Guides for Select Leather and Imitation Leather Products

FEDERAL TRADE COMMISSION

16 CFR Part 24

Guides for Select Leather and Imitation Leather Products

AGENCY: Federal Trade Commission.

ACTION: Final rule; Final Guides for Select Leather and Imitation

Leather Products.

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

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

concluded a review of its proposed Guides for Select Leather and

Imitation Leather Products (``proposed Guides''), which combined and

amended the provisions of Guides for the Luggage and Related Products

Industry, the Guides for Shoe Content Labeling and Advertising, the

Guides for the Ladies' Handbag Industry and the Commission's Trade

Regulation Rule Concerning Misbranding and Deception as to Leather

Content of Waist Belts. The Commission has decided to adopt the

proposed Guides, modified as discussed below.

EFFECTIVE DATE: The effective date of this rule is December 2, 1996.

FOR FURTHER INFORMATION CONTACT: Susan E. Arthur, Attorney, (214) 767-

[[Page 51578]]

5503, Federal Trade Commission, Dallas Regional Office, 100 N. Central

Expressway, Suite 500, Dallas, Texas 75201.

SUPPLEMENTARY INFORMATION:

I. Background

On September 18, 1995, the Commission rescinded the Guides for the

Luggage and Related Products Industry (``Luggage Guides''), the Guides

for Shoe Content Labeling and Advertising (``Shoe Content Guides''),

and the Guides for the Ladies' Handbag Industry (``Handbag Guides'').

60 FR 48027 (September 18, 1995). On the same day, the Commission

sought public comment on proposed Guides for Select Leather and

Imitation Leather Products. 60 FR 48056 (September 18, 1995). The

proposed Guides combined relevant portions of the three Guides, updated

certain language used in the Guides, and made other modifications to

clarify and streamline the provisions of the Guides. The Commission

included within the coverage of the proposed combined Guides certain

provisions of the Commission's Trade Regulation Rule Concerning

Misbranding and Deception as to Leather Content of Waist Belts, 16 CFR

Part 405 (``Waist Belt Rule'').1

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\1\ The Commission recently repealed the Waist Belt Rule. 61 FR

25560 (May 22, 1996).

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The request for public comment contained questions designed to

assist the Commission in determining whether the proposed Guides should

be expanded in scope and to allow interested parties to apprise the

Commission of any special considerations for their industries. The

questions were as follows:

1. Should the proposed Guides for Select Leather and Imitation

Leather Products be expanded in scope to include other products made of

leather or imitation leather? Such products might include, but are not

limited to, clothing, furniture, watchbands, and equestrian items.

2. Are there special considerations for these or other leather or

imitation leather goods which are not addressed by the proposed Guides?

How could any such special considerations be addressed by the Guides?

II. Comments Received

Nine comments were received in response to this request for public

comment. Additionally, the Commission received two Waist Belt Rule

comments in response to an advance notice of proposed rulemaking

published on September 18, 1995. Previously, the Commission had

received 12 comments in response to its March 27, 1995 Federal Register

notice on the three individual Guides and 10 comments on the Waist Belt

Rule (all but three of the Waist Belt Rule comments were also submitted

in response to the request for comment on the three Guides). Because

the Waist Belt Rule comments concern the same or similar issues as

those under consideration in this proceeding, they have been considered

in this review.

In its September 18, 1995 Federal Register notice, the Commission

addressed the first set of comments on the three Guides and the Waist

Belt Rule, which had been received in response to its March 27, 1995

Federal Register notice. The Commission now addresses the comments

received in response to the September 18, 1995 Federal Register notice

and will refer to the first set of comments where appropriate or

necessary to the discussion.2

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\2\ Comments Received in Response to the March 27, 1995 Federal

Register Notice.

Concerning the Three Guides:

1. Rose E. Kettering (``REK''). Same comment sent regarding

Waist Belt Rule

2. Matt Anderson (``MA''). Same comment sent regarding Waist

Belt Rule.

3. Marilyn Raeth (``MR''). Same comment sent regarding Waist

Belt Rule.

4. James A. McGarry (``JAM''). Same comment sent regarding Waist

Belt Rule.

5. Lenna Mae Gara (``LMG''). Same comment sent regarding Waist

Belt Rule.

6. Linda D. Lipinski (``LDL'').

7. Footwear Industries of America (``FIA'').

8. Leather Industries of America, Inc. (``LIA''). Same comment

sent regarding Waist Belt Rule.

9. Luggage and Leather Goods Manufacturers of America, Inc.

(``LLGMA'').

10. Cromwell Leather Company, Inc. (``CL''). Same comment sent

regarding Waist Belt Rule.

