(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credit, etc.,1 which effect unlawful price discrimination. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to grant or allow, secretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential where such rebate, refund, discount, credit, or other form of price differential effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination or with customers of either of them: Provided, however, (1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States.

(2) That nothing contained in this section shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

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

1 Paragraph (a) of § 137.6 shall not be construed as embracing practices prohibited by paragraphs (b), (c) and (d) of this section.

(4) That nothing contained in this section shall prevent price changes from time to time where made in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods

concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(c) Prohibited advertising or promotional allowances, etc. It is an unfair trade practice for any member of the industry engaged in commerce to pay or contract for the payment of advertising or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer, in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such member, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or by furnishing, or by contributing to the furnishing of, any services or facilities con

nected with the processing, handling, sale or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528; 15 U. S. C. 13, 13a, 13b, 21a)

§ 137.7 Discriminatory returns.

It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one customer-purchaser against another customer-purchaser of knitted outerwear, bought from such member of the industry for resale, by contracting to furnish or furnishing in connection therewith, upon terms not accorded to all customer-purchasers on proportionally equal terms, the service or facility whereby such favored purchaser is accorded the privilege of returning knitted outerwear so purchased and receiving therefor credit or refund of purchase price: Provided, however, Nothing in this part shall prohibit or be used to prevent the return of merchandise by purchaser, for credit or refund of purchase price, when and because such merchandise has not been properly labeled by the seller as to fiber content, or has been otherwise falsely or deceptively labeled or represented, or when and because such merchandise is defective in material, workmanship, or in any other respect contrary to warranty or purchase contract.

§ 137.8 Consignment sales.

or used as restricting or preventing consignment shipping or marketing of commodities in good faith and without artificial interference with competitors' use of the usual channels of distribution in such manner as thereby to suppress competition or restrain trade.

§ 137.9 Aiding or abetting use of unfair trade practices.

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

The practice, by members of the industry, of selling merchandise and later permitting the purchaser to return it for credit or refund of purchase price, without just cause, creates waste and loss, increases the cost of doing business to the detriment of both the industry and the public, and is condemned by the industry, subject, however, to requirements and limitations set forth in the provisions of § 137.7, and subject also to the general limitation that members of the industry shall not engage in any combination or conspiracy in restraint of trade or use any other illegal methods in the regulation, control or prevention of the return of merchandise.

It is an unfair trade practice for any member of the industry to use the practice of shipping goods on consignment or pretended consignment for the purpose and with the effect of artificially clogging trade outlets and unduly restricting competitors' use of said trade outlets in getting their goods to consumers through regular channels of distribution, or with such purpose to entirely close said trade outlets to such competitors so as to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade: Provided, however, That nothing in this section shall be construed

1 This part does not supplant, or relieve any member of the industry or other party of the necessity of complying with, such applicable fiber identification rules and other pertinent Group I rules as have been or may be approved and promuglated by the Federal Trade Commission.

The false or deceptive marking or branding of ribbons with respect to the grade, quality, yardage, size, use, colorfastness, content, origin, construction, fabrication, manufacture or distribution thereof, or in any other material respect, is an unfair trade practice.

§ 138.2 Misrepresentation of industry products.

It is an unfair trade practice to make or publish or cause to be made or published, directly or indirectly, any false, misleading or deceptive statement, representation, guarantee or warranty, by way of advertisement or otherwise, concerning the grade, quality, yardage, size, use, colorfastness, content, origin, construction, fabrication, manufacture or distribution of any ribbon, or in any other material respect.

§ 138.3 Misrepresentation as to character of business.

It is an unfair trade practice for any member of the industry to represent,

directly or indirectly, through the use of the word "mill" or "mills," or any other word or term of similar import or meaning, in his or its corporate or trade name, or otherwise, that he or it is a manufacturer of ribbons or that he or it is the owner or operator of a mill or producing company manufacturing ribbons, when such is not the fact, or in any other manner to misrepresent the character, extent or type of his or its business.

§ 138.4 False invoicing.

Withholding from or inserting in invoices or sales tickets any statements or information by reason of which omission or insertion a false record is made, wholly or in part, of the transactions represented on the face of such invoices or sales tickets, with the effect of thereby misleading or deceiving purchasers or the consuming public, is an unfair trade practice.

§ 138.5

Defamation of competitors or disparagement of their products. The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the grade, quality or manufacture of the products of competitors or of their business methods, selling prices, values, credit terms, policies or services, is an unfair trade practice. § 138.6 Commercial bribery.

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

§ 138.7 Imitation or simulation of trademarks, trade names, etc.

The imitation or simulation of the trade-marks, trade names, brands or

labels of competitors, or of the exclusively owned patterns of competitors which have not been directly or by operation of law dedicated to the public, with the tendency and capacity or effect of misleading or deceiving purchasers or the consuming public, is an unfair trade practice. § 138.8

Circulation of threats of suit.

