term “Philippine mahogany” will be accepted as a name or designation of the seven woods named above. Such term shall not be applied to any other wood, whether or not grown on the Philippine Islands.

(4) The term “mahogany”, with or without qualifications, should not be used to describe any other wood except as provided above. This applies also to any of the woods belonging to the Meliaceae family, other than genera Swietenia and Khaya.

(c) Maple. The terms “hard maple”, “rock maple”, “bird's-eye maple”, “Northern maple” or other terms of similar nature should not be used to describe woods other than those known under the lumber trade names of Black Maple (Acer nigrum) and Sugar Maple (Acer saccharum).

(a) Members of the industry should not make any direct or indirect representation concerning furniture or parts thereof covered with leather, or other material which simulates leather, which is false or misleading.

(b) Practices which should not be used under this section include, but are not limited to, the use of any trade name, coined name, trademark, 1 or other word or term, or any depiction or device, which could have the capacity and tendency or effect of misleading prospective purchasers into believing that furniture is covered in whole or in part with the skin or hide of an animal, or that the covering of furniture is leather, top grain leather, or split leather, when such is not the case. When a furniture covering is made from ground, shredded, pulverized or powdered leather, industry members should affirmatively disclose, in a manner provided for under § 250.1 of this part, either the true composition thereof, or the fact that it is not leather.

(c) In the case of non-leather material having the appearance of leather, industry members should conspicuously disclose facts concerning the composition thereof either by identifying the composition of the product (e.g., “vinyl covering”, “fabric-backed vinyl”, “upholstered in plastic”) or by a disclosure that the product is not leather (e.g., “imitation leather”, “not leather”), as provided for under § 250.1 of this part. [Guide 4]

(a) In connection with the sale of furniture, members of the industry should not use any direct or indirect representation concerning the outer covering thereof which:

(1) Is false (e.g., using the term Mohair to describe a fabric not produced from fibers derived from the angora goat); or

(2) Has the capacity and tendency or effect of deceiving furniture purchasers (e.g., by telling a half-truth, such as using the unqualified word “Nylon” to describe a blend of nylon and other fibers).

(b) When (if) any identifying reference is made in advertising to an outer covering made of a mixture of different kinds of fibers, each constituent fiber present in substantial quantity (at least 5 percent) should be designated in the order of its predominance by weight (e.g., “cotton and nylon”) in a manner provided for in § 250.1 of this part. If a fiber so designated is not present in a substantial quantity (less than 5 percent) the percentage thereof should be stated (e.g., “cotton, rayon, 3 percent nylon”).

(c) When (if) any identifying reference is made on a tag or label to an outer covering made of a mixture of different kinds of fibers; each and every kind of fiber present in such outer covering should be identified by showing the fiber content with percentages of the respective fibers in order of their predominance by weight (e.g., “55 percent Cotton, 45 percent Rayon”). In the case of pile fabrics, identification of the fiber content should be made on a tag or label by stating:

(1) The fiber content of the face or pile and of the back or base, with percentages of the respective fibers in order of their predominance by weight and the respective percentages of the face and back showing the ratio between face and back (e.g., “Face 60 percent Rayon, 40 percent Nylon—Back 100 percent Cotton; Back constitutes 80 percent of fabric and face 20 percent”); or

(2) The percentages of the fibers of the face or pile and the back or base in relation to the total weight of the fabric (e.g., “40 percent Cotton, 40 percent Rayon, 20 percent Nylon” to describe a fabric having an all nylon pile constituting 20 percent of the total weight backed by a 50 percent—50 percent blend of cotton and rayon).

(d) No representation should be made, directly or by implification, that an upholstery fabric has been tested unless:

(1) Actual tests have been conducted by persons qualified to perform and evaluate tests on upholstery fabrics; and

(2) Such tests were devised and conducted so as to constitute a reasonable basis for evaluating the fabric for use as a furniture covering; and

(3) Such representation is accompanied by a conspicuous and accurate statement, in layman's language, of the actual test results. (See Note following paragraph (e) of this section.)

(e) No direct or indirect representation should be made concerning any performance characteristic of any upholstery fabric unless at the time such representation is made the advertiser has in his possession a reasonable basis therefor, which may consist of competent scientific tests and/or other appropriate substantiating materials.

Members of the industry should not make any direct or indirect representation relating to the stuffing of furniture which:

(a) Is false (e.g., describing cotton stuffing as “wool”, or urethane foam as “latex foam rubber”): or

(b) Has the capacity and tendency or effect of deceiving or misleading (e.g., by telling a half-truth, such as describing shredded or flaked foam rubber stuffing as “foam rubber” without disclosing, in a manner provided for under § 250.1 of this part, that it is shredded or flaked, or describing any non-latex foam cushion as “foam” without disclosing the kind of foam used, such as “urethane foam”).

(1) The unqualified terms “Foam”, “Latex” or “Latex Foam Rubber” or other terms of similar import, should not be used as descriptive of any part of the filling of an upholstery which does not consist of one or more homogeneous pads of latex foam rubber.

(2) When an upholstered industry product contains filling material consisting of a top layer of homogeneous latex foam rubber, or of other type of stuffing which is of substantial thickness, and another layer or layers of other material, terms such as “latex foam rubber”, “polyurethane foam” or other terms which accurately describe the composition of such top layer may be used as descriptive thereof, provided, however, That in immediate conjunction therewith, nondeceptive disclosure is made of the fact that only a part of such filling material is of latex foam rubber or such other type of designated stuffing.

(3) When the filling is composed, in whole or in part, of latex foam rubber, polyurethane foam, or other type of stuffing which has been shredded, flaked, or ground, full and nondeceptive disclosure should be made of such fact in immediate conjunction with any such term irrespective of whether the pieces or shreds of latex foam rubber, polyurethane foam, or other type of stuffing are in loose form or are held together by glue or some other adhesive agent.

(a) Industry members should not make any direct or indirect representation which is false or likely to deceive prospective purchasers of furniture as to its origin, either domestic or foreign. For example:

(1) Furniture manufactured in the United States should not be unqualifiedly described as “Danish”, “Spanish”, “Italian”, “English”, or by any other unqualified terms suggesting foreign origin, unless the fact that such furniture was manufactured in the United States is clearly and conspicuously disclosed in advertising and on the furniture by means of such statements as “Made in U.S.A.” or “manufactured by” followed by the name and address of the domestic manufacturer.

(2) When appropriate, furniture may be described by such terms as “Danish Style”, “Italian Design”, “Spanish Influence”, “English Tradition” or by any other terms accurately descriptive of a generally recognized furniture style.

(3) Because of general understanding by the furniture buying public, terms such as “French Provincial”, “Italian Provincial”, “Chinese Chippendale” and “Mediterranean” are considered to have acquired a secondary meaning as descriptive of the styles of furniture so described. Thus, unqualified use of such terminology, when appropriate, would not be considered deceptive.

(4) Furniture should not be represented by trade name or otherwise as being manufactured in the Grand Rapids (Michigan) area, or in any other furniture producing area, when such is not the fact.

(b) In connection with the sale of furniture of foreign manufacture, members of the industry should clearly and conspicuously disclose the foreign country of origin, when the failure to make such disclosure has the capacity and tendency or effect of deceiving purchasers of such products. The disclosure of foreign origin, when required, should be in the form of a legible marking, stamping, or labeling on the outside of the furniture, and shall be of such size, conspicuousness and degree of permanency, as to be and remain noticeable and legible upon casual inspection until consumer purchase. [Guide 7]

(a) Industry members should not make any direct or indirect representation that an industry product is new unless such product has not been used and is composed entirely of unused materials and parts.

(b) In connection with the sale of furniture which has the appearance of being new but which contains used materials or parts, such as springs, latex foam rubber stuffing, or hardware, members of the industry should conspicuously disclose, in a manner provided for in § 250.1 of this part, such fact (e.g., “cushions made from reused shredded latex foam rubber”).

(a) Representations that furniture is a “floor sample”, “demonstration piece”, etc., should not be used to describe “trade-in”, repossessed, rented, or any furniture except that displayed for inspection by prospective purchasers at the place of sale for the purpose of determining their preference and its suitability for their use.