11. Enger Kress (``EK'').

12. Footwear Distributors and Retailers of America (``FDRA'').

Concerning the Waist Belt Rule:

13. Stephen Toso (``ST'').

14. Humphreys, Inc. (``HI'').

15. Enger Kress (``EK2'').

Comments Received in Response to the September 18, 1995 Federal

Register Notice.

Concerning the Proposed Guides:

16. Ecological Fibers, Inc. (``EFI'').

17. Leather Industries of America (``LIA2''). Addendum dated

January 11, 1996 (``LIA3''). Addendum dated January 18, 1996

(``LIA4'').

18. Fried, Frank, Harris, Shriver & Jacobson (``FFHSJ'').

19. Footwear Industries of America (``FIA2''). Addendum dated

January 25, 1996, to Susan Arthur (``FIA3''). Addendum dated January

25, 1996, to Secretary's Office (``FIA4''). Addendum dated January

30, 1996 (``FIA5'').

20. Footwear Distributors and Retailers of America (``FDRA2'').

21. Cromwell Leather Company, Inc. (``CL2'').

22. People for the Ethical Treatment of Animals (``PETA'').

23. Hong Kong Government Industry Department (``HK'').

24. Luggage and Leather Goods Manufacturers of America

(``LLGMA2'').

Concerning the Waist Belt Rule:

24. Humphreys, Inc. (``HI2'').

25. Larry Gundersen (``LG'').

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In conducting this review, the Commission also examined the

European Union Directive 94/11/EC, which applies to footwear. The

Directive has as its objective informing consumers of the contents of

their shoes, which is different from the Guides' aim of preventing

misrepresentation caused by the appearance of leather. However, to

enhance global harmonization, the Commission has, where appropriate,

incorporated some of the concepts of the Directive into the Guides.

A. Comments Concerning the Usefulness of the Guides

The proposed Guides are premised on the Commission's long-standing

position that a product that looks like leather makes an implied

representation that the product is made of leather. The Commission

received a number of comments which indicated a need for the Guides.

One comment, however, stated that the proposed Guides are at odds with

current Commission law and policy and urged the Commission to abandon

the Guides as they apply to shoes and boots.3 This comment also

said that the proposed Guides convert silence about shoe content into

an ``appearance of leather'' misrepresentation and then require

disclosure to cure that misrepresentation.

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\3\ FDRA2, #20 at 2.

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Specifically, the Footwear Distributors and Retailers of America

argues that the proposed Guides deal with conduct that is not

prohibited under modern FTC deception law. The association cites

International Harvester Co., 104 F.T.C. 949 (1984), as setting forth

the circumstances under which the Commission will apply deception

theory to omissions: (1) where the seller fails to disclose information

necessary to prevent an affirmative statement from creating a

misleading impression, and (2) where the seller remains silent under

circumstances which constitute an implied but false representation.

International Harvester, however, also states that a deceptive omission

can arise from the physical appearance of a product, and cites as

authority a case in which the Commission upheld charges against a

seller who failed to disclose that a simulated wood product was

actually paper. Haskelite Mfg. Corp., 33 F.T.C. 1212, 1216 (1941),

aff'd, 127 F.2d 765 (7th Cir. 1942). The proposed

[[Page 51579]]

Guides are designed to correct the same type of omission as that in

Haskelite. Both cases provide support for the underlying premise of the

Guides.

The Footwear Distributors and Retailers of America also cites

Thompson Medical, 104 F.T.C. 648, (1984), aff'd, 791 F.2d 189 (D.C.

Cir. 1986), cert. denied, 479 U.S. 1086 (1987) and Leonard Porter, 88

F.T.C. 546, (1976), as support for the proposition that a product

appearing to be leather does not make an implied representation

concerning the material from which the product is made. In Thompson

Medical, the Commission said that if an initial review does not permit

it to conclude with confidence that an implied message exists, it will

not find the implied claim unless extrinsic evidence (consumer surveys,

expert testimony) allows it to conclude that such a reading is

reasonable. In Leonard Porter, the Commission found that consumers

would not generally assume that certain souvenirs were handmade in

Alaska by natives. The Commission said that, simply from the appearance

of the items, it could not conclude that the items possessed the

capacity to deceive as to their origin and method of manufacture.4

With regard to the appearance of leather and the potential resulting

content representation created by that appearance, however, a visual

examination of the item is sufficient to determine whether a

representation is made. Extrinsic evidence is unnecessary to determine

the existence of the claim.

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\4\ The Commission also said that complaint counsel's extrinsic

consumer evidence did not appear to be representative either of

current conditions or of any substantial segment of consumers and

did not support a need for disclosures.

