[Federal Register Volume 61, Number 73 (Monday, April 15, 1996)]
[Rules and Regulations]
[Pages 16385-16387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9274]



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FEDERAL TRADE COMMISSION

16 CFR Part 303


Rules and Regulations Under the Textile Fiber Products 
Identification Act

AGENCY: Federal Trade Commission.

ACTION: Notice of final rulemaking.

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SUMMARY: On December 6, 1995, the Federal Trade Commission 
(``Commission'') initiated a notice-and-comment rulemaking proceeding 
by publishing a Notice of Proposed Rulemaking in the Federal Register 
to solicit comment on whether Rule 7(d) of the Rules and Regulations 
Under the Textile Fiber Products Identification Act should be amended 
to allow use of the name ``lyocell'' as an alternative to the generic 
name ``rayon'' for a specific subclass of rayon fibers defined in the 
proposed amendment. The Commission has analyzed the record developed 
during that proceeding and has concluded that the lyocell subclass has 
sufficiently different characteristics from other rayons to justify use 
of the term ``lyocell'' as an alternative to the generic name ``rayon'' 
for that subclass. The Commission announces, therefore, that Textile 
Rule 7(d) will be amended. The amendment will allow the use of the term 
``lyocell'' as a generic name on disclosures required by the Textile 
Act for fibers that meet the definition of lyocell in the amendment. 
This Notice summarizes the comments received in response to the 
December 6, 1995, Notice of Proposed Rulemaking and sets out the 
Commission's final action in this matter.

EFFECTIVE DATE: May 15, 1996.

FOR FURTHER INFORMATION CONTACT:
Bret S. Smart, Program Advisor, Los Angeles Regional Office, Federal 
Trade Commission, 11000 Wilshire Boulevard, #13209, Los Angeles, CA 
90024, (310) 235-4040.

SUPPLEMENTARY INFORMATION: 

I. Background

    Rule 6 \1\ of the Rules and Regulations under the Textile Fiber 
Products Identification Act (``Textile Act'') \2\ requires use of 
generic names of the fibers contained in textile fiber products in 
making required disclosures of the fiber content of the products. Rule 
7 \3\ sets forth the generic names and definitions that the Commission 
has established for manufactured fibers. Rule 8 \4\ sets forth the 
procedures for establishing new generic names for manufactured fibers.
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    \1\ 16 CFR 303.6.
    \2\ 15 U.S.C. 70, et seq.
    \3\ 16 CFR 303.7.
    \4\ 16 CFR 303.8.
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    On January 27, 1992, Courtaulds Fibers, Inc. (``Courtaulds'') 
applied to the Commission requesting establishment of a new generic 
name and definition for a fiber it manufactures. It recommended 
``lyocell'' be adopted as the new generic name for this fiber. In its 
application, Courtaulds stated that this cellulosic fiber differs in 
kind and chemical structure from any of the existing fiber definitions 
of Rule 7.\5\
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    \5\ Courtaulds' application and related materials have been 
placed on the rulemaking record.
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    After an initial analysis, the Commission granted Courtaulds the 
designation ``CF0001'' for temporary use in identifying the fiber until 
final disposition of the application.
    Courtaulds' application and other related documents and materials 
describe the lyocell fiber, its manufacture, and possible uses as 
follows:

    Lyocell fiber results from the dissolution of cellulose into an 
aqueous solution of N-methyl morpholine oxide and the precipitation 
of the fiber out of solution. This process is unique among methods 
used to manufacture other existing rayons. As a result, the 
molecular structure of lyocell fiber is radically different from 
that of other rayons in that it has a substantially higher degree of 
polymerization and greater crystallinity. These differences induce 
high wet and dry tenacity as well as high initial wet modulus

[[Page 16386]]

in lyocell fiber. Consequently, garments made from the fiber are 
highly resistant to shrinkage and wrinkling and therefore do not 
require dry-cleaning, unlike other rayons.

    Based on its review of Courtaulds' application and related 
materials, the Commission solicited comments in its December 6, 1995, 
Notice of Proposed Rulemaking \6\ on a proposed amendment to the Rule 
7(d) definition of rayon.\7\ The proposed amendment would add the 
following sentence:

    \6\ 60 FR 62352 (Dec. 6, 1995).
    \7\ Rule 7(d) (16 CFR 303.7(d)) currently defines ``rayon'' as, 
``a manufactured fiber composed of regenerated cellulose, as well as 
manufactured fibers composed of regenerated cellulose in which 
substituents have replaced not more than 15% of the hydrogens of the 
hydroxyl groups.''
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    Where the fiber is composed of cellulose precipitated from an 
organic solution in which no substitution of the hydroxyl groups 
takes place and no chemical intermediates are formed, the term 
lyocell may be used as a generic description of the fiber.

