Request for a ruling regarding the country of origin marking of retail packaging; 19 CFR §134.46; 19 CFR §134.47; evidence of trademark recordation; conspicuous location

HQ 561325 October 25, 1999 MAR05 RR:CR:SM 561325 MFC CATEGORY: Marking Donald S. Stein, Esq. Manatt, Phelps & Phillips, LLP 1501 M Street, N.W. Washington, D.C. 20005-1702 RE: Request for a ruling regarding the country of origin marking of retail packaging; 19 CFR §134.46; 19 CFR §134.47; evidence of trademark recordation; conspicuous location Dear Mr. Stein: This is in response to your letter dated March 25, 1999, on behalf of FAG Bearings Corporation (“FAG”) and subsequent telephone conversations, requesting a binding ruling regarding the proposed country of origin marking on certain retail packaging (cardboard boxes) in which foreign-origin bearings for motor vehicles are shipped to and sold in the U.S. Samples of two boxes with the proposed marking on them were submitted for our consideration. FACTS: FAG sells bearings in the U.S. under the trademark “Automotive Aftermarket of the Americas,” for which you included a copy of the Trademark registration, U.S. Trademark Reg. No. 2,170,674, registered July 7, 1998. The trademark appears in four places on the smaller cardboard box and in five places on the larger cardboard box: the front and rear panels, and the two side end panels, as well as the top panel of the larger box. While the sample boxes did not include the country of origin marking, FAG urges that it need only mark one panel of the retail box and wishes to confirm this. You advised a member of my staff by telephone that the bearings come in many different sizes and that one bearing will be packaged in each box. A label will be placed on the box to indicate the part number, apparently on one side of the box. The bearings are sold directly to warehouse distributors who sell them to installers -- not to “do-it-yourselfers.”  ISSUE: Whether the proposed country of origin marking satisfies the requirements of 19 U.S.C. §1304 and 19 CFR Part 134. LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. By enacting 19 U.S.C. §1304, Congress intended to ensure that the ultimate purchaser would know the country of origin of the goods by inspecting the marking on the imported goods. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will. United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940). Part 134 implements the country of origin marking requirements and exceptions to 19 U.S.C. §1304. According to 19 CFR §134.41, the country of origin marking is considered to be conspicuous if the ultimate purchaser in the United States is able to find the marking easily and read it without strain. The degree of permanence of the marking should be at least sufficient to insure that in any reasonably foreseeable circumstance, the marking shall remain on the article until it reaches the ultimate purchaser unless it is deliberately removed. The ultimate purchaser is defined generally as the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR §134.1(d). In this case, the owner of the automobile into which the bearing is installed is considered the ultimate purchaser. See Headquarters Ruling Letter (“HQ”) 733241 (August 27, 1990) (ultimate purchaser of replacement automotive parts ordered and installed by mechanics is the consumer who brings his or her car into a garage) and HQ 731506 (May 1, 1990) (one who purchases replacement automotive glass is the ultimate purchaser and not the installer). An article is not required to be marked if it falls within one of the exceptions to marking. An exception from marking exists where the marking of the container will reasonably indicate the origin of the article. 19 U.S.C. §1304(a)(3)(D). This becomes an issue in a case such as this, where the ultimate purchaser is unlikely to receive the box before the bearing is installed in his or her car. As noted above, HQ 733241 considered a similar issue --the marking requirements applicable to replacement auto parts which were sold primarily to mechanics for installation and which were not visible once installed. The reasoning of HQ 733241 is instructive. It states, in pertinent part: In HQ 722727 (October 21, 1983), Customs ruled that various replacement automotive parts individually wrapped in containers which bear the proper country of origin marking and part number and which will reach the ultimate purchaser in these containers was excepted from individual marking by the [container] exception set forth at 19 U.S.C. 1304(a)(3)(D).... If it is the ultimate purchaser who will receive the part in the closed cardboard box, the part itself is not required to be marked pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d) as long as the box is properly marked. This would govern in a situation where a car owner orders the part directly from the manufacturer or purchases the part in its box from an auto parts store. If however, the mechanic is the one who ordered the part, the part is not entitled to the 19 U.S.C. §1304(a)(3)(D) exception because the mechanic is not the ultimate purchaser. Although the imported auto parts which do not generally reach the ultimate purchaser in their box are not technically entitled to the 19 U.S.C. 1304(a)(3)(D) exception, this case presents a unique situation because often the consumer, who is the ultimate purchaser, has the mechanic install the parts. The parts are not visible once installed in the car and the consumer either never sees the actual part or sees it only after it is no longer functional and has been removed from the car. Since the intent of the marking statute is to enable consumers to make informed buying choices, in this case, marking the sealed box in a legible and conspicuous manner is the best way in which to inform the consumer of the country of origin of the part. If the consumer is concerned about the country of origin, he or she can ask to see