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The Footwear Distributors and Retailers of America comment also

expresses a belief that new high-tech synthetics are far superior to

the synthetics used in the early 1960's, ``offering the appearance,

comfort, breathability, durability, and other qualities that are

comparable or superior to leather.'' The organization believes that the

performance and value of the shoe, not the materials used, drive

consumer choice. Further, Footwear Distributors and Retailers of

America states that consumers do not assume that footwear is made of

leather nor do they care about the exact materials used in shoes.

The Commission believes that leather content representations likely

are material to consumers. Two consumers who responded to the first

request for comment indicated a belief that imitation leather, when

used in shoes, may cause feet to sweat excessively.5 Another

stated that animal lovers, vegetarians and others who do not wish to

wear leather need to know what they are buying.6 Two other

comments from the first set of comments indicated that the requirements

of the Guides assist consumers in making purchasing decisions.7

Although the Footwear Distributors and Retailers of America comment

contends that these consumer comments are anecdotal evidence which

should be rejected, the Commission believes that they demonstrate a

desire on the part of consumers to be informed of the nature of a

product and that this desire is common to a substantial number of

consumers.

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\5\ REK, #1; MA, #2 at 2.

\6\ LMG, #5.

\7\ MR, #3 and JAM, #4.

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It seems likely that the appearance of leather in a synthetic

material may be a representation that the product is leather. Further,

price or other factors are unlikely to signal to consumers that a

product which appears to be leather is not.8 Products made from

synthetics that look like leather, especially synthetic athletic shoes,

are often priced the same as similar products made of leather.

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\8\ In contrast, consumers are unlikely to confuse a gold-toned

product with real gold when the ``pretender'' sells for a fraction

of the amount that gold items typically cost.

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In addition, the Guides trigger disclosures for non-leather

materials only when a product appears to be leather and is not. Many

synthetics are intentionally made to simulate the look of leather,

apparently because many consumers prefer leather. Other synthetic

products, however, are clearly and visibly synthetic, and for such

products disclosure requirements would not be triggered. Thus, the

application of the Guides is properly limited to situations where

consumers are likely to be misled about a product's true composition.

In sum, it seems likely that that the appearance of leather in a

non-leather product constitutes a representation that a product is

leather. Consumers have come to rely upon the information provided

pursuant to the Guides, and if the Commission did not adopt the

proposed Guides, it is likely that confusion in the marketplace would

result.

B. Comments Concerning Products Covered by the Guides

The request for comment on the proposed Guides contained questions

related to (1) expansion of the Guides to include other types of

products made of leather or imitation leather and (2) any special

considerations for such products not addressed by the proposed Guides.

For the reasons discussed below, the Commission has decided not to

expand the Guides to cover additional types of products.

A number of comments received in response to the first Federal

Register notice concerning the three individual Guides addressed the

expansion issue. One comment said that a single set of guides should

cover all leather-using industries.9 Another stated that the

Guides could be generalized to many, if not all, industries.10

Leather Industries of America suggested that a set of leather

definitions be developed to apply to all finished goods.11 The

Luggage and Leather Goods Manufacturers of America stated, however,

that it did not endorse combining the Guides because of the special

circumstances in other industries.12 None of the second set of

comments concerning the proposed Guides expressed any views on whether

the Guides should be expanded to include additional products.

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\9\ CL, #10 at 1.

\10\ EK, #11 at 2.

\11\ LIA, #8 at 4-5.

\12\ LLGMA, #9 at 2.

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Other than the request for special consideration of footwear

contained in the Footwear Distributors and Retailers of America comment

discussed above, only one comment from the second set of comments

requested any special consideration for certain products. This comment

came from a company which supplies paper and cover products to the

bookbinding and looseleaf industry. The comment requested an exclusion

for material thinner than 10/1000th of an inch, provided that the

material is identified by some name which indicates the presence of

non-leather ingredients (the company suggests the term ``reinforced

bonded leather'') and that the material is used as covering

material.13 No such exclusion has been incorporated into the

Guides as adopted. The leather appearance of the product, rather than

its thickness, makes a representation to consumers. Further, as

addressed below, use of the term ``bonded leather'' is sanctioned by

the proposed Guides, provided that appropriate disclosures are made.

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\13\ EFI, #16 at 2.