(b) Furniture should not be described as “discontinued” or “discontinued model” unless the manufacturer has in fact discontinued its manufacture or the industry member offering it for sale will discontinue offering it entirely after clearance of his existing inventories of furniture so described. [Guide 9]

Members of the industry should not mislead or deceive purchasers by passing off the products of one industry member as and for those of another through the imitation or simulation of trademarks, trade names, brands, or labels. [Guide 10]

Members of the industry should not represent, directly or by implication, in advertising or otherwise, that they produce or manufacture products of the industry, or that they own or control a factory making such products, when such is not the fact, or that they are a manufacturer, wholesale distributor or a wholesaler when such is not the fact, or in any other manner misrepresent the character, extent, or type of their business. [Guide 11]

Members of the industry should not give, or offer to give, or permit or cause to be given, directly or indirectly, 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. [Guide 12]

The Commission has adopted Guides Against Deceptive Pricing, part 233, Guides Against Deceptive Advertising of Guarantees, part 239, and Guides Against Bait Advertising, part 238, all of which have general application and furnish additional guidance for members of the Household Furniture Industry. Members of this industry should comply with those parts.

(a) General. (1) The offer of “Free” merchandise or service is a promotional device frequently used to attract customers. Providing such merchandise or service with the purchase of some other article or service has often been found to be a useful and valuable marketing tool.

(2) Because the purchasing public continually searches for the best buy, and regards the offer of “Free” merchandise or service to be a special bargain, all such offers must be made with extreme care so as to avoid any possibility that consumers will be misled or deceived. Representative of the language frequently used in such offers are “Free”, “Buy 1-Get 1 Free”, “2-for-1 Sale”, “50% off with purchase of Two”, “1¢ Sale”, etc. (Related representations that raise many of the same questions include “__ Cents-Off”, “Half-Price Sale”, “1/2 Off”, etc. See the Commission's “Fair Packaging and Labeling Regulation Regarding ‘Cents-Off’ and Guides Against Deceptive Pricing.”)

(b) Meaning of “Free”. (1) The public understands that, except in the case of introductory offers in connection with the sale of a product or service (See paragraph (f) of this section), an offer of “Free” merchandise or service is based upon a regular price for the merchandise or service which must be purchased by consumers in order to avail themselves of that which is represented to be “Free”. In other words, when the purchaser is told that an article is “Free” to him if another article is purchased, the word “Free” indicates that he is paying nothing for that article and no more than the regular price for the other. Thus, a purchaser has a right to believe that the merchant will not directly and immediately recover, in whole or in part, the cost of the free merchandise or service by marking up the price of the article which must be purchased, by the substitution of inferior merchandise or service, or otherwise.

(2) The term regular when used with the term price, means the price, in the same quantity, quality and with the same service, at which the seller or advertiser of the product or service has openly and actively sold the product or service in the geographic market or trade area in which he is making a “Free” or similar offer in the most recent and regular course of business, for a reasonably substantial period of time, i.e., a 30-day period. For consumer products or services which fluctuate in price, the “regular” price shall be the lowest price at which any substantial sales were made during the aforesaid 30-day period. Except in the case of introductory offers, if no substantial sales were made, in fact, at the “regular” price, a “Free” or similar offer would not be proper.

(c) Disclosure of conditions. When making “Free” or similar offers all the terms, conditions and obligations upon which receipt and retention of the “Free” item are contingent should be set forth clearly and conspicuously at the outset of the offer so as to leave no reasonable probability that the terms of the offer might be misunderstood. Stated differently, all of the terms, conditions and obligations should appear in close conjunction with the offer of “Free” merchandise or service. For example, disclosure of the terms of the offer set forth in a footnote of an advertisement to which reference is made by an asterisk or other symbol placed next to the offer, is not regarded as making disclosure at the outset. However, mere notice of the existence of a “Free” offer on the main display panel of a label or package is not precluded provided that (1) the notice does not constitute an offer or identify the item being offered “Free”, (2) the notice informs the customer of the location, elsewhere on the package or label, where the disclosures required by this section may be found, (3) no purchase or other such material affirmative act is required in order to discover the terms and conditions of the offer, and (4) the notice and the offer are not otherwise deceptive.

(d) Supplier's responsibilities. Nothing in this section should be construed as authorizing or condoning the illegal setting or policing of retail prices by a supplier. However, if the supplier knows, or should know, that a “Free” offer he is promoting is not being passed on by a reseller, or otherwise is being used by a reseller as an instrumentality for deception, it is improper for the supplier to continue to offer the product as promoted to such reseller. He should take appropriate steps to bring an end to the deception, inlcuding the withdrawal of the “Free” offer.

(e) Resellers' participation in supplier's offers. Prior to advertising a “Free” promotion, a supplier should offer the product as promoted to all competing resellers as provided for in the Commission's “Guides for Advertising Allowances and Other Merchandising Payments and Services.” In advertising the “Free” promotion, the supplier should identify those areas in which the offer is not available if the advertising is likely to be seen in such areas, and should clearly state that it is available only through participating resellers, indicating the extent of participation by the use of such terms as “some”, “all”, “a majority”, or “a few”, as the case may be.

(f) Introductory offers. (1) No “Free” offer should be made in connection with the introduction of a new product or service offered for sale at a specified price unless the offeror expects, in good faith, to discontinue the offer after a limited time and to commence selling the product or service promoted, separately, at the same price at which it was promoted with the “Free” offer.

(2) In such offers, no representation may be made that the price is for one item and that the other is “Free” unless the offeror expects, in good faith, to discontinue the offer after a limited time and to commence selling the product or service promoted, separately, at the same price at which it was promoted with a “Free” offer.

(g) Negotiated sales. If a product or service usually is sold at a price arrived at through bargaining, rather than at a regular price, it is improper to represent that another product or service is being offered “Free” with the sale. The same representation is also improper where there may be a regular price, but where other material factors such as quantity, quality, or size are arrived at through bargaining.

(h) Frequency of offers. So that a “Free” offer will be special and meaningful, a single size of a product or a single kind of service should not be advertised with a “Free” offer in a trade area for more than 6 months in any 12-month period. At least 30 days should elapse before another such offer is promoted in the same trade area. No more than three such offers should be made in the same area in any 12-month period. In such period, the offeror's sale in that area of the product in the size promoted with a “Free” offer should not exceed 50 percent of the total volume of his sales of the product, in the same size, in the area.

(i) Similar terms. Offers of “Free” merchandise or services which may be deceptive for failure to meet the provisions of this section may not be corrected by the substitution of such similar words and terms as “gift”, “given without charge”, “bonus”, or other words or terms which tend to convey the impression to the consuming public that an article of merchandise or service is “Free”.

(a) An industry product should not be labeled, advertised, or otherwise represented in any manner which may have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers concerning its filling material, covering, composition, quality, processing, testing, manufacture, durability, size, weight, maintenance, cleanliness, construction, warmth, moisture resistance, color, guarantee, origin, price, or any other feature of such product.

(b) Coverings of industry products should be labeled in accordance with the requirements of the Textile Fiber Products Identification Act and the Wool Products Labeling Act. [Guide 2]

A trade name, symbol, depiction, or any other kind of representation, should not be used in labeling, in advertising, or in any other kind of promotion relating to an industry product, when such representation has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers into believing that the product is composed:

(a) In whole or in part of feathers and down, or feathers, or down, when such is not the fact; or

(b) In whole or in part of feathers or down from a particular type of fowl when such is not the fact; or

(c) That the product has been given chemical treatment to improve its physical or chemical properties when such is not the fact. [Guide 3]

(a) The term Tan-O-Quil-QM or any words or phrases suggestive thereof should not be used in any labeling or advertising respecting an industry product in any manner which may have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers into believing that the product or any of its filling material has been treated by the Tan-O-Quil-QM process unless in fact all of the filling material in that product has been treated by the Tan-O-Quil-QM process developed by the Clothing and Organic Materials Laboratory, U.S. Army Natick Laboratories, Natick, Mass., in accordance with applicable U.S. Government specifications (this process is described in Technical Report 69-37-CM, “Tan-O-Quil-QM Treatment for Feathers and Down,” dated August 1968).

(b) When the Tan-O-Quil-QM treatment has been applied to all of the filling materials contained in an industry product, the term “Tan-O-Quil-QM” may be used on the label, and the label should include a statement that the product has been so treated in accordance with the applicable U.S. Government specification showing the number thereof. [Guide 4]

(a) Labeling. An industry product should be labeled as to the kind or type of filling material contained therein and when the filling material consists of a mixture of more than one kind or type, then the proportion of each should be disclosed in the order of predominance, the largest proportion first.

