Application for Further Review of Protest No. 2704-11-100039; Silicone Plastic Covers for iPods

HQ H152455 December 21, 2011 CLA-2 RR:CTF:TCM H152455 EGJ CATEGORY: CLASSIFICATION TARIFF NO.: 4202.99.90 Port Director Port of Los Angeles/Long Beach U.S. Customs and Border Protection 301 East Ocean Blvd. Suite 1400 Long Beach, CA 90802 Attn: Rhonda Griffin, Supervisory Import Specialist RE: Application for Further Review of Protest No. 2704-11-100039; Silicone Plastic Covers for iPods Dear Port Director: This is in response to Protest No. 2704-11-100039, dated January 4, 2011, filed by Target Corporation (Target) in response to your classification of silicone plastic covers for iPod Nanos and iPod Touches under the Harmonized Tariff Schedule of the United States (HTSUS). FACTS: The subject merchandise consists of two styles of silicone plastic coverings: one designed to cover the iPod Nano (Nano) and one designed to cover the iPod Touch (Touch). The Nano and the Touch are both rectangular digital media players designed and marketed by Apple, Inc. Both the Nano and the Touch covers are constructed of a single piece of molded, non-rigid silicone plastic. Both styles are form-fitted to the shape of the Nano or the Touch. The Nano cover is a rectangle with one of the small sides left completely open so that the Nano can slide into the cover like a sleeve. The face of the Nano cover has openings for the screen and the click wheel. The remaining sides of the Nano cover have smaller openings for buttons and ports. The Touch cover wraps around all sides of the Touch. The Touch cover has a large opening on the front to access the Touch screen, and smaller openings on the sides to access smaller buttons and ports. On August 29, 2009, Target made three entries of the subject merchandise under subheading 4202.99.90, HTSUS, which provides in pertinent part for “Trunks, suitcases, vanity cases … and similar containers…: other: other: other.” On July 9, 2010, U.S. Customs and Border Protection (CBP) liquidated the three entries under the entered tariff classification. On January 4, 2011, Target timely submitted the subject Protest and Application for Further Review (AFR), requesting that the entries of the subject merchandise be reliquidated under subheading 3926.90.99, HTSUS, which provides in pertinent part for “Other articles of plastics….:other: other.” The matter is protestable as a decision on classification. 19 U.S.C. §1514(a)(2). Target’s AFR satisfies the application criteria because Target alleges that the Port’s decision is inconsistent with a CBP ruling on identical merchandise, namely New York Ruling Letter (NY) N068497, dated July 29, 2009. 19 C.F.R. § 174.24(a). ISSUE: What is the tariff classification of the iPod covers? LAW AND ANALYSIS: Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context, which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. The HTSUS provisions at issue are as follows: 3926 Other articles of plastics and articles of other materials of headings 3901 to 3914 … * * * Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper … * * * 4820 Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard … * * * Legal Note 2(m) to Chapter 39 states, in pertinent part, that: This chapter does not cover: … (m) … trunks, suitcases, handbags or other containers of heading 4202. * * * The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System at the international level and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). EN 42.02 provides, in pertinent part: This heading covers only the articles specifically named therein and similar containers.   These containers may be rigid or with a rigid foundation, or soft and without foundation. Subject to Notes 1 and 2 to this Chapter [not applicable here], the articles covered by the first part of the heading may be of any material. The expression “ similar containers ” in the first part includes hat boxes, camera accessory cases, cartridge pouches, sheaths for hunting or camping knives, portable tool boxes or cases, specially shaped or internally fitted to contain particular tools with or without their accessories, etc.   