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While there are some arguments for broadening the Guides, they are

not compelling. The record developed during this review does not

provide sufficient support to justify expansion of the Guides. There

are still many unanswered questions regarding the extent to which

misrepresentations are made in other industries, how

[[Page 51580]]

consumers would interpret the appearance of leather for products in

other industries, and whether there are special considerations for

other industries. Thus, the Commission has decided that the Guides

should not be expanded to cover additional products.14

Nevertheless, all industries which utilize leather and imitation

leather can obtain valuable guidance from the Guides. Because the

Guides are interpretive of laws enforced by the Commission, these

industries may obtain useful information from the Guides even though

they are not specifically covered. Further, although other industries

may not be within the coverage of the Guides, the Commission is in no

way prevented from otherwise taking action against a company engaged in

deceptive omissions.

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\14\ The provision concerning the scope of the Guides is

modified in that the term ``footwear'' is substituted for the

enumeration of footwear items.

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C. Suggested Changes to the Guides

A number of the comments received in response to the second request

for comment suggested that certain changes be made to the proposed

Guides. Generally, these suggestions fall into the following

categories: (1) Use of the term ``Leather,'' (2) Multi-material Shoes,

(3) Disclosure Requirements, (4) Concealed Innersoles, (5) Use of the

term ``Bonded Leather,'' (6) Use of the term ``Waterproof,'' and (7)

Deletion of Unnecessary Provisions.

1. Use of the Term ``Leather''

Split leather is the leather which results from the splitting of

hides or skins into two or more thicknesses, other than the grain or

hair side. Top grain leather is the grain or hair side. As published

for comment, the proposed Guides provided for use of the term

``leather'' only when the material is top grain leather. Originally,

the distinction was retained because of apparent differences between

the performance and appearance of top grain leather and that of split

leather, as well as possible consumer expectations with regard to these

materials. Upon further consideration, the Commission has decided that

the term ``leather'' would also be appropriate for split leather

products.

The European Union Directive 94/11/EC, which applies to footwear,

allows split leather to be called ``leather'' without

qualification.15 For this reason, two comments from the first set

of comments urged that the Guides be amended to allow split leather to

be called ``leather.'' 16 The comments suggested that

technological advances have resulted in a split leather which is

superior to that produced years ago. In support of preservation of the

Guides' distinction between top grain and split leather, however, one

of the first set of comments stated that split grain is less expensive,

less attractive, and less durable than top grain leather, and that

split leather is subject to ``crocking.'' 17 Another of that set

of comments stated that the Guides should continue to permit only top

grain leather to be called ``leather'' or ``genuine leather'' and that

other forms of leather should include qualifying words.18

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\15\ Under the European Union directive, leather which has a

surface coating thicker than 0.15 mm cannot be called ``leather.''

Leather with a surface coating which does not exceed one third of

the thickness of the material but is greater than 0.15 mm must be

referred to as ``coated leather.'' The proposed Guides do not

address coating materials because such materials were not addressed

in the original Guides, and there is insufficient record evidence

regarding practices in the United States upon which to base guidance

about coatings.

\16\ LIA, #8 at 4; FDRA, #12 at 3. FDRA restated this position

in its second comment.

\17\ FIA, #7 at 2. The comment stated that crocking is the

transfer of color from the surface of a colored material to an

adjacent area of the same material or to another surface,

principally by rubbing. In its second comment, Footwear Industries

of America again supported qualification of split leather because of

differences in the performance and appearance of split leather and

top grain leather.

\18\ CL, #10 at 1.

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One of the second set of comments reasoned that top grain leather

is in fact a split--albeit the top grain split--of a cowhide or sheep-

skin.19 Further, the comment stated that top grain leathers are

noted for their exceptionally low tear strength and structural

weakness. The comment also said that it could be argued that there is

no application where splits could not visually and physically replace

or substitute top grain leathers, but that the reverse would not apply.

The commenter stated that for use on the products its client

manufactures, appointment books and diaries, splits are preferable for

their strength characteristics and their blemish-free surface. Since

these products are enhanced by use of split leather, the comment states

that it would not be unfair or deceptive to represent that the products

are leather, but that it would detract from the marketing of the

products to refer to them as anything other than leather.20

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\19\ FFHSJ, #18 at 1.

\20\ Alternatively, the comment requested a clarification of the

scope of the Guides to make clear that the Guides do not apply to

the company's products.

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Rather than relying upon the performance characteristics of split

leather and top grain leather, the Commission believes that consumer

understanding and the messages conveyed to consumers should be the

focus in deciding whether to permit use of the term ``leather'' to

describe split leather. Footwear Distributors and Retailers of America

commented that there is no reason to assume that consumers distinguish

between top grain and split leather.21 Another comment requested

modification of the proposed Guides to accurately reflect consumer

acceptance of split leather.22 The Commission believes that it is

reasonable to assume that consumers do not perceive a distinction

between ``leather'' and ``split leather'' and that consumers do not

assume that ``leather'' means only ``top grain leather.'' Indeed, the

relevant definition of leather is the ``dressed or tanned hide of any

animal, usually with the hair removed.'' 23 If the Guides are

modified to allow split leather to be called ``leather,'' manufacturers

of top grain leather would be free to label their products as ``top

grain leather'' if they so choose. It is likely that a number of top

grain leather product manufacturers already label their products in

this manner. If consumers are aware of any difference in the quality of

various types of leather, the term ``top grain'' will likely convey

more useful information to consumers than will the term ``split.''