(b) Advertising. Disclosure of the kind or type of filling material contained in an industry product need not be made in advertising unless in the absence of disclosure a purchaser or prospective purchaser may likely be deceived. Thus, if advertising contains any representation, whether affirmative or implied, concerning the nature of the filling material, then disclosure should be made in accordance with paragraph (a) of this section.

(c) Bulk stocks. Invoices pertaining to bulk stocks of processed feathers and down should disclose the kind or type of feathers and down contained therein, and if more than one kind or type is contained in the bulk stock then the proportion of each should be disclosed in the order of predominance, the largest proportion first.

(d) Manner and form of disclosures. The disclosures described in paragraphs (a), (b), and (c) of this section should be made in accordance with the following instructions.

(1) Disclosures with respect to the kind or type of feathers and down by use of any of the terms listed and defined above will be considered proper provided such products conform to the definitions set forth for such term, except that if the term nonwaterfowl or landfowl is used, it should be accompanied by the name of the fowl from which the products were obtained, e.g., “chicken” or “turkey.”

(2) Disclosures made in accordance with this part should be clear and conspicuous, and labels bearing such disclosures should be attached to the product with sufficient permanency so as to remain thereon until after sale to the ultimate purchaser.

(3) The proportion or percentage of a particular kind or type of feathers or down in an industry product should be determined by the relationship between the avoirdupois weight that the particular kind or type bears to the total avoirdupois weight of the filling material in the product. [Guide 5]

(a) Down products. The term down may be used to designate any industry product containing the following filling material:

(b) Waterfowl feather products. The term waterfowl feathers may be used to designate any plumage product containing the following filling material which is free of quill and crushed feathers:

(c) Percentage claims. An industry member should not misrepresent directly or indirectly the percentage of down contained in an industry product. Illustratively,

(1) A product should not be designated as “100 percent down,” “all down,” “pure down,” or by other terms of similar import unless it in fact contains only down without regard to the tolerance set forth in this section.

(2) A product should not be represented to contain a certain percentage of feathers or down unless it in fact contains the stated percentage with due regard to the tolerances set forth in this section.

(d) Designation of species. An industry product may be designated by the name of a waterfowl species if a minimum of 90 percent of the waterfowl plumage contained therein is of that species.

(e) Testing. Tests to determine the composition of the filling material in an industry product should be conducted in accordance with Federal Standard 148a, dated December 10, 1964, entitled “Classification, Identification, and Testing of Feather Filling Material.”

(f) Adulteration. The tolerances set forth in this section are not to be construed to permit intentional adulteration. [Guide 6]

An industry product which contains crushed feathers should be labeled with a clear and conspicuous disclosure of that fact. A crushed feather product should not contain residue in excess of 5 percent of the weight of the crushed feathers contained therein. [Guide 7]

An industry product which contains damaged feathers in an amount in excess of 2 percent of the total weight of the filling material should be labeled with a clear and conspicuous disclosure that it contains damaged feathers. [Guide 8]

(a) An industry product which contains any filling material which has previously been used should not be offered for sale unless a clear and conspicuous disclosure of that fact is made on the label thereof and in all advertising and invoices relating to such product.

(b) In making the disclosure referred to in paragraph (a) of this section the term secondhand may be used. However, such terms as reworked, reprocessed, or terms of similar import should not be used unless they are accompanied by a clear and conspicuous statement that such material is not new or has previously been used. [Guide 9]

(a) An industry product which contains filling materials which have not been cleaned so as to meet the standard set forth in paragraph (b) of this section should not be offered for sale or sold.

(b) A test such as that reflected in Federal Standard 148a, dated December 10, 1964, entitled “Classification, Identification, and Testing of Feather Filling Material,” should be used to determine whether feathers and down have been properly cleaned. Feather and down material having an oxygen number exceeding 20 grams of oxygen per 100,000 grams of sample should be presumed not to have been properly cleaned. [Guide 10]

(a) Sleeping bags. The sizes of sleeping bags should be disclosed by labeling and such sizes should be expressed in terms of the finished length and width measurements of the bag in inches qualified by the words “Finished Size”. If any representation of the “Cut Size” or the dimension of the materials used in the construction of sleeping bags, are made in labeling, advertising, marking, or otherwise, the provisions of the Commission's Trade Regulation Rule on the “Advertising and Labeling as to Size of Sleeping Bags” should be followed (see part 400 of this chapter).

(b) Comforters, etc. The sizes of comforters and other similar industry products should be disclosed by labeling and such sizes should be expressed in terms of the finished length and width measurements in inches exclusive of any fringe ornamentation.

(c) Pillows, cushions, etc. The sizes of pillows, cushions, and other similar industry products, when disclosed by labeling, should be expressed in terms of finished measurements in inches qualified by the words “Finished Size.” This statement may be followed in parentheses by a notation of product measurement in inches prior to finishing, such parenthetical expression to include the phrase “Cut Size.” Thus, an example of proper size marking when a pillow has a finished size of 21″×27″ and a cut size of 22″×28″, and disclosure is made of the cut size, would be:

(a) Industry member. Any person, firm, corporation, or organization engaged in the operation of a privately owned school which offers resident or correspondence courses or training or instruction purporting to prepare or qualify individuals for employment in any occupation or trade or in work requiring mechanical, technical, artistic, business, or clerical skills or which is for the purpose of enabling a person to improve his appearance, social aptitude, personality, or other attributes is considered to be an industry member. However, the term industry member shall not include resident primary or secondary schools or institutions of higher education which offer at least a 2-year program of accredited college level studies for resident students which is generally acceptable for credit toward a bachelor's degree.

(b) Accredited. For the purpose of this part the term accredited means that a course or school to which the term is applied has been evaluated and found to meet established criteria by an accrediting agency or association recognized by the U.S. Commissioner of Education of the U.S. Department of Health, Education, and Welfare, as reliable authority as to the quality of the training offered.

(c) Approved. For the purpose of this part, the term approved means that a school or course has been recognized by a State or Federal agency as meeting educational standards or other related qualifications as prescribed by that agency for the school or course to which the term is applied. It is not and should not be used interchangeably with “accredited,” and the term “approved” is not justified by the mere grant of a corporate charter to operate or license to do business as a school and should not be used unless the represented “approval” has in fact been affirmatively required or authorized by State or Federal law. [Guide 1]

(a) An industry member should not use any trade or business name, label, insignia, or designation which has the capacity and tendency or effect of misleading or deceiving prospective students, or student with respect to the nature of the school, its accreditation, programs of instruction or methods of teaching, or any other material fact.

(b) An industry member should not falsely represent directly or indirectly by the use of a trade or business name or in any other manner that:

(1) It is a part of or connected with a branch, bureau, or agency of the U.S. Government, or of any State, or civil service commission;

(2) It is an employment agency or that it is an employment agent or authorized training facility for another industry or member of such industry, or otherwise deceptively conceal the fact that it is a school.

(c) If an industry member conducts its instruction wholly by correspondence or home study, a clear and conspicuous disclosure should be made in immediate conjunction with its trade or business name that it is a correspondence or home study school. An industry member which offers both resident and correspondence or home study instruction should clearly and conspicuously identify in all advertisements and promotional materials, except in those pertaining solely to its resident program, the programs or courses to be offered in whole or in part by correspondence or home study. [Guide 2]

(a) An industry member should not misrepresent directly or indirectly the extent or nature of any approval its school may have received from a State agency or the extent or nature of its accreditation by a nationally recognized accrediting agency, or association. Illustratively, an industry member should not:

(1) Unqualifiedly represent that its school is accredited unless all of its programs of instruction have in fact been accredited by an accrediting agency recognized by the U.S. Commissioner of Education of the U.S. Department of Health, Education, and Welfare. If an accredited school offers courses or programs of instruction which have not been accredited, all advertisements or promotional materials pertaining to such courses or programs should contain a clear and conspicuous disclosure that they are not accredited if any reference is made in the advertisements or promotional materials to the accreditation of the school.

(2) Represent that its school or a course is approved, unless the nature, extent, and purpose of that approval are disclosed.

(3) Represent that students successfully completing a course or program of instruction may transfer credit therefor to an accredited institution of higher education unless such is the fact.