    The effect of this proposed amendment would be to allow use of the 
name ``lyocell' as an alternative to the generic name ``rayon'' for the 
subclass of fibers meeting the criteria contained in the proposed 
second sentence.\8\
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    \8\ Within the established 21 generic names for manufactured 
fibers, there are currently two cases where such generic name 
alternatives may be used. Pursuant to Rule 7(e) (16 CFR 303.7(e)), 
within the generic category ``acetate,'' the term ``triacetate'' may 
be used as an alternative generic description for a specifically 
defined subclass of acetate fiber. Pursuant to Rule 7(j) (16 CFR 
303.7(j)), within the generic category ``rubber,'' the term 
``lastrile'' may be used as an alternative generic description for a 
specifically defined subclass of rubber fiber.
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    In the Notice of Proposed Rulemaking, the Commission took the 
opportunity to clarify its 1973 statement of policy concerning the 
criteria by which it will decide the disposition of applications filed 
under Rule 8.\9\ The Notice of Proposed Rulemaking stated as follows:

    \9\ In 1973 the Commission summarized its policy for adopting 
generic fiber names, as follows:
    [T]he Commission, in the interest of elucidating the grounds on 
which it has based this decision and shall base future decisions as 
to the grant of generic names for textile fibers, sets out the 
following criteria for grant of such generic names.
    1. The fiber for which a generic name is requested must have a 
chemical composition radically different from other fibers, and that 
distinctive chemical composition must result in distinctive physical 
properties of significance to the general public.
    2. The fiber must be in active commercial use or such use must 
be immediately foreseen.
    3. The grant of the generic name must be of importance to the 
consuming public at large, rather than to a small group of 
knowledgeable professionals such as purchasing officers for large 
Government agencies.
    The Commission believes it is in the public interest to prevent 
the proliferation of generic names, and will adhere to a stringent 
application of the above-mentioned criteria in consideration of any 
future applications for generic names and in a systematic review of 
any generic names previously granted which no longer meet these 
criteria.
    (See 38 FR 34114, November 12, 1973.)
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    As exemplified by today's action and reflected in this notice, 
the Commission generally reaffirms its 1973 criteria. In addition, 
it notes that where appropriate, in considering application for new 
generic names for fibers that are of the same general chemical 
composition as those for which a generic name already has been 
established, rather than of a chemical composition that is radically 
different, but that have distinctive properties of importance to the 
general public as a result of a new method of manufacture or their 
substantially differentiated physical characteristics, such as their 
fiber structure, it may allow such fiber to be designated in 
required information disclosures by either its generic name, or 
alternatively, by its ``subclass'' name. The Commission will 
consider this disposition when the distinctive feature or features 
of the subclass fiber make it suitable for uses for which other 
fibers under the established generic name would not be suited or 
would be significantly less well suited.

    Based on the information available to it at the time comments were 
solicited, the Commission further stated in the Notice of Proposed 
Rulemaking as follows:

    The Commission believes that Courtaulds' current application 
describes a subclass of generic rayon fibers with significant 
distinctions to consumers resulting from physical characteristics of 
the fiber and its new mode of manufacture that meet the above 
standard for allowing designation by the subclass name ``lyocell.''

II. Summary and Analysis of Comments

A. Summary

    There were twenty-seven comments submitted in this proceeding.\10\ 
Twenty-six of these were one page in length and generally expressed 
support for the Commission's proposed amendment to Rule 7(d). Nearly 
half of the comments additionally stated that lyocell has significantly 
different characteristics from other rayons. Among these letters was 
one from the Austrian company, Lenzing AG. Describing itself as ``the 
world's leading producer of viscose staple fiber,'' Lenzing AG 
commented as follows:

    \10\ Los Angeles Dye & Denim Finish, Inc. (1), Parkdale Mills, 
Inc. (2), JPS Converter and Industrial Corp. (3), Lee Company (4), 
New Cherokee Corporation (5), Horizon Textiles Corp. (6), Ge-Ray 
Fabrics, Inc. (7), Burlington Madison Yarn Company (8), Greenwood 
Mills, Inc. (9), Dixie Yarns, Inc. (10), Stonecutter Mills 
Corporation (11), Burlington Industries, Inc. (12), New Cherokee 
Corporation (13), Milliken (14), David Dart (15), Burlington Denim 
(16), Threads USA (17), Threads USA (18), Dan River, Inc. (19), 
Lenzing AG (20), Milliken (21), Milliken (22), Guilford Mills, Inc. 
(23), American Fiber Manufacturers Association, Inc. (24), Springs 
(25), Eileen Fisher (26), Allied Tube & Conduit Corporation (27).
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    [Lenzing] welcomes and supports the FTC's proposal to add 
``lyocell'' to the list of approved generic names.
    Lenzing AG has developed a lyocell fiber and currently operates 
a small scale pilot plant. A commercial scale plant of 24,000 tonnes 
a year is under construction, but already before its completion mid 
1997 will the fiber be marketed in the USA under the trade name 
``Lyocell by Lenzing.''
    The decision for a new cellulosic fiber technology has been 
taken because of the unique and significantly different 
characteristics that differentiate ``lyocell'' clearly from rayon 
and/or viscose. We feel strongly that the consumer will actively 
seek the inherent fiber properties and a clear reference to 
``lyocell'' in the fiber content label of a textile product will be 
appreciated.\11\

