Guide for Avoiding Deceptive Use of Word ``Mill'' in the Textile Industry

FEDERAL TRADE COMMISSION

16 CFR Part 236

Guide for Avoiding Deceptive Use of Word ``Mill'' in the Textile

Industry

AGENCY: Federal Trade Commission.

ACTION: Rescission of the guide for avoiding deceptive use of word

``Mill'' in the textile industry.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission (the ``Commission''), as part of

its periodic review of all its guides and rules, announces that it has

concluded a review of its Guide for Avoiding Deceptive Use of Word

``Mill'' in the Textile Industry (``Guide'' or ``Use of Word `Mill'

Guide''). The Commission has decided to rescind the Guide.

FOR FURTHER INFORMATION CONTACT:

Ann M. Guler, Investigator, Federal Trade Commission, Los Angeles

Regional Office, 11000 Wilshire Blvd., Suite 13209, Los Angeles, CA

90024, (310) 235-7890.

SUPPLEMENTARY INFORMATION:

I. Background

The Use of Word `Mill' Guide was issued by the Commission in

1967.\1\ The Guide states that the word ``mill'' should not be used in

the corporate, business, or trade name of any person or concern

handling textiles, unless the person or concern actually owns and

operates or controls the manufacturing facility in which all textile

materials sold under that name are produced. The Guide includes

examples where use of the word ``mill'' has been found to be deceptive.

\1\ Industry guides are administrative interpretations of laws

administered by the Commission for the guidance of the public in

conducting its affairs in conformity with legal requirements. 16 CFR

1.5.

---------------------------------------------------------------------------

On April 15, 1994, the Commission published a Notice in the Federal

Register soliciting comment on the Guide.\2\ Specifically, the

Commission solicited comments on the costs and benefits of the Guide

and its regulatory and economic effect. The comment period closed June

14, 1994. The Commission received three comments in response to the

Notice. They are discussed in Part II below.

\2\ 59 FR 18005.

---------------------------------------------------------------------------

II. Comments Received

The Commission received comments from three organizations: The

American Textile Manufacturers Institute (ATMI), National Association

of Hosiery Manufacturers (NAHM), and the Better Business Bureau of

Nashville/Middle Tennessee, Inc. All of the commenters supported the

continuation of the Guide in its present form. The ATMI and NAHM both

stated that the Guide is beneficial to the textile manufacturing

industry and to consumers because it prevents possible false claims by

companies that may distribute but do not actually manufacture textile

products. They further stated that the guide does not impose costs or

burdens on industry or on consumers. The Better Business Bureau of

Nashville/Middle Tennessee, Inc.'s comment asserted that the Guide is

necessary ``to prevent misleading the public and unfair competition in

the marketplace.''

The Nashville/Middle Tennessee BBB comment also raised the issue of

other words used in trade names. The BBB recommended that the

Commission restrict the use of words such as ``factory'' and

``manufacturer'' in corporate, business, or trade names ``unless the

entity so named actually owns, operates or controls the manufacturing

facility which produces all merchandise being advertised and/or sold

under the name.''

III. Conclusion

The Commission has concluded its regulatory review of the Guide for

Avoiding Deceptive Use of the Word ``Mill'' by rescinding the Guide.

The Commission has no evidence of circumstances associated with the use

of the word ``mill'' that would require special protection for

consumers or guidance for industry, such as evidence that consumers

currently believe that textile industry entities with the word ``mill''

in their names are engaged in the manufacture of textiles. Today, the

word ``mill'' is commonly used in business names both within and

outside the textile industry. For example, many shopping malls use the

word ``mill'' or ``mills'' in their names. The word ``mill'' is also

frequently used in the names of businesses, including retail stores or

shopping malls, that occupy the building or site of a former textile

mill. Additionally, the word ``mill'' is used in various enterprises

outside of the textile

[[Page 37335]]

industry. For example, firms in the food production or food service

industry may use the word ``mill'' because of its association with

grinding grain into flour. These uses would not be covered by the

Guide, because the businesses do not handle textiles. Other businesses

may use the word ``mill'' in a creative name that has nothing to do

with the original meanings of the word for textile manufacturing, grain

processing, or any other form of materials processing. The Commission

considers it unlikely that such uses of the word ``mill'' mislead

consumers in any material way in their purchasing decisions or

otherwise cause any consumer injury.

Given the many and varied uses of the term ``mill'' in today's

lexicon, the Commission has concluded that the Guide is obsolete. If,

in the future, certain uses of this term (or any other term) in

business or trade names are determined to be materially misleading, the

Commission can address such practices under Section 5 of the Federal

Trade Commission Act.

List of Subjects in 16 CFR Part 236

Advertising, trade name, textiles, mill.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 95-17878 Filed 7-19-95; 8:45 am]

BILLING CODE 6750-01-M