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\21\ FDRA2, #20 at 3.

\22\ FFHSJ, #18 at 1.

\23\ The American Heritage Dictionary, Houghton Mifflin Company,

Third Edition (1992).

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Based on the European Union position on split leather and the

representation that the Commission believes is made to consumers by use

of the term ``leather,'' the Commission deletes from the Guides the

provision stating that only top grain leather can be called leather

without qualification. Furthermore, the provision requiring disclosure

of the presence of split leather and other references to the term

``split leather'' are deleted.

2. Multi-Material Shoes

Footwear Distributors and Retailers of America suggested that the

proposed Guides should be more flexible with regard to multi-material

footwear.24 The proposed Guides stated that if all or part of a

shoe is non-leather with the appearance of leather, the general nature

of the material or the fact that the material is not leather should be

disclosed.25 The proposed Guides also stated that a product which

is made principally of leather but which has

[[Page 51581]]

non-leather parts with the appearance of leather may be described as

leather as long as there is a disclosure of the non-leather parts.

Given the current design of footwear, it may have been necessary in

order to comply with the proposed Guides to disclose the composition of

a number of different parts of a shoe. Such a lengthy disclosure may

have been cumbersome to manufacturers and confusing to consumers.

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\24\ FDRA2, #20 at 4.

\25\ Under the proposed Guides as published for comment, the

composition of heels, stiffenings, and ornamentation was not

considered when making the determination of whether a shoe, boot, or

slipper may be called ``leather.''

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The EU Directive on Footwear states that labels shall provide

information on only three parts of a shoe: the upper, the lining and

sock, and the outersole.26 The Commission believes that such a

limitation is appropriate to prevent costly and cumbersome disclosures.

Consequently, a footnote has been added to the Guides indicating that

footwear is considered to be composed of these three parts.

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\26\ The European Union Directive defines these three parts of a

shoe as follows: (1) the upper is the outer face of the structural

element which is attached to the outersole; (2) the lining and sock

are the lining of the upper and the insole, constituting the inside

of the footwear article; and (3) the outersole is the bottom part of

the footwear article subjected to abrasive wear and attached to the

upper.

According to the Directive, labels must disclose the material

which constitutes at least 80% of the surface area of the upper, 80%

of the surface area of the lining and sock, and at least 80% of the

volume of the outersoles. The Guides have not been modified to

conform with the European Union Directive with respect to the 80%

figure.

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Footwear Distributors and Retailers of America suggest allowing use

of a more flexible disclosure if a footwear part is composed of both

leather and non-leather materials. For example, if the majority of the

upper is leather, the following term would be used: ``leather and

manmade upper.'' If leather is not the majority of the material:

``upper of manmade and leather materials.'' Because such disclosures

would inform consumers that the upper of a shoe is not entirely leather

and would prevent deception, a footnote has been added to the Guides

which states that, with regard to footwear, it is sufficient to

disclose the presence of non-leather materials in the upper, the lining

and sock, or the outersole, provided that the disclosure is made

according to the predominance of materials. An example similar to the

one mentioned above has also been added.

3. Disclosure Requirements

People for the Ethical Treatment of Animals stated that its

members, because of their ethical concerns, need labels affixed to

products which accurately identify the material from which the product

is made. The organization suggests that all leather products be labeled

``Animals Suffered to Make This Product'' and that all non-leather

products be labeled ``Cruelty-free Product.'' The aim of the Guides is

to prevent misrepresentation of leather content. The disclosures

provided in the proposed Guides accomplish this goal. The disclosures

suggested by People for the Ethical Treatment of Animals are not

appropriate in the context of the Guides.

4. Concealed Innersoles

The proposed Guides currently state that shoes with visible parts

having the appearance of leather but containing non-leather concealed

innersoles should bear a disclosure of the composition of the

innersoles.27 Initially, the Commission believed that insufficient

evidence of consumer beliefs had been presented to warrant removal of

this provision. On further consideration, however, the Commission now

has decided that disclosure of the composition of concealed innersoles

is not needed.

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\27\ Concealed innersoles are the portion of a shoe hidden

between the liner and the outersole of a shoe.