(b) An industry member should not represent that a course of instruction has been approved by a particular industry, or that successful completion thereof qualifies the student for admission to a labor union or similar organization, or for the receipt of a State or Federal license to perform certain functions, unless such is the fact.

(c) An industry member should not represent that its courses are recommended by vocational counselors, high schools, colleges, educational organizations, employment agencies, or members or officials of a particular industry, or that it has been the subject of unsolicited testimonials or endorsements from former students or anyone else unless such is the fact. Testimo-nials or endorsements which do not accurately reflect current practices of the school, or current conditions or employment opportunities in the industry or occupation to which the training pertains, should not be used. [Guide 3]

(a) An industry member should not misrepresent directly or indirectly in its advertising, promotional materials, or in any manner the size, location, facilities, or equipment of its school or the number or educational qualifications of its faculty and other personnel. Illustratively, an industry member should not:

(1) Use or refer to fictional organization divisions or position titles or make any representation which has the tendency or capacity to mislead or deceive students or prospective students, as to the size or importance of the school, its divisions, faculty, personnel, or officials, or in any other material respect.

(2) Misrepresent directly or indirectly the size, importance, location, facilities, or equipment of the school through use of photographs, illustrations, or any other depictions in catalogs, advertisements, or other promotional materials. For example, photographs or illustrations which purport to show school equipment should not be used if the school does not use such equipment in the conduct of its courses.

(3) Represent that the school owns, operates, or supervises a dormitory, eating, or other living accommodations unless such is the fact.

(4) Falsely or deceptively represent the location or locations at which its courses will be conducted.

(5) Misrepresent the nature, or efficacy, of its courses, training devices, methods or equipment or the number, qualifications, training, or experience of its faculty or personnel, whether by means of endorsements or otherwise.

(6) Falsely represent that it will provide or arrange for part or full-time employment while the student is undergoing instruction; or misrepresent in any manner, directly or by implication, the availability of such employment or any other form of financial assistance.

(7) Deceptively represent the nature of any relationship which the school or any of its officers, employees, or instructors may have with the U.S. Government or any of its agencies or any agency of a State or local government, or that by virtue of such a relationship or any prior relationship its students will receive preferred consideration in obtaining employment with such a government or any of its agencies.

(8) Represent directly or indirectly that certain individuals or classes of individuals are bona fide working members of its faculty, or are members of its advisory board, or have played an active part in the preparation of its instruction materials, unless such is the fact, or misrepresent in any manner, directly or by implication, the extent or nature of the association of any person with the school or the courses offered.

(9) Misrepresent the nature and extent of any personal instruction, guidance, assistance, or other attention it will provide for its students either during a course or after completion of a course.

(b) An industry member should not represent directly or indirectly that it is a nonprofit organization unless such is the fact.

(c) An industry member should not falsely represent that it is affiliated with or otherwise connected with a public or private religious or charitable organization.

(d) An industry member should not falsely or deceptively represent that a course has been recently revised, or that it has a revision system or service, or misrepresent in any manner, its facilities, procedures, or ability to keep a course current. [Guide 4]

(a) An industry member should not misrepresent the nature or extent of any prerequisites it has established for enrollment in a course or program of instruction. For example, it should not:

(1) Represent that a course is available only to those having a high school diploma or other specific educational qualifications, unless the sale of such a course is limited to persons possessing generally acceptable evidence of such a diploma or educational qualifications.

(2) Represent that only those who make an acceptable grade or complete successfully a certain test or examination will be admitted, if in fact enrollments are not thus limited.

(3) Falsely represent that it will accept for enrollment only a limited number of persons or a limited number of persons from a certain geographical area.

(4) Falsely represent that applications for enrollment will be considered for only a limited period of time, or that they must be submitted by a certain date.

(b) An industry member should not falsely represent that the lack of a high school education or prior training or experience is not a handicap or impediment to successful completion of a course.

(c) An industry member should endeavor to establish the qualifications which an applicant should have to assimilate successfully the subject matter of the course. Applicants should be informed of these prerequisites, and those who are not so qualified should not be enrolled. [Guide 5]

(a) An industry member should not issue a degree, diploma, certificate of completion, or any document of similar import, which misrepresents directly or indirectly the subject matter, substance or content of the course of study or any other material fact concerning the course for which it was awarded or the accomplishments of the student to whom its was awarded.

(b) An industry member should not offer or confer an academic, professional, or occupational degree, if the award of such degree has not been authorized by the appropriate State educational agency or approved by a nationally recognized accrediting agency, unless it clearly and conspicuously discloses in all advertising and promotional materials which contain a reference to such degree that its award has not been authorized or approved by such an agency.

(c) An industry member should not offer or confer a high school diploma unless the program of instruction to which it pertains is substantially equivalent to that offered by a resident secondary school, and unless the student is informed by means of a clear and conspicuous disclosure in writing prior to his enrollment, that the industry member cannot guarantee or otherwise control the recognition which will be accorded the diploma by institutions of higher education, other schools or by prospective employers, and that the degree to which it is recognized is a matter solely within the discretion of those agencies. [Guide 6]

(a) In obtaining leads to prospective students, an industry member should not use advertisements or promotional material which is classified, designated or captioned, “Men wanted to train for * * *”, “Help Wanted”, “Employment”, “Business Opportunities” or by words or terms of similar import, so as to represent directly or by implication that employment is being offered.

(b) An industry member should not deceptively designate or refer to its sales representatives as “registrars”, “counselors”, “advisors”, or by words of similar import or misrepresent in any other manner, the titles, qualifications, training, experience or status of its salesmen, agents, employees, or other representatives.

(c) The advertising or promotional materials of an industry member which are used to provide leads to prospective students should include the full name and address of the school (a local address is permissible in the case of a multilocational school) and disclose the fact that it is a school if such is not apparent from its name. In addition, a person who responds to such an advertisement or promotional material should not be visited by a salesman unless the advertisement or material contains a clear and conspicuous disclosure that a salesman may call or unless consent to such a visit is first obtained by mail or telephone.

(d) In obtaining leads to prospective students, an industry member should not represent that it is conducting a talent hunt, contest, or similar test, unless such is the fact and such representation is accompanied by a clear and conspicuous disclosure of the industry member's name and address and the fact that it is a school if such is not apparent from its name. An industry member which conducts a talent hunt, contest, or similar test among prospective students should keep accurate records concerning the results thereof. [Guide 7]

(a) An industry member should not represent directly or indirectly in advertising or otherwise that a course or courses may be taken for a specified price, or at a saving, or at a reduced price, when such is not the fact; or otherwise deceive students or prospective students with respect to the cost of a course or any equipment, books, or supplies associated therewith or furnish any means or instrumentality by which others engaged in obtaining enrollments may make such representations. Illustratively, an industry member should not represent:

(1) That veterans or other stated classes of persons may be enrolled at a reduced or special rate unless such is the fact;

(2) That a specific amount is its usual and customary price for a course unless such amount is the price at which the course has been usually and customarily sold in the recent regular course of business;

(3) That any saving is afforded in the price of a course from the member's regular price unless the price at which the course is offered constitutes a reduction from the price at which the course has been usually and customarily sold in the recent regular course of business;

(4) That books, training materials, or training aids are furnished at reduced rates,

(i) Unless the prices therefor have been reduced from the prices at which they were usually and customarily sold by the member in the recent and regular course of business; or

(ii) Unless the prices therefor have been reduced from the prices at which they were usually and customarily sold at retail by principal outlets in the trade area.

(b) An industry member should not misrepresent the total cost of the course to a prospective student or falsely represent that it offers scholarships which pay for all or part of the course.

(c) An industry member which represents that any course material, training device, or service is free should comply with the provisions of the Commission's Guide Concerning Use of the Word “Free” and Similar Representations (part 251 of this chapter). [Guide 8]

(a) An industry member should not use any deceptive representations or deceptive means to collect or attempt to collect tuition or other charges from its students. For example, an industry member should not represent that a delinquent account has been or will be referred to an independent collection agency or to an attorney unless such is the fact.

(b) An industry member should not seek to enforce or obtain a judgment or otherwise attempt to collect on any contract or other instrument between itself and a student, or transfer or assign such contract or other instrument to a third party for the purpose of collection or of enforcing or obtaining a judgment on said contract or instrument, if the member or its employees or representatives misrepresented the nature or the terms of said contract or instrument at the time or prior to the time the contract or instrument was signed.

