In the Matter of Automotive Breakthrough Sciences, Inc., et al.

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:: Robert Pitofsky, Chairman; Sheila F. Anthony; Mozelle W. Thompson; Orson Swindle

In the Matter of

AUTOMOTIVE BREAKTHROUGH SCIENCES, INC., and
ABS TECH SCIENCES, INC. corporations, and
RICHARD SCHOPS, individually and as an officer and director of said corporations

DOCKET NO. 9275

FINAL ORDER

DEFINITIONS

For the purposes of this Order:

1. "Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based upon the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results; and

2. "Purchasers for resale" shall mean all purchasers of A•B•S/Trax or A•B•S/Trax² for resale to the public, including but not limited to franchisees, wholesalers, distributors, retailers, installers, and jobbers.

IT IS ORDERED that respondents, Automotive Breakthrough Sciences, Inc. and ABS Tech Sciences, Inc., corporations, their successors and assigns, and their officers, and Richard Schops, individually and as an officer and director of said corporations, and respondents' agents, representatives, and employees, directly or through any partnership, corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of A•B•S/Trax, A•B•S/Trax² or any substantially similar product in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from employing the initials or term "ABS" in conjunction with, or as part of the name for, such product or the product trademark.

II.

IT IS FURTHER ORDERED that respondents, Automotive Breakthrough Sciences, Inc. and ABS Tech Sciences, Inc., corporations, their successors and assigns, and their officers, and Richard Schops, individually and as an officer and director of said corporations, and respondents' agents, representatives, and employees, directly or through any partnership, corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of A•B•S/Trax, A•B•S/Trax² or any substantially similar product in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, in any manner, directly or by implication, that such product:

A. Is an antilock braking system;
: B. Prevents or substantially reduces wheel lock-up, skidding, or loss of steering control in emergency stopping situations;
: C. Will qualify a vehicle for an automobile insurance discount in a significant proportion of cases;
: D. Complies with a performance standard set forth in Wheel Slip Brake Control System Road Test Code SAE J46;
: E. Complies with a standard pertaining to antilock braking systems set forth by the National Highway Traffic Safety Administration;
: F. Has been proven in tests to reduce stopping distances by at least 30% when the vehicle's brakes are applied at a speed of 60 mph; or
: G. Provides antilock braking system benefits, including wheel lock-up control benefits, that are at least equivalent to those provided by original equipment manufacturer electronic antilock braking systems.

III.

A. In emergency stopping situations, a vehicle equipped with the system, accessory, or device will stop in a shorter distance than a vehicle that is not equipped with the system, accessory, or device; or
: B. Installation of the system, accessory, or device will make operation of a vehicle safer than a vehicle that is not equipped with the system, accessory, or device;

unless, at the time of making such representation, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

IV.

A. The contents, validity, results, conclusions, or interpretations of any test or study;
: B. The compliance of any such product with any standard, definition, regulation, or any other provision of any governmental entity or unit, or of any other organization; or
: C. The availability of insurance benefits or discounts arising from the use of such product.

IT IS FURTHER ORDERED that respondents Automotive Breakthrough Sciences, Inc. and ABS Tech Sciences, Inc., corporations, their successors and assigns, and their officers, and Richard Schops, individually and as an officer and director of said corporations, and respondents' agents, representatives, and employees, directly or through any partnership, corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any braking system, accessory, or device, or any other system, accessory, or device designed to be used in, on, or in conjunction with any motor vehicle, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from making any representation, directly or by implication, regarding the absolute or comparative attributes, efficacy, performance, safety, or benefits of such system, accessory, or device, unless such representation is true and, at the time of making such representation, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

VI.

IT IS FURTHER ORDERED that respondents Automotive Breakthrough Sciences, Inc. and ABS Tech Sciences, Inc., corporations, their successors and assigns, and Richard Schops shall:

A. Within forty-five days after the date this Order becomes final, compile a current mailing list containing the names and last known addresses of all purchasers of A•B•S/Trax or A•B•S/Trax² since January 1, 1990. Respondents shall compile the list by:

1. Searching their own files for the names and addresses of such purchasers; and

2. Using their best efforts to identify any other such purchasers, including but not limited to sending by first class certified mail, return receipt requested, within five days after the date this Order becomes final, to all of the purchasers for resale with which respondents have done business since January 1, 1990, an exact copy of the notice attached hereto as Appendix A. The mailing shall not include any other documents. In the event that any such purchaser for resale fails to provide any names or addresses of purchasers in its possession, respondents shall provide the names and addresses of all such purchasers for resale to the Federal Trade Commission within forty-five days after the date this Order becomes final.

3. In addition, respondents shall retain a National Change of Address System ("NCOA") licensee to update this list by processing the list through the NCOA database.