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Comments from two trade associations addressed this issue. Footwear

Industries of America objected to the Guides' not being limited to

uppers and outersoles, the two main components of a shoe upon which the

association believes consumers base their purchasing decisions.28

The comment said that innersoles are typically covered with a sock

lining or insole sock which conceals the innersole and separates it

from the foot, so consumers are not deceived into thinking it is

leather. Footwear Distributors and Retailers of America argued that the

concealed innersole disclosure should be deleted given the absence of

any empirical evidence that consumers care about concealed

innersoles.29 The comment also said that consumers should not have

any expectations at all about a part of the shoe which is not seen.

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\28\ FIA2, #19 at 1. Footwear Industries of America also made

this argument in its first comment.

\29\ FDRA2, # 20 at 3. In its first comment, the organization

stated that the Guides should not apply to concealed innersoles

because consumers expect that the concealed portions of footwear

bottoms, particularly innersoles, are made of synthetic material.

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Footwear Industries of America stated that leather innersoles do

not guarantee better performance, and that leather is no longer being

used in this manner.30 The comment states that leather innersoles

crack and break during flexing movements due to the effects of

perspiration acids and humidity. The comment also estimates that less

than 1% of the 1.6 billion pairs of shoes sold annually in the U.S.

have a leather innersole, and that most are cellulose board. The

association also provided information to indicate that cellulose board

can outperform leather in a number of respects, including dimensional

stability, porosity, and thermal conductivity.31 The information

provided also indicates that the material is lighter in weight than

leather and has a lower Ph factor than leather.

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\30\ FIA2, #19 at 2.

\31\ FIA5, #19 at 1.

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As discussed above, with regard to footwear, the coverage of the

Guides has been limited to the three main parts of footwear. Therefore,

the provision regarding concealed innersoles has been deleted. A

concealed innersole does not make any implied representation to

consumers and, therefore, no disclosure of the content of concealed

innersoles is necessary.32

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\32\ As indicated above, the European Union Directive does not

apply to concealed innersoles.

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5. Use of the Term ``Bonded Leather''

In drafting the proposed Guides, the Commission considered a number

of comments concerning use of the term ``bonded leather,'' which

generally refers to material made of leather fibers held together with

a bonding agent. Although the original three Guides did not mention the

term ``bonded leather,'' they addressed this type of material, which is

also called ``ground leather,'' ``pulverized leather,'' or ``shredded

leather.'' The Shoe Content Guides and the Ladies' Handbag Guides

allowed either a disclosure stating that the material is simulated or

imitation leather or that the material is ground, pulverized, or

shredded leather. The Luggage Guides stated that an accurate

representation as to the ground, pulverized or shredded leather content

of the material could be made, but that if the material had the

appearance of being leather a disclosure must be made in accordance

with the imitation leather provision of the Luggage Guides. The example

given in the Luggage Guides contains a disclosure that shredded leather

fibers are contained in the material, but that rubber adhesive and

vinyl are also contained in the material. The Luggage Guides provide

that consumers should be made aware of the different components in this

type of material. The history of this issue was considered in drafting

the proposed Guides, which state that if the term ``bonded leather'' is

used (or if similar terms such as ``ground leather,'' ``pulverized

leather,'' or ``shredded leather'' are used), a disclosure of the

percentage of leather fiber and of the

[[Page 51582]]

percentage of non-leather substances contained in the product should be

made.

One of the comments expressed support for the proposed Guides'

treatment of this issue.33 Another comment suggested that this

material should be called ``reinforced bonded leather'' rather than

simply ``bonded leather'' in order to put the public on notice that

there are other ingredients in the material.34 A comment regarding

the Waist Belt Rule suggested that the term ``bonded leather'' should

be permitted to be used unconditionally.35 The Commission

concludes, however, that use of the terms ``bonded leather'' or

``reinforced bonded leather'' without further information is likely to

confuse consumers as to leather content, and the best way to avoid such

confusion is to include the disclosures as provided by the Guides.

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\33\ FIA2, #19 at 1.

\34\ EFI, #16 at 2.

\35\ HI2, #24 at 1.

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Another commenter supported using the term ``bonded leather'' but

did not think the additional content information as provided by the

Guides was the best solution.36 Cromwell Leather believed that a

qualifying word before the term ``leather'' (such as ``bonded'' or

``split'') will keep the Guides simple, yet effective, and suggests

that ongoing education will increase consumer understanding of the

qualifying terms. The comment stated that the proposed Guides'

disclosure requirement for bonded leather will create additional costs

and cause confusion because some manufacturers get bonded leather from

more than one supplier. The company believes there should be a 75%

leather fiber minimum for use of the term ``bonded leather'' (without

further qualification). The comment states that there is widespread

industry agreement on the 75% figure.