Before obtaining the signature of a prospective student or of his parent or guardian on an enrollment contract or contract of sale, an industry member should furnish in writing to that person or persons the following information:

(a) The member's policy and regulations relative to make-up work, delay or delinquency in meeting course requirements, and standards required of the student for achieving satisfactory progress, including class attendance if applicable.

(b) If the member recommends, suggests, or requires that the student have or secure any additional texts, equipment, or materials other than usual student supplies such as paper and pencils, or utilize any supplementary services offered by the member, and the cost thereof is not included in the contract price of the course, an itemized list of such items and services showing the price thereof.

(c) In the case of courses to be taught in residence, a description of the school's physical facilities, and equipment to be used in teaching the class, and the usual class size.

(d) If the member represents that it offers a placement service to its graduates or will otherwise secure or assist them to find employment, a detailed and explicit description of the extent and nature of this service or assistance.

(e) Any other material facts concerning the school and the program of instruction or course which are reasonably likely to affect the decision of the student to enroll therein. [Guide 10]

(a) The Commission intends to treat endorsements and testimonials identically in the context of its enforcement of the Federal Trade Commission Act and for purposes of this part. The term endorsements is therefore generally used hereinafter to cover both terms and situations.

(b) For purposes of this part, an endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) which message consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group or institution.

(c) For purposes of this part, the term product includes any product, service, company or industry.

(d) For purposes of this part, an expert is an individual, group or institution possessing, as a result of experience, study or training, knowledge of a particular subject, which knowledge is superior to that generally acquired by ordinary individuals.

(a) Endorsements must always reflect the honest opinions, findings, beliefs, or experience of the endorser. Furthermore, they may not contain any representations which would be deceptive, or could not be substantiated if made directly by the advertiser. [See Example 2 to Guide 3 (§ 255.3) illustrating that a valid endorsement may constitute all or part of an advertiser's substantiation.]

(b) The endorsement message need not be phrased in the exact words of the endorser, unless the advertisement affirmatively so represents. However, the endorsement may neither be presented out of context nor reworded so as to distort in any way the endorser's opinion or experience with the product. An advertiser may use an endorsement of an expert or celebrity only as long as it has good reason to believe that the endorser continues to subscribe to the views presented. An advertiser may satisfy this obligation by securing the endorser's views at reasonable intervals where reasonableness will be determined by such factors as new information on the performance or effectiveness of the product, a material alteration in the product, changes in the performance of competitors' products, and the advertiser's contract commitments.

(c) In particular, where the advertisement represents that the endorser uses the endorsed product, then the endorser must have been a bona fide user of it at the time the endorsement was given, Additionally, the advertiser may continue to run the advertisement only so long as he has good reason to believe that the endorser remains a bona fide user of the product. [See § 255.1(b) regarding the “good reason to believe” requirement.]

(a) An advertisement employing an endorsement reflecting the experience of an individual or a group of consumers on a central or key attribute of the product or service will be interpreted as representing that the endorser's experience is representative of what consumers will generally achieve with the advertised product in actual, albeit variable, conditions of use. Therefore, unless the advertiser possesses and relies upon adequate substantiation for this representation, the advertisement should either clearly and conspicuously disclose what the generally expected performance would be in the depicted circumstances or clearly and conspicuously disclose the limited applicability of the endorser's experience to what consumers may generally expect to achieve. The Commission's position regarding the acceptance of disclaimers or disclosures is described in the preamble to these Guides published in the Federal Register on January 18, 1980.

(b) Advertisements presenting endorsements by what are represented, directly or by implication, to be “actual consumers” should utilize actual consumers, in both the audio and video or clearly and conspicuously disclose that the persons in such advertisements are not actual consumers of the advertised product.

(c) Claims concerning the efficacy of any drug or device as defined in the Federal Trade Commission Act, 15 U.S.C. 55, shall not be made in lay endorsements unless (1) the advertiser has adequate scientific substantiation for such claims and (2) the claims are not inconsistent with any determination that has been made by the Food and Drug Administration with respect to the drug or device that is the subject of the claim.

(a) Whenever an advertisement represents, directly or by implication, that the endorser is an expert with respect to the endorsement message, then the endorser's qualifications must in fact give him the expertise that he is represented as possessing with respect to the endorsement.

(b) While the expert may, in endorsing a product, take into account factors not within his expertise (e.g., matters of taste or price), his endorsement must be supported by an actual exercise of his expertise in evaluating product features or characteristics with respect to which he is expert and which are both relevant to an ordinary consumer's use of or experience with the product and also are available to the ordinary consumer. This evaluation must have included an examination or testing of the product at least as extensive as someone with the same degree of expertise would normally need to conduct in order to support the conclusions presented in the endorsement. Where, and to the extent that, the advertisement implies that the endorsement was based upon a comparison such comparison must have been included in his evaluation; and as a result of such comparison, he must have concluded that, with respect to those features on which he is expert and which are relevant and available to an ordinary consumer, the endorsed product is at least equal overall to the competitors' products. Moreover, where the net impression created by the endorsement is that the advertised product is superior to other products with respect to any such feature or features, then the expert must in fact have found such superiority.

Endorsements by organizations, especially expert ones, are viewed as representing the judgment of a group whose collective experience exceeds that of any individual member, and whose judgments are generally free of the sort of subjective factors which vary from individual to individual. Therefore an organization's endorsement must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organization. Moreover, if an organization is represented as being expert, then, in conjunction with a proper exercise of its expertise in evaluating the product under § 255.3 of this part (Expert endorsements), it must utilize an expert or experts recognized as such by the organization or standards previously adopted by the organization and suitable for judging the relevant merits of such products.

Direct-mail promotional materials 1 or oral representations soliciting the sale of specific industry products should clearly and conspicuously disclose:

(a) Name and address of publisher;

(b) Full title including any sub-titles, and edition name or number if not the first;

(c) Surname and given name or initials of authors, editors or compilers or designate if authored, edited or compiled by publisher's editorial staff;

(d) Latest copyright date and whether supplemented; or in the event of a looseleaf or post-bound (compression-type) publication, other appropriate identification of currency (latest copyright date not necessary for open-ended, ongoing type works such as reports and digests);

(e) In the case of a reprint by other than the original publisher, the publisher and copyright date of the original work, name and address of the reprint publisher and reprint dates;

(f) Whether part of a set or series and, if so, the full title of said set or series;

(g) Where the title of the advertised industry product is general, when in fact coverage therein is more limited than the title implies, a synoptic description of the limited coverage of subject matter, except in cases where chapter headings are listed and adequately reflect the limited subject matter;

(h) Type of binding (e.g., permanently bound with pocket parts, looseleaf including post-bound, compression-binder type or paperback);

(i) Where the price of the industry product appears, a description of what the price includes (e.g., the number of volumes in a set) and whether there are any extra charges such as postage, handling, shipping or other surcharges. [Guide 1]

Direct mail promotional materials or oral representations soliciting the sale of specific industry products should, where an industry product is being supplemented, or supplementation is being contemplated, clearly and conspicuously disclose:

(a) The general type of supplementation currently being supplied, a description of what is included in that supplementation (e.g., pocket part supplements [bound, unbound or pamphlet type], replacement pages, cumulative supplements, revised volumes, split volumes, replacement volumes), and the anticipated frequency of supplementation (e.g., annually or monthly);

(b) Any charge for the latest pocket parts or supplements, and the clearly identified period of time within which supplementation will be supplied without additional charge;

(c) The specific nature of any offer of credit or discount for supplements in connection with the original purchase, and the clearly identified period of time for said offer;

(d) Whether supplementation to the industry product has been abandoned, or is knowingly to be abandoned within 1 year after issuance of the solicitation, and the date or approximate date for abandonment of supplementation;

(e) Minimum supplementation cost for each of the past 2 calendar years, or such shorter period in which the publication has been available. [Guide 2]

Direct-mail promotional materials or oral representations soliciting the sale of specific texts and treatises should clearly and conspicuously disclose:

(a) For a multivolume set the number or estimated number of volumes which are anticipated to complete the set, and the estimated publication schedule;

(b) Where offer is of a set, a general description of subjects covered under said set title;

Where a publisher sells an industry product whose replacement or substantial revision is scheduled to be offered for sale within 1 year following the date of sale of the precursor work, such publisher should notify the purchaser, prior to consummating the sale, that the industry product will be replaced or revised and the approximate date of such replacement or revision. If the purchaser has not been so notified, the publisher should offer to the purchaser either:

(a) Full refund for the obsolete work within the 1 year period, less reasonable charges for the period of use of the work, or

(b) Full credit on the obsolete work within the 1 year period towards purchase of the new work, less reasonable charges for the period of use of the obsolete work.

