| **9823587    B254576**

**UNITED STATES OF AMERICA    FEDERAL TRADE COMMISSION**

*In the Matter of*

USDRIVES CORPORATION, a corporation

DOCKET NO. C-3866

**COMPLAINT**

The Federal Trade Commission, having reason to believe that USDrives Corporation    ("respondent") has violated the provisions of the Federal Trade Commission Act,    and it appearing to the Commission that this proceeding is in the public interest,    alleges:

1. Respondent USDrives Corporation is a California corporation with its principal    office or place of business at 850 Auburn Court, Fremont, California 94538.

2. Respondent has manufactured, advertised, labeled, offered for sale, sold, and    distributed products to the public, including optical drives that read information on    compact disc read-only memory discs ("CD-ROM drives").

3. The acts and practices of respondent alleged in this complaint have been in or    affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade    Commission Act.

4. Respondent has disseminated or has caused to be disseminated    packaging and labeling for its CD-ROM drives, including but not necessarily limited to the    attached Exhibits A through C. The packaging and labeling contain the following statements    and depictions:

A. **Exhibit A, product packaging for CD-ROM drive 24X IDE**- 1. Depiction of the American eagle (on two principal display panels          of package);
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- 2. The statement "MADE IN THE USA" in red and blue (on two          principal panels and top panel of package);
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- 3. The company name "USDrives" in red, white, and blue (on          all panels except bottom panel of package).

B. **Exhibit B, product packaging for CD-ROM drive 20x IDE**

1. Depiction of the American flag in red, white, and blue in a        circle surrounded by the statement "Well made in the U.S.A." (on two principal        display panels and top panel of package); 

2. A depiction of the Statue of Liberty (on one principal display        panel of package);

3. A depiction of the American eagle (on one principal display panel        of package);

4. The company name "USDrives" in red, white, and blue (on        all panels except bottom panel of package). 

C. **Exhibit C, name plate label for Model No.: USDRIVE 24DT**

1. The statement "MADE IN USA."

5. Through the means described in Paragraph 4, respondent has represented, expressly or    by implication, that its CD-ROM drives are made in the United States, *i.e.*, that    all, or virtually all, of the component parts of its CD-ROM drives are made in the United    States, and that all, or virtually all, of the labor in manufacturing its CD-ROM drives is    performed in the United States.

6. In truth and in fact, the CD-ROM drives packaged in Exhibits A or B or labeled with    the statement in Exhibit C were, or are, assembled in the United States of primarily    imported parts. Therefore, the representations set forth in paragraph 5 were, and are,    false or misleading.

7. Respondent has disseminated or has caused to be disseminated    packaging for its CD-ROM drives, including but not necessarily limited to the attached    Exhibits D and E. The packaging contain the following statements and depictions:

A. **Exhibit D, revised product packaging for CD-ROM drive 24x      IDE**- 1. A depiction of the American Eagle (on two principal display panels          of package);
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- 2. A depiction of a billowing American flag in red, white, and blue          (across two principal display panels of package);
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- 3. The company name "USDrives" in red, white, and blue (on          all panels except bottom panel of package);

In small print at the bottom of two side panels, the words      "MADE IN CHINA."

B. **Exhibit E, product packaging for CD-ROM drive 32x IDE**- 1. A depiction of a billowing American flag in red, white, and blue          (across two principal display panels of package);
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- 2. The company name "USDrives" in red, white, and blue (on          all panels except bottom panel of package);

In small print on bottom panel, the words "MADE IN CHINA."

8. Through the means described in Paragraph 7, notwithstanding the inconspicuous    statement "Made in China," respondent has represented, expressly or by    implication, that its CD-ROM drives are made in the United States, *i.e.*, that    all, or virtually all, of the component parts of its CD-ROM drives are made in the United    States, and that all, or virtually all, of the labor in manufacturing its CD-ROM drives is    performed in the United States.

9. In truth and in fact, the CD-ROM drives packaged in Exhibits D or E were, or are,    made in China of primarily non-U.S. parts. Therefore, the representations set forth in    paragraph 8 were, and are, false or misleading.

10. The acts and practices of respondent as alleged in this complaint constitute unfair    or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of    the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this sixth day of April, 1999, has issued this    complaint against respondent.

By the Commission.

Donald S. Clark    Secretary

SEAL: |
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