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\36\ CL2, #21 at 1.

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As discussed in response to the first set of comments, however,

even if the 75% figure were an industry practice or standard, it would

not prevent deception. In one of the original comments regarding the

Waist Belt Rule, consumer survey evidence was provided in support of

use of the term ``bonded leather.'' 37 The data provided indicates

that some consumers may be misled by use of the term. Further, the term

may be interpreted to mean that the material is of greater quality than

leather,38 or is strengthened or reinforced leather. Without the

qualifying information contained in the Guides, the term ``bonded

leather'' may not inform consumers that non-leather fibers are

contained in the material.

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\37\ HI, #14, part 6.

\38\ EK, #11 at 3 and letter dated February 3, 1964, to the

Commission from counsel for the Tanners' Council of America at 10-

11.

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The ecological benefits of using the term ``bonded leather''

(namely, encouraging the use of leather scrap or recycled leather

fiber) are also addressed in the second set of comments. One of the

comments urges the Commission to reconsider the decision not to require

a minimum leather content for use of the term ``bonded leather''

because ecological benefits are subverted.39 Another comment

urging a minimum threshold for use of the term stated that permitting

any amount of leather fibers to be called ``bonded leather'' may

diminish the use of recycled leather fibers and reverse the ecological

progress the industry has made.40 Whether recycling goals are

affected by use of the term ``bonded leather'' or not, consumers should

be made aware of the contents of such material.

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\39\ LIA2, # 17 at 1.

\40\ CL2, #21 at 2.

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One of the second set of comments urged the Commission to require a

minimum leather content for use of the term ``bonded leather'' since

consumers may not read fine print.41 The Guides already contain a

provision regarding the form of disclosures which should prevent any

``fine print'' from being used to mislead consumers. This provision

states that the disclosures affixed to products and made in advertising

should be conspicuous and clear and should be in close conjunction with

the representation necessitating the disclosure.

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\41\ LIA2, #17 at 1.

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In summary, the Commission believes that consumers should be made

aware of the contents of bonded leather and similar materials. The

Guides' treatment of this issue accomplishes this objective. One change

has been made to the ``bonded leather'' provision. The term

``reconstituted leather'' has been added to the section concerning use

of the terms ground, pulverized, shredded, and bonded leather.

Apparently, this term is often used interchangeably with ``bonded

leather.''

6. Use of the Term ``Waterproof''

A number of comments expressed concern about the provision in the

proposed Guides which relates to the term ``waterproof'' because the

Guides provide for use of the term only if an item is impermeable to

water.42 The comments argue that a product can be waterproof

without being totally impermeable to water. New technology waterproofs

leather by chemically modifying the leather fibers. Use of this

material in footwear allows air molecules to pass through while

preventing larger water molecules from reaching the foot. Total

impermeability is not desirable since the ability of leather to breathe

is a form of permeability. Leather Industries of America proposed the

following modification:

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\42\ LLGMA2, #24 at 1, LIA3, #17 at 1, LIA4, #17 at 1, FIA4, #19

at 1.

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It is unfair or deceptive to:

(a) Use the term ``Waterproof'' to describe all or part of an

industry product unless the designated product or material prevents

water from contact with its contents under normal conditions of

intended use during the anticipated life of the product or

material.43

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\43\ LIA3, #17 at 1. Footwear Industries of America and Luggage

and Leather Goods Manufacturers of America each submitted a somewhat

similar proposal, without reference to the anticipated life of the

product.

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Due to changes in technology and consumer acceptance of the modern

waterproofing methods, the waterproof provision has been modified as

contained in Leather Industries of America's suggestion.

7. Deletion of Unnecessary Provisions

The proposed Guides stated that it is unfair or deceptive to

misrepresent that a product is colored, finished, or dyed with aniline

dye. One of the comments expressed concern about this provision.44

Leather Industries of America stated that ``aniline leather'' is

universally used in the industry in a non-chemical sense to describe

leather that is finished without pigment coverage. The association

believes that the term does not imply that the leather has been dyed

with an aniline dye, only that the finish is clear and contains no

pigment. Because the term ``aniline'' now refers to a clear finish

which allows the surface to be seen, the Commission has removed the

provision in the proposed Guides relating to aniline dye.

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\44\ LIA2 at 1.

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The same provision also deals with misrepresentations that a

product is dyed, embossed, grained, processed, finished, or stitched in

a certain manner. Such misrepresentations would fall within the general

deception provision and do not need to be contained in a specific

provision.