The articles covered by the second part of the heading must, however, be only of the materials specified therein or must be wholly or mainly covered with such materials or with paper (the foundation may be of wood, metal, etc.). … The heading does not cover: … (c) Articles which, although they may have the character of containers, are not similar to those enumerated in the heading, for example, book covers and reading jackets, filecovers, documentjackets, blotting pads, photoframes, sweetmeat boxes, tobacco jars, ashtrays, flasks made of ceramics, glass, etc., and which are wholly or mainly covered with leather, sheeting of plastics, etc. Such articles fall in heading 42.05 if made of (or covered with) leather or composition leather, and in other Chapters if made of (or covered with) other materials. * * * GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes. Legal Note 2(m) to Chapter 39 states that “trunks, suitcases, handbags or other containers of heading 4202” are precluded from classification within Chapter 39. Therefore, if the iPod covers are classifiable as containers of heading 4202, HTSUS, they cannot be classified in heading 3926, HTSUS. Heading 4202, HTSUS, is divided into two parts. Articles listed before the semicolon are not restricted as to material composition. Articles listed in the second part must be composed of leather or composition leather, of sheeting of plastics, of textile material, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper. Since the instant covers are not composed of the materials listed after the semicolon, they cannot be classified in the second part of heading 4202, HTSUS. The first part of heading 4202, HTSUS, lists trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers. The instant iPod covers are not listed in the heading. Therefore, we must turn our discussion to the meaning of the term “similar containers.” The term “container” is not defined in the HTSUS. In Webster’s New World Dictionary of American English, 300 (3d. College Ed. 1988), a container is “a thing that contains or can contain something.” To contain means “to hold; 1. to have in it; hold, enclose, or include.” Id. In Merriam-Webster’s Collegiate Dictionary, 249 (10th ed. 2001), to contain means “to hold together, hold in, contain; 1. to keep within limits.” The iPod covers each enclose the Nano and the Touch because they wrap around the device, leaving only the ports, buttons and screens exposed. As such, the instant iPod covers are containers. In addition to being containers, the iPod covers must be “similar” to the other containers listed in heading 4202, HTSUS. The term “and similar containers” requires that we apply the rule of ejusdem generis to determine the scope of heading 4202, HTSUS. Under the rule of ejusdem generis, where an enumeration of specific things is followed by a general word or phrase, the general word or phrase is held to refer to things of the same kind as those specified. With respect to classification analysis, ejusdem generis requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms. See Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1392 (Fed. Cir. 1994). In Totes, Inc. v. United States, (Totes I) 18 C.I.T. 919, 924 (1994), the Court of International Trade (CIT) held that the essential characteristics which unite the containers of heading 4202, HTSUS, are that the containers “organize, store, protect and carry various items.” Id. aff’d by Totes, Inc. v. United States, (Totes II) 69 F.3d 495 (Fed. Cir. 1995). In Firstrax v. United States, 45 Cust. B. & Dec. 46 (Ct. Int’l Trade 2011), the CIT elaborated upon the meaning of the terms “organize” and “store”. The CIT stated that “[i]n the context of heading 4202, organization implies multiple items placed together in a single container.” Id. at 68. The CIT stated that “to ‘store’ is to keep or set aside for future use.” Id. at 69 citing Webster’s Third New International Dictionary, Unabridged, p.2252 (1981). The courts have not yet addressed definitions of “protect” or “carry.” In Webster’s New World Dictionary, 215 (3d. College Ed. 1988), “carry” is defined as “to hold or support while moving.” The same dictionary defines “protect” as “to shield from injury, danger or loss.” Id. at 1081. While all of these four characteristics are important, the CIT stated in Processed Plastic Company v. United States, 29 C.I.T. 1129, 1146 n. 27 (2005), that “merchandise can be classified under heading 4202 even if it serves only one of the four purposes deemed ‘essential characteristics.’” Id. citing Jewelpak Corp v. United States, 24 C.I.T. 249, 253 n.7 (2000). Moreover, the Court of Appeals for the Federal Circuit (CAFC) stated in Avenues in Leather, Inc. v. United States, (Avenues II) 423 F.3d 1326, 1332 (Fed. Cir. 2005), that “a classification under the ejusdem generis principle ‘is inappropriate when an imported article has a specific and primary purpose that is inconsistent with that of the