the box before purchasing the part and requesting the installation. Because each part is imported in its own sealed box which identifies the part number, we conclude that the part will remain in the box until installation. Therefore, marking the country of origin of the imported auto part in a permanent, conspicuous and legible manner on the sealed box in which the auto part is contained satisfies the requirements of 19 U.S.C. 1304 and 19 CFR Part 134. We consider the analysis of HQ 733241 controlling and find that in this case, marking the container, the large or small cardboard box, with the country of origin satisfies the marking requirements of 19 U.S.C. §1304. An additional issue which must be considered is what effect, if any, does the trademark, “Automotive Aftermarket of the Americas,” which appears in several places on the retail box have on the country of origin marking of the bearings. In cases where there is a reference to a location other than the country of origin on imported merchandise, the special marking requirements set forth in 19 CFR §§134.46 and 134.47 may be applicable. The purpose of both provisions is to prevent the ultimate purchaser from being misled or deceived when the name of a country or place other than the country of origin appears on an imported article or its container. Section 134.46 differs from 134.47 in that the former requires that the name of the country of origin appear “in close proximity” to the non-origin reference and in lettering of at least comparable size. By contrast, section 134.47 is less stringent, providing that when as part of a trade name, trademark, or souvenir mark, the name of a location in the U.S. or the words “United States” or “America” appears on the imported article, the name of the country of origin must appear in close proximity or “in some other conspicuous location.” Thus, section 134.47 triggers a general standard of conspicuousness. In either case, the name of the country of origin must be preceded by “Made in,” “Product of,” or other similar words. Section 134.46 applies where the word “United States,” or “American,” the letters “U.S.A.,” any variation of such words or letters, or the name of a domestic or foreign city or locality, other than where the article was manufactured or produced, appears on an importer article or its container, and those words may mislead the ultimate purchaser as to the actual country of origin. You assert that this section does not apply, as the phrase at issue is a trademark, which is not encompassed by section 134.46. You also argue that section 134.47, which states that it applies when the word “United States,” “America,” or the name of a location in the U.S. appears as part of a trademark or trade name, is inapplicable here as “Americas” is not one of the triggering words or phrases. We disagree. Customs has applied section 134.47 where a form of the word “America” was used. See Headquarters Ruling Letter (“HQ”) 560806 (March 19, 1998) (analysis of section 134.47 where trademark includes the word “American”); HQ 561260 (June 18, 1999) (analysis of section 134.47 where trademark includes the word “America’s”). Additionally, we believe that the repeated reference to “Americas” on nearly all of the sides of the boxes may mislead the ultimate purchaser as to the actual origin of the bearings. You have presented evidence of the trademark registration. Therefore, Customs finds that the requirements of 19 CFR §134.47, rather than section 134.46, apply. Consequently, the country of origin need appear in close proximity or “in some other conspicuous location” to the non-origin reference preceded by words such as “Made in” or “Product of.” You assert that if we find that the requirements of section 134.47 are triggered, the country of origin need not be included on each side on which the trademark appears. In support of this proposition, you cite HQ 561060 (November 3, 1998), in which Customs ruled that the country of origin marking need only appear on a sewn-in label on wearing apparel and need not be marked on the hang-tag containing the trademark with a non-origin geographical reference. We agree that section 134.47 does not require that the origin marking appear in close proximity to each non-origin trademark reference on an article or its container. See HQ 561260 (section 134.47 is satisfied when the country of origin appears only on the back of a tag on which the phrase “America’s Finest Outfitter” was printed on both the front and the back of the tag). Customs examined a similar situation in HQ 733046 (May 4, 1990). In that case the company placed its trademark, which included the word “America,” on four panels of boxes in which imported toys were sold. Customs found that a single origin marking did not meet the conspicuous requirement of 19 CFR §134.47 and required that the country of origin appear on at least two panels of the box so that it could be easily found and read. We find that this case poses a similar problem and that a single origin mark would not meet the requirement of conspicuousness. Following the analysis of HQ 733046, we find that at least two sides of the boxes must be marked with the country of origin. We would encourage your client to place a country of origin marking on the same side where the part number label will be affixed, although you have not indicated which side this will be. HOLDING: The phrase “Automotive Aftermarket of the Americas” on four sides of the small box and five sides of the large box triggers the requirements of 19 CFR §134.47. Accordingly, the country of origin must be preceded by “Made in,” “Product of” or other similar words. Additionally, we find that the conspicuousness requirement of 19 CFR §134.47 and 19 U.S.C. §1304 requires that each box be marked with the country of origin on two sides. A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, John Durant Director Commercial Rulings Division