Although no comments were received regarding the ``fictitious

animal'' provision in the proposed Guides, this provision has also been

deleted. Any representation that a product is made from the skin or

hide of an animal that

[[Page 51583]]

does not exist would clearly fall within the general deception

provision of the Guides.

III. Conclusion

A number of changes to the Guides have been made based upon the

second set of comments. The final Guides incorporate the following

modifications:

--The scope of the Guides has been modified to use the term

``footwear'' instead of a list of footwear items, and the term

``footwear'' is used as appropriate throughout the Guides.

--The provision stating that only top grain leather can be called

leather without qualification is modified. The provision requiring

disclosure of the presence of split leather and other references to the

term ``split leather'' have been deleted.

--The provision regarding concealed innersoles has been deleted.

--With regard to footwear, the Guides have been modified to state that

for purposes of the Guides, footwear is composed of three parts: the

upper, the lining and sock, and the outersole. A footnote has been

added which says that with regard to footwear, it is sufficient to

disclose the presence of non-leather materials in the upper, the lining

and sock, or the outersole, provided that the disclosure is made

according to predominance of materials.

--The term ``reconstituted leather'' has been added to the provision

dealing with use of the terms ground, pulverized, shredded, or bonded

leather.

--The provision concerning use of the term ``waterproof'' has been

modified to allow the term to be used if a product or material prevents

water from contact with its contents under normal conditions of

intended use during the anticipated life of the product or material.

--The provision relating to misrepresentation that a product has been

dyed with aniline dye and other specific misrepresentations has been

deleted.

--The ``fictitious animal'' provision has been deleted as unnecessary.

List of Subjects in 16 CFR Part 24

Advertising, Clothing, Distribution, Footwear, Imitation-leather

products, Labeling, Ladies' handbags, Leather and leather products

industry, Luggage and related products, Shoes, Trade practices, Waist

belts.

Accordingly, 16 CFR Part 24 is added to read as follows:

PART 24--GUIDES FOR SELECT LEATHER AND IMITATION LEATHER PRODUCTS

Sec.

24.0 Scope and purpose of guides.

24.1 Deception (general).

24.2 Deception as to composition.

24.3 Misuse of the terms ``waterproof,'' ``dustproof,''

``warpproof,'' ``scuffproof,'' ``scratchproof,'' ``scuff

resistant,'' or ``scratch resistant.''

Authority: 15 U.S.C. 45, 46.

Sec. 24.0 Scope and purpose of guides.

(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.

Sec. 24.1 Deception (general).

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.

Sec. 24.2 Deception as to composition.

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:

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\1\ For purposes of these Guides, footwear is composed of three

parts: the upper, the lining and sock, and the outersole. These

three parts are defined as follows: (1) The upper is the outer face

of the structural element which is attached to the outersole; (2)

the lining and sock are the lining of the upper and the insole,

constituting the inside of the footwear article; and (3) the

outersole is the bottom part of the footwear article subjected to

abrasive wear and attached to the upper.

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(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

[[Page 51584]]

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:

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\2\ With regard to footwear, it is sufficient to disclose the

presence of non-leather materials in the upper, the lining and sock,

or the outersole, provided that the disclosure is made according to

predominance of materials. For example, if the majority of the upper

is composed of manmade material: Upper of manmade materials and

leather.

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(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.

Sec. 24.3 Misuse of the terms ``waterproof,'' ``dustproof,''

``warpproof,'' ``scuffproof,'' ``scratchproof,'' ``scuff resistant,''

and ``scratch resistant.''

It is unfair or deceptive to:

(a) Use the term ``Waterproof'' to describe all or part of an

industry product unless the designated product or material prevents

water from contact with its contents under normal conditions of

intended use during the anticipated life of the product or material.

(b) Use the term ``Dustproof'' to describe an industry product

unless the product is so constructed that when it is closed dust cannot

enter it.

(c) Use the term ``Warpproof'' to describe all or part of an

industry product unless the designated product or part is such that it

cannot warp.

(d) Use the term ``Scuffproof,'' ``Scratchproof,'' or other terms

indicating that the product is not subject to wear in any other

respect, to describe an industry product unless the outside surface of

the product is immune to scratches or scuff marks, or is not subject to

wear as represented.

(e) Use the term ``Scuff Resistant,'' ``Scratch Resistant,'' or

other terms indicating that the product is resistant to wear in any

other respect, unless there is a basis for the representation and the

outside surface of the product is meaningfully and significantly

resistant to scuffing, scratches, or to wear as represented.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 96-25358 Filed 10-2-96; 8:45 am]

BILLING CODE 6750-01-P