listed exemplars in a particular heading.” Id. citing Avenues in Leather, Inc. v. United States, 178 F.3d 1241, 1246 (Fed. Cir. 1999). We must apply the principle of ejusdem generis to determine if the iPod covers have the same essential characteristics as the named containers of heading 4202, HTSUS. Namely, we must determine if the primary purpose of the iPod covers is to organize, store, protect or carry the Nano and the Touch. According to Firstrax, the iPod covers do not “organize” because they only hold one item. 45 Cust. B. & Dec. 46. Additionally, they do not “store” under Firstrax because storage implies that the devices are set aside for future use. Id. These iPod covers hold the electronic devices while the devices are in use. Target’s description states that the iPod covers have four purposes. First, they serve as a protective covering to keep the devices free of scratches and abrasions during normal daily use. Second, they increase friction in a person’s hand or against the surfaces of tables, desktops and other places where the devices may be placed. Third, they cushion the devices in the event it is dropped. Finally, the covers dampen the vibrations when the devices are set to vibrate. Three out of the four aforementioned purposes relate to protection. The iPod covers protect the device from scratches and abrasions, they improve grip to prevent the iPod from sliding off of surfaces and they cushion the device if the device falls to the ground. Therefore, protection is an essential characteristic of the iPod covers. Also, the gripping function of the iPod covers makes the devices easier to hold while moving. Because the iPod covers are containers whose primary purpose is protection, with an added carrying function, they are classified as containers of heading 4202, HTSUS. Target alleges that this classification is inconsistent with New York Ruling Letter (NY) N068497, dated July 29, 2009. In NY N068497, CBP classified two articles: a black two-piece mobile phone protector cover composed of rigid molded plastic and a pink mobile phone skin case composed of non-rigid molded plastic. The black two-piece cover had one piece which snapped onto the back of the phone while the other piece snapped onto the phone’s slider top. CBP classified this black two-piece cover under heading 3926, HTSUS, which provides for other articles of plastics. The pink phone skin case was specially shaped and fitted for a Blackberry smart phone device. CBP classified the pink phone skin case under heading 4202, HTSUS. Target asserts that the black two-piece mobile phone cover in NY N068497 is substantially similar to the subject iPod covers. However, the black two-piece mobile phone cover does not satisfy the aforementioned definitions of a container. As noted above, a container is something that holds together, encloses or includes something. The black two-piece mobile phone cover does not contain the mobile phone. The two separate pieces snap onto the front and back of the mobile phone and do not attach to each other. The two-piece cover is designed to allow the sliding phone cover to move separately from the bottom of the phone. As a result, the two-piece cover is not classifiable as a container of heading 4202, HTSUS. Conversely, the instant covers do contain the Nano and the Touch. The instant covers enclose the Nano and the Touch, only leaving the screens, buttons and ports exposed. Further, they are similar to the named containers of heading 4202, HTSUS, because they primarily serve to protect the Nano and the Touch. As a result, the instant covers are classifiable as containers of heading 4202, HTSUS. CBP has consistently classified one-piece mobile phone covers and digital media player covers under heading 4202, HTSUS. See, e.g. N108155, dated July 2, 2010, and NY N020782 dated January 10, 2008. CBP has also classified two pieces of an iPhone cover which connect to each as a container of heading 4202, HTSUS. See H122342, dated April 12, 2011, aff’g NY N093315, dated May 4, 2010. Target also alleges that iPod covers are similar to articles of stationery. EN 42.02 states that the heading does not cover “(c) … book covers and reading jackets, filecovers, documentjackets, blotting pads, photoframes, etc…..” Book covers, reading jackets, file-covers, document-jackets, blotting pads and other articles of stationery of paper or paperboard are all eo nomine provided for in heading 4820, HTSUS. Target states that the iPod covers are similar to book covers in design and function, and are therefore