No direct-mail promotional materials or oral representations soliciting the sale of specific industry products should:

(a) Expressly or impliedly represent that the industry product is new when said industry product was first distributed more than 18 months prior to the time of the offer or dissemination of the advertisement (some examples, but not all inclusive, of terms suggesting new publications are: “Announcing”, “newly revised”, “New 8th Edition”, “Up-to-date”, “New”);

(b) Represent an industry product as current or up-to-date unless the work itself, or the supplementation thereto, is current or up-to-date, considering the amount and nature of legal activity in the particular area of law covered on the date of issuance of the advertisement; but in no event should any representation be made that the industry product is current or up-to-date when either the copyright date, printing date or end of coverage date for supplementation of such industry product is more than 18 months from the date of issuance of the advertisement.

Direct-mail promotional materials or oral representations soliciting the sale of specific texts or treatises should clearly and conspicuously disclose:

(a) Where a title contains the name of a person who did not author or edit or only partially authored or edited the actual texts or treatises, the names of authors or editors who contributed substantial parts of an industry product. The names of such authors or editors should appear at least once in immediate conjunction with the title where it most prominently appears in the advertisement;

(b) Other or prior titles and last copyright date where the advertised industry product or substantially the same industry product is or was published separately and/or as part of a set or as part of two or more sets, under identical or different titles (e.g., “Smith on Mortgages” is also published as Volume 9 of “The Symposium on Real Property Law” (1980); or * * * Smith on Mortgages is substantially the same book as * * * or is based on * * * or is composed of material also found in * * * Volume 9 of “The Symposium on Real Property Law” (1980) [or words to that effect]);

(c) Other or prior titles and last copyright date where the industry product or substantially the same industry product is or was published elsewhere and/or in another format under identical or different titles (e.g., “Brown on Leases,” Revised Edition, published under the title of “Landlord & Tenant” (1980); or “Brown on Leases,” Revised Edition, is composed primarily of materials from Landlord & Tenant (1980) [or words to that effect]);

(d) The identity of any sources, by title and last copyright date or other identification of currency, where the material in the industry product is substantially extracted from such sources [e.g., chapter 1 of this book is based on the author's article in “97 Harvard Law Review 283” (1980)];

(e) For 5 years after issuance of a revision or a new edition of another title, the original title and last copyright date or other identification of currency of the precursor industry product.

Representations soliciting the sale of specific industry products should not expressly or impliedly hold out a publication as having been printed or published at the time of the offer when such is not the fact. Solicitations relative to works not yet published should clearly and conspicuously disclose that the publication is being planned or contemplated and that inquiries or orders are being solicited to determine demand for the publication, or words to that effect. [Guide 7]

Representations soliciting the sale of an industry product should not expressly or impliedly describe such product as being designed for a particular jurisdiction unless the contents of said industry product are designed primarily for and contain significant amounts of materials for use in the jurisdiction so designated. Nor shoud the promotional materials for an industry product have a designation or title that expresses or implies that a broader or more general jurisdiction is covered when in fact the industry product is designed primarily for a jurisdiction more limited in scope (e.g., “The New Rules of Evidence” is actually a work which applies to new evidence rules enacted in one State only). [Guide 8]

(a) A subscription renewal notice for industry products should not be sent to any person, firm, library, or entity, where the recipient thereof is not currently subscribing to the industry product to which the renewal notice refers or relates.

(b) A subscription renewal notice should clearly designate the number of the notice (e.g., “First Renewal Notice” or “Second Renewal Notice”). [Guide 10]

Texts or treatises, separately published or published in sets or series, should clearly and conspicuously disclose on the title page or pages, half title page and/or verso of title page:

(a) Full title of the book, including any sub-titles;

(b) If part of a set or series, the title of same;

(c) The number of the edition if not the first;

(d) For 5 years after issuance of a revision or a new edition of another title, the original title and last copyright date or other identification of currency of the precursor industry product;

(e) Unambiguous identification of authors, editors or compilers; or whether authored, edited or compiled by the publisher's editorial staff. However, if authors, editors or compilers are listed in the table of contents or credits, this paragraph need not apply;

(f) Name, city and State of publisher;

(g) Where the industry product or substantially the same industry product is or was published separately or as part of one or more sets under identical or different titles, or is or was published in various places or formats under identical or different titles, the prior titles and the place and date of previous publication. However, if such disclosures appear in the table of contents or credits, this paragraph need not apply;

(h) When the industry product is substantially extracted from other sources, the identity of sources by titles and copyright dates unless such disclosures appear in the table of contents or credits;

(i) Where the title contains the name of a person who did not author or edit, or only partially authored or edited the industry product, the names of authors, editors or publisher's editorial staff who contributed substantial parts of the industry product, and such disclosures should appear on the title page in conspicuous type or print. [Guide 11]

No industry product should be titled with a jurisdictional designation (e.g., “Maryland Edition”; or “Montana Real Estate Law”) unless the contents of said industry product are designed primarily for and contain significant amounts of material for use in that jurisdiction. Nor should an industry product have a title which expresses or implies that a broader or more general jurisdiction is covered when in fact the industry product is designed primarily for a jurisdiction more limited in scope (e.g., “The New Rules of Evidence” is actually a work which applies to new evidence rules enacted in one State only). [Guide 12]

Supplements issued to industry products should clearly and conspicuously disclose:

(a) On title page or verso of pocket parts and of stapled or bound supplemental units and on cover page or pages or their versos for replacement or supplemental pages:

(1) Full title of the industry product; and where part of a set or series, title of said set or series;

(2) Surname and given name of authors, editors or compilers of the titled industry product or if prepared by the publisher's editorial staff;

(3) Surname and given name of authors, editors or compilers of supplement if different from that of the titled book;

(4) Coverage date or date of issuance for the supplement.

(b) On each replacement sheet, the month and year of issuance. [Guide 13]

Prior to the formation of any contract, or other agreement, whether written or oral, for the purchase of industry products containing provisions for subsequent automatic shipment of materials for upkeep purposes, the seller should:

(a) Clearly and conspicuously define the nature and extent of basic upkeep service. Basic upkeep service should include only those parts of upkeep which are absolutely essential and without which a set cannot remain functional (this might include such parts as pocket part supplements, replacement pages, releases and inserts, advance sheets, and replacement, revised, recompiled or split volumes); and

(b) Make available for purchase such basic upkeep service on an automatic shipment basis without requiring the purchase of other additional upkeep services whether on an automatic basis or otherwise.

(a) Sellers of industry products should notify all customers in a clear and conspicuous manner:

(1) To mark conspicuously their account numbers (if any) or other appropriate identifying data on all correspondence and payments, including checks, sent by customers to the seller;

(2) That, upon request for clarification of an account, any customer may receive a statement of accounts, showing each purchase, payment or credit itemized for the current or all pertinent, preceding months;

(3) That, where the seller can apply payments to specific items under its billing procedures, to indicate or identify to the seller or payee the item or items to which any payment is to be applied.

(b) The publisher or seller of industry products should:

(1) When receiving communications showing account numbers, have the responsibility of applying all correspondence and payments to the correct account, and where there is any question, notify the customer before entering the pertinent data into the computer system;

(2) Provide a statement of accounts when requested by the customer;

(3) Where seller can apply payments to specific items under its billing procedures, apply payments or credits as designated by the buyer or payor.

(c) The seller of industry products, in oral or written communications with the buyer, should not use fictitious names, but should use names of live persons who are actively participating in the business.

(d) Billing statements to purchasers of industry products should show:

(1) Date and customer's account number, if any;

(2) Invoice numbers or, where items are listed, a clear and readable description of each item or unit. If abbreviations are used which are not readily understandable, the statement should have thereon or attached thereto a clear interpretation of said abbreviations (e.g., a table);

(3) A price for each item, or invoice totals, or the total of invoice totals;

(4) Penalty, interest, or carrying charges, if any, clearly and separately identified;

(5) Purchases sent on approval, if any, clearly and separately identified.