    \11\ Lenzing AG (20) p.1.
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    The American Fiber Manufacturers Association, Inc. (``AFMA'') 
submitted a two-page letter with thirteen pages of attachments. The 
letter states as follows:

    AFMA is the domestic trade association for the U.S. manufactured 
fiber industry. The Association's membership is comprehensive with 
eighteen members accounting for more than 90 percent of the U.S. 
production of synthetic and cellulosic fiber. The Association's 
basic policy is to oppose the proliferation of generic fiber names, 
except where there is a clear and compelling rationale--which we 
believe exists in the case of lyocell.\12\
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    \12\ American Fiber Manufacturers Association, Inc. (24) p.1.
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B. Analysis

    The Commission has considered the comments and all other 
information available to it in this matter. It concludes that, as a 
result of its physical characteristics and mode of manufacture, 
``lyocell'' fiber is a subclass of generic ``rayon'' with significant 
distinctions to consumers (e.g., washability). The Commission further 
concludes that it is in the public interest to amend Rule 7(d) to 
define the ``lyocell'' subclass and to allow use of the name 
``lyocell'' as an alternative to the generic name ``rayon'' for that 
subclass of fiber.
    The temporary designation ``CF0001'' previously assigned 
Courtaulds' fiber for temporary use is hereby revoked as of the 
effective date of this amendment.

III. Regulatory Flexibility Act

    In publishing the proposed amendment, the Commission certified, 
subject to subsequent public comment, that the proposed amendment, if 
promulgated, would not have a significant economic impact on a 
substantial number of small entities and, therefore, that the 
provisions of the Regulatory Flexibility Act,\13\ requiring

[[Page 16387]]

an initial regulatory analysis, did not apply.\14\ In considering the 
economic impact of the proposed amendment on manufacturers and 
retailers, the Commission noted that the amendment would impose no 
obligations, penalties or costs, in part because the amendment simply 
provides an additional, alternative method of complying with existing 
rules. Use of the new alternative is voluntary. The Commission 
nonetheless requested comment on the effects of the proposed amendment 
on costs, profitability, competitiveness, and employment in small 
entitles, in order not to overlook any substantial economic impact that 
would warrant a final regulatory flexibility analysis.\15\
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    \13\ 5 U.S.C. 605(b).
    \14\ 60 FR 62352, 62354 (Dec. 6, 1995).
    \15\ Id.
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    Despite the explicit request by the Commission for comment on the 
impact of the amendment on small entities, and the receipt of twenty-
seven comments from a variety of industry members, including the 
association that represents the producers of over 90% of U.S. fiber, no 
comments were received on this aspect of the rulemaking. The uniform 
silence on this issue supports the Commission's tentative conclusion 
contained in the Notice of Proposed Rulemaking. Accordingly, on the 
basis of all the information before it, the Commission has determined 
that the final amendment will not have a sufficiently significant 
economic impact on a substantial number of small entities to warrant a 
final regulatory flexibility analysis under the Regulatory Flexibility 
Act. The notice serves as certification to that effect to the Small 
Business Administration.

IV. Paperwork Reduction Act

    This amendment does not constitute a ``collection of information'' 
under the Paperwork Reduction Act \16\ and the implementing regulations 
of the Office of Management and Budget (``OMB'').\17\
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    \16\ 44 U.S.C. 3501 et seq.
    \17\ 5 CFR 1320.7(c).
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    The generic name petition requests have already been submitted to 
the OMB and have been assigned a control number, 3084-0047.

List of Subjects in 16 CFR Part 303

    Labeling, Textiles, Trade practices.

PART 303--RULES AND REGULATIONS UNDER THE TEXTILE FIBER PRODUCTS 
IDENTIFICATION ACT

    Accordingly, after consideration of the views, arguments and data 
submitted pursuant to the Notice of Proposed Rulemaking in this matter, 
and in consideration of other pertinent information and material 
available to the Commission, the Commission has determined to amend 16 
CFR Part 303, Rules and Regulations under the Textile Fiber Products 
Identification Act, in the manner set forth below:
    1. The authority citation for Part 303 continues to read as 
follows:

    Authority: Sec. 7(c) of the Textile Fiber Products 
Identification Act, 15 U.S.C. 70e(c); Sec. 553 of the Administrative 
Procedure Act, 5 U.S.C. 553.


Sec. 303.7  [Amended]

    2. Section 303.7(d), Generic Names and Definitions for Manufactured 
Fibers, of 16 CFR Part 303 is hereby revised to read as follows:


Sec. 303.7  Generic names and definitions for manufactured fibers.

* * * * *
    (d) Rayon--a manufactured fiber composed of regenerated cellulose, 
as well as manufactured fibers composed of regenerated cellulose in 
which substituents have replaced not more than 15% of the hydrogens of 
the hydroxyl groups. Where the fiber is composed of cellulose 
precipitated from an organic solution in which no substitution of the 
hydroxyl groups takes place and no chemical intermediates are formed, 
the term lyocell may be used as a generic description of the fiber.
* * * * *
    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 96-9274 Filed 4-12-96; 8:45 am]
BILLING CODE 6750-01-M