classified in heading 4820, HTSUS. As support for this argument, Target cites to Avenues II. 423 F.3d 1326 aff’g Avenues in Leather, Inc. v. United States, (Avenues I) 28 C.I.T. 565 (2004). In Avenues II, the CAFC determined that a leather-covered “Calcu-Folio” which contained a memorandum pad, a three-ring binder and a paperboard core and spine was classified as an article of stationery under heading 4820, HTSUS. The CAFC stated that under GRI 1, “apart from the memorandum pad and binder, which appear as named exemplars under heading 4820, most of the remaining features of the Calcu-Folios pertain to use with writing or written instruments.” Avenues II, 423 F.3d at 1334. The CAFC further stated that “the imported item as a whole exhibits characteristics of an article of stationery … and shares the common characteristics of a memorandum pad and a letter pad.” Id. Although the Calcu-Folio also served to organize papers and documents, the CAFC determined that the primary purpose of the Calcu-Folio was to serve as an article of stationery under heading 4820, HTSUS. We reject Target’s argument that iPod covers are similar to book covers. In Avenues II, the CAFC determined that the primary purpose of the Calcu-Folio was to act as an article of stationery. 423 F.3d at 1334. The iPod covers do not pertain to writing or written documents; their primary purpose is to protect and carry electronic devices. Therefore, they are not classified together with book covers as articles of stationery under heading 4820, HTSUS. Citing to Avenues I, Target agrees that the iPod covers share some of the characteristics of containers of heading 4202, HTSUS. 28 C.I.T. at 571. However, Target states that the iPod covers have important functions such as preventing the electronic devices from skidding and reducing the strength of vibrations. Target asserts that these functions, like the stationery functions of the Calcu-Folio, compel classification in a heading other than 4202, HTSUS. Target states that other articles with anti-skid properties are generally classified pursuant to their material content. See, e.g. NY N033496, dated July 18, 2008 (a roll of anti-skid material classified in heading 3921, HTSUS, for sheets of plastics), NY L86869 (anti-skid floor protector pads classified in heading 3919, HTSUS, as self-adhesives of plastics), dated August 30, 2005 and NY A81795 (anti-skid pads and sheets classified in heading 4003, HTSUS, as reclaimed rubber), dated September 3, 1996. Target also points out that CBP has classified vibration-reducing materials according to their constituent materials. We are not persuaded by Target’s constituent materials argument. In Totes I, the plaintiff argued that a car trunk organizer had functions which differentiated it from the named containers in heading 4202, HTSUS. 18 C.I.T. at 924. The plaintiff asserted that the trunk organizer was specifically designed for automobiles and that the organizer was comprised of water and oil-resistant fabric. These functions, the plaintiff argued, compelled classification of the trunk organizer as an automobile accessory under heading 8708, HTSUS. Id. The CIT held that these functions were incidental to the trunk organizer’s design, and that they did not alter the essential characteristics and purpose of the merchandise, which was to organize, protect, store and carry various articles. Id. Similarly, we find that the anti-skid and vibration reduction functions do not diminish the primary functions of the iPod covers, which are to protect and carry the Nano and the Touch. Under the legal principle of ejusdem generis, the iPod covers share the essential characteristics of the named goods in heading 4202, HTSUS. Namely, the iPod covers protect and carry the Nano and the Touch. Therefore, the iPod covers are prima facie classifiable as containers of heading 4202, HTSUS, and are precluded from classification in heading 3926, HTSUS, by Note 2(m) to Chapter 39. HOLDING: By application of GRI 1 (Note 2(m) to Chapter 39), the iPod Nano cover and the iPod Touch cover are classified in subheading 4202.99.90, HTSUS, which provides for “Trunks, suitcases …and similar containers: other: other: other…” The column one, 2009 general rate of duty is 20 percent ad valorem. You are instructed to DENY the protest. Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov. You are to mail this letter together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of this letter, the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial Trade and Facilitation Division