(e) All industry product invoices should:

(1) Be dated, numbered or adequately identified, and should show customer's account number, if any;

(2) Show a clear and readable description of each item or unit. If abbreviations are used which are not readily understandable, the invoice should have thereon or attached thereto a clear interpretation of said abbreviations;

(3) Show a price for each item, and clearly state terms of sale and amount of discount, if any;

(4) Clearly show the time period for approval orders, by showing specific opening and termination dates.

The adding of volumes or other materials, the overall content of which is not substantially germane to the subject matter of the basic work, constitutes an unfair trade practice. [Guide 16]

An industry product should not be advertised, published or otherwise represented in any manner which may have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers concerning the grade, quality, material, size, contents, authorship, editorship, use, value, price, origin, preparation, manufacture or date of publication or copyright of any industry product or of any supplementation thereto, or the current or up-to-date character thereof, or concerning any service offered in connection therewith, or in any other material respect. [Guide 17]

For the purposes of this part, the following definitions shall apply:

(a) New automobile. Any passenger automobile or light truck for which a fuel economy label is required under the Energy Policy and Conservation Act (42 U.S.C. 6201 et seq.) or rules promulgated thereunder, the equitable or legal title to which has never been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser. The term manufacturer shall mean any person engaged in the manufacturing or assembling of new automobiles, including any person importing new automobiles for resale and any person who acts for and is under control of such manufacturer, assembler, or importer in connection with the distribution of new automobiles. The term dealer shall mean any person, resident or located in the United States or any territory thereof, engaged in the sale or distribution of new automobiles to the ultimate purchaser. The term ultimate purchaser means, for purposes of this part, the first person, other than a dealer purchasing in his or her capacity as a dealer, who in good faith purchases such new automobile for purposes other than resale, including a person who leases such vehicle for his or her personal use.

(b) Estimated city mpg. The gasoline consumption or mileage of new automobiles as determined in accordance with the city test procedure employed and published by the U.S. Environmental Protection Agency as described in 40 CFR 600.209-85 and expressed in miles-per-gallon, to the nearest whole mile-per-gallon, as measured, reported, published, or accepted by the U.S. Environmental Protection Agency.

(c) Estimated highway mpg. The gasoline consumption or mileage of new automobiles as determined in accordance with the highway test procedure employed and published by the U.S. Environmental Protection Agency as described in 40 CFR 600.209-85 and expressed in miles-per-gallon, to the nearest whole mile-per-gallon, as measured, reported, published, or accepted by the U.S. Environmental Protection Agency.

(d) Vehicle configuration. The unique combination of automobile features, as defined in 40 CFR 600.002-85(24).

(e) Estimated in-use fuel economy range. The estimated range of city and highway fuel economy of the particular new automobile on which the label is affixed, as determined in accordance with procedures employed by the U.S. Environmental Protection Agency as described in 40 CFR 600.311 (for the appropriate model year), and expressed in miles-per-gallon, to the nearest whole mile-per-gallon, as measured, reported or accepted by the U.S. Environment Protection Agency.

(f) Range of estimated fuel economy values for the class of new automobiles. The estimated city and highway fuel economy values of the class of automobile (e.g., compact) as determined by the U.S. Environmental Protection Agency pursuant to 40 CFR 600.315 (for the appropriate model year) and expressed in miles-per-gallon, to the nearest whole mile-per-gallon.

(a) No manufacturer or dealer shall make any express or implied representation in advertising concerning the fuel economy of any new automobile 1 unless such representation is accompanied by the following clear and conspicuous disclosures:

(1) If the advertisement makes:

(i) Both a city and a highway fuel economy representation, both the “estimated city mpg” and the “estimated highway mpg” of such new automobile,2 must be disclosed;

(ii) A representation regarding only city or only highway fuel economy, only the corresponding EPA estimate must be disclosed; 3

(iii) A general fuel economy claim without reference to either city or highway, or if the representation refers to any combined fuel economy number, the “estimated city mpg” must be disclosed; 4 and

(2) That the U.S. Environmental Protection Agency is the source of the “estimated city mpg” and “estimated highway mpg” and that the numbers are estimates.5

(b) If an advertisement for a new automobile cites:

(1) The “estimated in-use fuel economy range,” the advertisement must state with equal prominence both the upper and lower number of the range, an explanation of the meaning of the numbers (i.e., city mpg range or highway mpg range or both), and that the U.S. Environmental Protection Agency is the source of the figures.

(2) The “range of estimated fuel economy values for the class of new automobiles” as a basis for comparing the fuel economy of two or more automobiles, such comparison must be made to the same type of range (i.e., city or highway).6

(c) Fuel economy estimates derived from a non-EPA test may be disclosed provided that:

(1) The advertisement also discloses the “estimated city mpg” and/or the “estimated highway mpg,” as required by § 259.2(a), and the disclosure required by § 259.2(a), and gives the “estimated city mpg” and/or the “estimated highway mpg” figure(s) substantially more prominence than any other estimate; 7 provided, however, for radio and television advertisements in which any other estimate is used only in the audio, equal prominence must be given the “estimated city mpg” and/or the “estimated highway mpg” figure(s); 8

(2) The source of the non-EPA test is clearly and conspicuously identified;

(3) The driving conditions and variables simulated by the test which differ from those used to measure the “estimated city mpg” and/or the “estimated highway mpg,” and which result in a change in fuel economy, are clearly and conspicuously disclosed.9 Such conditions and variables may include, but are not limited to, road or dynamometer test, average speed, range of speed, hot or cold start, and temperature; and

(4) The advertisement clearly and conspicuously discloses any distinctions in “vehicle configuration” and other equipment affecting mileage performance (e.g., design or equipment differences which distinguish subconfigurations as defined by EPA) between the automobiles tested in the non-EPA test and the EPA tests.

The guides in this part represent administrative interpretations of laws administered by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. These guides specifically address the application of Section 5 of the FTC Act to environmental advertising and marketing practices. They provide the basis for voluntary compliance with such laws by members of industry. Conduct inconsistent with the positions articulated in these guides may result in corrective action by the Commission under Section 5 if, after investigation, the Commission has reason to believe that the behavior falls within the scope of conduct declared unlawful by the statute.

These guides apply to environmental claims included in labeling, advertising, promotional materials and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, depictions, product brand names, or through any other means. The guides apply to any claim about the environmental attributes of a product or package in connection with the sale, offering for sale, or marketing of such product or package for personal, family or household use, or for commercial, institutional or industrial use.

Because the guides are not legislative rules under Section 18 of the FTC Act, they are not themselves enforceable regulations, nor do they have the force and effect of law. The guides themselves do not preempt regulation of other federal agencies or of state and local bodies governing the use of environmental marketing claims. Compliance with federal, state or local law and regulations concerning such claims, however, will not necessarily preclude Commission law enforcement action under Section 5.

The guides are composed of general principles and specific guidance on the use of environmental claims. These general principles and specific guidance are followed by examples that generally address a single deception concern. A given claim may raise issues that are addressed under more than one example and in more than one section of the guides. In many of the examples, one or more options are presented for qualifying a claim. These options are intended to provide a “safe harbor” for marketers who want certainty about how to make environmental claims. They do not represent the only permissible approaches to qualifying a claim. The examples do not illustrate all possible acceptable claims or disclosures that would be permissible under Section 5. In addition, some of the illustrative disclosures may be appropriate for use on labels but not in print or broadcast advertisements and vice versa. In some instances, the guides indicate within the example in what context or contexts a particular type of disclosure should be considered.

The Commission will review the guides as part of its general program of reviewing all industry guides on an ongoing basis. Parties may petition the Commission to alter or amend these guides in light of substantial new evidence regarding consumer interpretation of a claim or regarding substantiation of a claim. Following review of such a petition, the Commission will take such action as it deems appropriate.

Section 5 of the FTC Act makes unlawful deceptive acts and practices in or affecting commerce. The Commission's criteria for determining whether an express or implied claim has been made are enunciated in the Commission's Policy Statement on Deception. 1 In addition, any party making an express or implied claim that presents an objective assertion about the environmental attribute of a product or package must, at the time the claim is made, possess and rely upon a reasonable basis substantiating the claim. A reasonable basis consists of competent and reliable evidence. In the context of environmental marketing claims, such substantiation will often require competent and reliable scientific evidence, defined as tests, analyses, research, studies or other evidence based on the expertise of professionals in the relevant area, conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. Further guidance on the reasonable basis standard is set forth in the Commission's 1983 Policy Statement on the Advertising Substantiation Doctrine. 49 FR 30999 (August 2, 1984); appended to Thompson Medical Co., 104 F.T.C. 648 (1984). The Commission has also taken action in a number of cases involving alleged deceptive or unsubstantiated environmental advertising claims. A current list of environmental marketing cases and/or copies of individual cases can be obtained by calling the FTC Public Reference Branch at (202) 326-2222.