The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of competitors, not made in good faith but for the purpose or with the effect of harassing or intimidating such customers or prospective customers, or of unduly hampering, injuring or prejudicing competitors in their businesses, is an unfair trade practice.

§ 138.9 Consignment selling.

It is an unfair trade practice for any member of the industry to use the practice of shipping goods on consignment or pretended consignment for the purpose and with the effect of artificially clogging trade outlets and unduly restricting competitors' use of said trade outlets in getting their goods to consumers through regular channels of distribution, or with such purpose to entirely close said trade outlet to such competitors so as to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade: Provided, however, That nothing herein shall be construed or used as restricting or preventing consignment shipping or marketing of commodities in good faith and without artificial interference with competitors' use of the usual channels of distribution in such manner as thereby to suppress competition or restrain trade.

§ 138.10

Deception as to origin.

In respect to any ribbons of the following types, first, ribbons which have been woven or fabricated in a foreign country and imported in the greige or other unfinished state and dyed or finished in the United States; or second, ribbons which have been imported in the finished state and redyed or refinished in the United States; or third, ribbons which have been made from fabric which has been woven or fabricated in a foreign country and imported either in the greige or unfinished state or in the dyed or finished state, it is an unfair trade practice:

(a) To offer for sale, sell or distribute any such ribbon under marks, stamps,

brands, labels or representations which have the capacity and tendency or effect of misleading or deceiving purchasers or the consuming public into the erroneous belief that such ribbons or the fabrics thereof were woven or fabricated in the United States, or that they were not so dyed, finished, redyed or refinished in the United States, as the case may be;

or

(b) To offer for sale, sell or distribute any such ribbons without the same being marked, stamped, branded or labeled so as to indicate clearly and nondeceptively (1) the country of origin of the fabric, and (2) that the ribbons were woven or fabricated in such country and were dyed or finished or redyed or refinished in the United States, as the case may be; the failure, refusal or omission to so mark, stamp, brand or label such ribbons having the tendency and capacity or result of thereby promoting, abetting or effectuating the marketing of the ribbons under conditions which are misleading or deceptive to purchasers or the consuming public.

Nothing in this section shall be construed as relieving any member of the industry or other party of the necessity of complying with the requirements of the customs law or regulations or other applicable provisions of law or regulation, relating to the marking of imported articles.

CROSS REFERENCE: For Customs Regulations, see 19 CFR Chapter I.

§ 138.11 Disclosure of yardage.

In order that purchasers may not be deceived as to the yardage of ribbons and that misrepresentation and deceptive concealment in respect thereto may be avoided and prevented, the minimum yardage of the article should be clearly and nondeceptively marked on the product or on the spools, bolts, cards or other immediate packaging of the product; and the sale, offer for sale or distribution of any ribbons not so marked, with the tendency and capacity or effect of misleading or deceiving purchasers or the consuming public, is an unfair trade practice.2

2 In cutting industry products in the greige or after finishing, adequate allowance should be made for the subsequent shrinkage and/or contraction of such products, to the end that purchasers may be assured the full yardage represented.

§ 138.12 "Cut-edge" and "pasted-back" products.

To the end that purchasers may have adequate information concerning the following types of industry products, and that confusion, misrepresentation and deception may be avoided and prevented, the spool, bolt, card or other form of immediate packaging of such products should be clearly and nondeceptively marked in the following manner:

(a) Ribbons having cut, and not woven, edges should be marked or labeled with the words "cut-edge," or with the word or words of similar import or meaning.

(b) Ribbons made by the adhesion of separate layers of fabric should be marked or labeled with such appropriate word or words as will adequately disclose that such products are so made, as for example, "pasted-back."

(c) Ribbon products which are both "cut-edge" and "pasted-back" are subject to the disclosure requirements of both paragraphs (a) and (b) of this section.

It is an unfair trade practice to cause any such product to be offered for sale, sold or distributed without being so marked or labeled, with the tendency and capacity or effect of thereby misleading or deceiving purchasers or the consuming public.

Nothing in this section shall be construed, however, as preventing the use of the word "ribbon" or "ribbons" in properly describing such products of the industry: Provided, That the words "cutedge" and/or "pasted-back" or other appropriate terms are set forth in immediate conjunction therewith, and with at least equal prominence, conspicuousness and emphasis, as for example, "cut-edge ribbon," "pasted-back ribbon," or "cutedge pasted-back ribbon.”

§ 138.13 Prohibited discriminatory practices.

(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits, etc., which effect unlawful price discrimination. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to grant or allow, secretly or openly, directly or indirectly, any rebate, refund, discount, credit or other form of price differential, where such rebate, refunds, discount, credit, or other form of price differential effects a discrimination in price between different

purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination or with customers of either of them: Provided, however (1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing contained in this section shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

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

(4) That nothing contained in this section shall prevent price changes from time to time where made in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(c) Prohibited advertising or promotional allowances, etc. It is an unfair