: B. Within sixty days after the date this Order becomes final, send by first class mail, postage prepaid, to the last address known to respondents of each purchaser of A•B•S/Trax or A•B•S/Trax² identified on the mailing list compiled pursuant to subparagraph A of this Part, an exact copy of the notice attached hereto as Appendix B. The mailing shall not include any other documents. The envelope enclosing the notice shall have printed thereon in a prominent fashion the phrases "FORWARDING AND RETURN POSTAGE GUARANTEED" and "IMPORTANT NOTICE--U.S. GOVERNMENT ORDER ABOUT A•B•S/TRAX or A•B•S/TRAX² BRAKING DEVICE."
: C. Send the mailing described in subparagraph B of this Part to any person or organization not on the mailing list prescribed in subparagraph A of this Part about whom respondents later receive information indicating that the person or organization is likely to have been a purchaser of A•B•S/Trax or A•B•S/Trax², and to any purchaser whose notification letter is returned by the U.S. Postal Service as undeliverable and for whom respondents thereafter obtain a corrected address. The mailing required by this subpart shall be made within ten (10) days of respondents' receipt of a corrected address or information identifying each such purchaser.
: D. In the event respondents receive any information that, subsequent to its receipt of Appendix A, any purchaser for resale is using or disseminating any advertisement or promotional material that contains any representation prohibited by this Order, immediately notify the purchaser for resale that respondents will terminate the use of said purchaser for resale if it continues to use such advertisement or promotional material.
: E. Terminate within ten days the use of any purchaser for resale about whom respondents receive any information that such purchaser for resale has continued to use any advertisement or promotional material that contains any representation prohibited by this Order after receipt of the notice required by subparagraph A of this Part.

VII.

IT IS FURTHER ORDERED that respondents Automotive Breakthrough Sciences, Inc. and ABS Tech Sciences, Inc., corporations, and Richard Schops shall for five years after the last correspondence to which they pertain, maintain and upon request make available to the Federal Trade Commission or its staff for inspection and copying:

A. The list compiled pursuant to subparagraph A of Part VI of this Order;
: B. Copies of all notification letters sent to purchasers pursuant to subparagraphs B and C of Part VI of this Order;
: C. Copies of notification letters sent to purchasers for resale pursuant to subparagraphs A and D of Part VI of this Order, and all other communications with purchasers for resale relating to the notices required by Part VI of this Order.

VIII.

IT IS FURTHER ORDERED that for five years after the last date of dissemination of any representation covered by this Order, respondents, or their successors or assigns, shall maintain and upon request make available to the Federal Trade Commission or its staff for inspection and copying:

A. All materials that were relied upon in disseminating such representation; and
: B. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question such representation, or the basis relied upon for such representation, including complaints from consumers, and complaints or inquiries from governmental organizations.

IX.

IT IS FURTHER ORDERED that respondents Automotive Breakthrough Sciences, Inc. and ABS Tech Sciences, Inc., their successors and assigns, shall:

A. Within thirty days after this Order becomes final, provide a copy of this Order to each of respondents' current principals, officers, directors, and managers, and to all personnel, agents, and representatives having sales, advertising, or policy responsibility with respect to the subject matter of this Order; and
: B. For a period of ten years from the date this Order becomes final, provide a copy of this Order to each of respondents' future principals, officers, directors, and managers, and to all personnel, agents, and representatives having sales, advertising, or policy responsibility with respect to the subject matter of this Order, within three days after the person assumes his or her position.

IT IS FURTHER ORDERED that respondents Automotive Breakthrough Sciences, Inc., and ABS Tech Sciences, Inc., their successors and assigns, shall notify the Commission at least thirty (30) days prior to any proposed change in the corporations such as a dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations under this Order.

XI.

IT IS FURTHER ORDERED that respondent Richard Schops shall, for a period of ten (10) years from the date this Order becomes final, notify the Commission within thirty days of the discontinuance of his present business or employment and of his affiliation with any new business or employment. Each notice of affiliation with any new business or employment shall include respondent's new business address and telephone number, current home address, and a statement describing the nature of the business or employment and his duties and responsibilities.

XII.

IT IS FURTHER ORDERED that this Order will terminate twenty years from the date it becomes final, or twenty years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any paragraph in this Order that terminates in less than twenty years;
: B. This Order's application to any respondent that is not named as a defendant in such complaint; and
: C. This Order if such complaint is filed after the Order has terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Order will terminate according to this paragraph as though the complaint was never filed, except that the Order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

XIII.

IT IS FURTHER ORDERED that respondents shall, within sixty days after the date this Order becomes final, and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form of their compliance with this Order.

By the Commission.

Donald S. Clark
Secretary

Issued: September 9, 1998

Seal

Attachment: Opinion of the Commission