The following general principles apply to all environmental marketing claims, including, but not limited to, those described in § 260.7. In addition, § 260.7 contains specific guidance applicable to certain environmental marketing claims. Claims should comport with all relevant provisions of these guides, not simply the provision that seems most directly applicable.

(a) Qualifications and disclosures: The Commission traditionally has held that in order to be effective, any qualifications or disclosures such as those described in the guides in this part should be sufficiently clear and prominent to prevent deception. Clarity of language, relative type size and proximity to the claim being qualified, and an absence of contrary claims that could undercut effectiveness, will maximize the likelihood that the qualifications and disclosures are appropriately clear and prominent.

(b) Distinction between benefits of product and package: An environmental marketing claim should be presented in a way that makes clear whether the environmental attribute or benefit being asserted refers to the product, the product's packaging or to a portion or component of the product or packaging. In general, if the environmental attribute or benefit applies to all but minor, incidental components of a product or package, the claim need not be qualified to identify that fact. There may be exceptions to this general principle. For example, if an unqualified “recyclable” claim is made and the presence of the incidental component significantly limits the ability to recycle the product, then the claim would be deceptive.

(c) Overstatement of environmental attribute: An environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit, expressly or by implication. Marketers should avoid implications of significant environmental benefits if the benefit is in fact negligible.

(d) Comparative claims: Environmental marketing claims that include a comparative statement should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid consumer deception. In addition, the advertiser should be able to substantiate the comparison.

Guidance about the use of environmental marketing claims is set forth below. Each guide is followed by several examples that illustrate, but do not provide an exhaustive list of, claims that do and do not comport with the guides. In each case, the general principles set forth in § 260.6 should also be followed.2

(a) General environmental benefit claims: It is deceptive to misrepresent, directly or by implication, that a product or package offers a general environmental benefit. Unqualified general claims of environmental benefit are difficult to interpret, and depending on their context, may convey a wide range of meanings to consumers. In many cases, such claims may convey that the product or package has specific and far-reaching environmental benefits. As explained in the Commission's Ad Substantiation Statement, every express and material, implied claim that the general assertion conveys to reasonable consumers about an objective quality, feature or attribute of a product must be substantiated. Unless this substantiation duty can be met, broad environmental claims should either be avoided or qualified, as necessary, to prevent deception about the specific nature of the environmental benefit being asserted.

(b) Degradable/biodegradable/photo-de-grad-able: It is deceptive to misrepresent, directly or by implication, that a product or package is degradable, biodegradable or photo-de-grad-able. An unqualified claim that a product or package is degradable, biodegradable or photo-de-grad-able should be substantiated by competent and reliable scientific evidence that the entire product or package will completely break down and return to nature, i.e., decompose into elements found in nature within a reasonably short period of time after customary disposal. Claims of de-grad-a-bility, biode-grad-a-bility or photo-de-grad-abil-ity should be qualified to the extent necessary to avoid consumer deception about:

(1) The product or package's ability to degrade in the environment where it is customarily disposed; and

(2) The rate and extent of degradation.

(c) Compostable. It is deceptive to misrepresent, directly or by implication, that a product or package is com-postable. An unqualified claim that a product or package is com-postable should be substantiated by competent and reliable scientific evidence that all the materials in the product or package will break down into, or otherwise become part of, usable com-post (e.g., soil-conditioning material, mulch) in a safe and timely manner in an appropriate com-posting program or facility, or in a home com-post pile or device. Claims of com-postability should be qualified to the extent necessary to avoid consumer deception. An unqualified claim may be deceptive.

(1) If municipal com-posting facilities are not available to a substantial majority of consumers or communities where the package is sold;

(2) If the claim misleads consumers about the environmental benefit provided when the product is disposed of in a landfill; or

(3) If consumers misunderstand the claim to mean that the package can be safely com-posted in their home com-post pile or device, when in fact it cannot.

(d) Recyclable. It is deceptive to misrepresent, directly or by implication, that a product or package is recyclable. A product or package should not be marketed as recyclable unless it can be collected, separated or otherwise recovered from the solid waste stream for use in the form of raw materials, in the manufacture or assembly of a new package or product. Unqualified claims of recyclability for a product or package may be made if the entire product or package, excluding minor incidental components, is recyclable. For products or packages that are made of both recyclable and non-recyclable components, the recyclable claim should be adequately qualified to avoid consumer deception about which portions or components of the product or package are recyclable. Claims of recyclability should be qualified to the extent necessary to avoid consumer deception about any limited availability of recycling programs and collection sites. If an incidental component significantly limits the ability to recycle the product, the claim would be deceptive. A product or package that is made from recyclable material, but, because of its shape, size or some other attribute, is not accepted in recycling programs for such material, should not be marketed as recyclable.

(e) Recycled content: A recycled content claim may be made only for materials that have been recovered or otherwise diverted from the solid waste stream, either during the manufacturing process (pre-consumer), or after consumer use (post-consumer). To the extent the source of recycled content includes pre-consumer material, the manufacturer or advertiser must have substantiation for concluding that the pre-consumer material would otherwise have entered the solid waste stream. In asserting a recycled content claim, distinctions may be made between pre-consumer and post-consumer materials. Where such distinctions are asserted, any express or implied claim about the specific pre-consumer or post-consumer content of a product or package must be substantiated. It is deceptive to misrepresent, directly or by implication, that a product or package is made of recycled material. Unqualified claims of recycled content may be made only if the entire product or package, excluding minor, incidental components, is made from recycled material. For products or packages that are only partially made of recycled material, a recycled claim should be adequately qualified to avoid consumer deception about the amount, by weight, of recycled content in the finished product or package.

(f) Source reduction: It is deceptive to misrepresent, directly or by implication, that a product or package has been reduced or is lower in weight, volume or toxicity. Source reduction claims should be qualified to the extent necessary to avoid consumer deception about the amount of the source reduction and about the basis for any comparison asserted.

(g) Refillable: It is deceptive to misrepresent, directly or by implication, that a package is refillable. An unqualified refillable claim should not be asserted unless a system is provided for the collection and return of the package for refill or the later refill of the package by consumers with product subsequently sold in another package. A package should not be marketed with an unqualified refillable claim, if it is up to the consumer to find new ways to refill the package.

(h) Ozone safe and ozone friendly: It is deceptive to misrepresent, directly or by implication, that a product is safe for or “friendly” to the ozone layer or the atmosphere. For example, a claim that a product does not harm the ozone layer is deceptive if the product contains an ozone-depleting substance.

National Environmental Policy Act. In accordance with § 1.83 of the FTC's Procedures and Rules of Practice 4 and § 1501.3 of the Council on Environmental Quality's regulations for implementing the procedural provisions of National Environmental Policy Act, 42 U.S.C. 4321 et seq. (1969), 5 the Commission prepared an environmental assessment when the guides were issued in July 1992 for purposes of providing sufficient evidence and analysis to determine whether issuing the Guides for the Use of Environmental Marketing Claims required preparation of an environmental impact statement or a finding of no significant impact. After careful study, the Commission concluded that issuance of the Guides would not have a significant impact on the environment and that any such impact “would be so uncertain that environmental analysis would be based on speculation.” 6 The Commission concluded that an environmental impact statement was therefore not required. The Commission based its conclusions on the findings in the environmental assessment that issuance of the guides would have no quantifiable environmental impact because the guides are voluntary in nature, do not preempt inconsistent state laws, are based on the FTC's deception policy, and, when used in conjunction with the Commission's policy of case-by-case enforcement, are intended to aid compliance with section 5(a) of the FTC Act as that Act applies to environmental marketing claims.

The Commission has concluded that modifications to the guides in this part will not have a significant effect on the environment, for the same reasons that the issuance of the original guides in 1992 was deemed not to have a significant effect on the environment. Therefore, the Commission concludes that an environmental impact statement is not required in conjunction with the 1996 modifications to the Guides for the Use of Environmental Marketing Claims.