Ruling request; Proper marking of certain “BULOVA” watches after Bulova Corporation’s merger with Citizen Watch Company of America, Inc. in January 2017

HQ H281932 February 15, 2017 CLA-2 OT:RR:CTF:TCM H281932 APP CATEGORY: MARKING John Peterson, Esq. Neville Peterson LLP One Exchange Plaza 55 Broadway, Suite 2602 New York, NY 10006 RE: Ruling request; Proper marking of certain “BULOVA” watches after Bulova Corporation’s merger with Citizen Watch Company of America, Inc. in January 2017 Dear Mr. Peterson: This is in response to your letter dated December 6, 2016, submitted on behalf of Citizen Watch Company of America, Inc. (“COA”) and Bulova Corporation of New York (“Bulova”), requesting a ruling concerning the proper marking of “BULOVA” watches following a merger of Bulova into COA on January 1, 2017. Our response follows. FACTS: Bulova is an American manufacturer of watches and clocks, which was founded in New York City in 1875. It became part of Loews Corporation in 1979 and was acquired by Citizen Watch Co. Ltd. of Japan (“COJ”), the parent company of COA, at the end of 2007. You state that since Bulova was acquired by COJ in 2007, COA and Bulova “have operated as separate, albeit related importers and wholesalers of watches, with COA’s watches bearing the CITIZEN trademark and Bulova’s watches bearing the BULOVA trademark.” You further state that a majority of Bulova’s watches are marked on the movement with the movement manufacturer “MIYOTA,” which is the name of the COJ-owned movement manufacturing company, and the watch caseback with “BULOVA.” You note that “a substantial number of specialized movements which are exclusive to Bulova are marked on the movement with the purchaser BULOVA and the watch caseback with BULOVA.” On January 1, 2017, Bulova merged with COA and ceased to exist as a separate entity. Under the merger, COA and Bulova were integrated into one organization, Citizen Watch Company of America, Inc., and will do business in the trade as Citizen Watch America (“CWA”). Citizen and Bulova will still continue to operate as separate brands. You present the following additional information about the functioning of Bulova after the merger: Thereafter, the Bulova importing and distribution business will be operated as a division of COA and all operations concerning Bulova brand watches will be conducted under the designated trade name and d/b/a “BULOVA” which will be registered as a trade name and d/b/a upon the merger. The trademark BULOVA is registered in all 50 States and in many foreign jurisdictions, and the trade name BULOVA will be registered as a trade name in New York, California and other states. Bulova will continue to have separate designated management and administration offices in New York City, which will operate under the BULOVA trade name. In addition, warehouses and logistics facilities will continue to operate under the BULOVA trade name. All marketing, advertising, sales and distributing operations will be done under the BULOVA trade name, and there will continue to be a staff of over 300 individuals working under the BULOVA trade name. As noted above, the BULOVA trademark will continue to be used and will reflect precisely the trade name under which COA will carry on its BULOVA business. COA will sell watches bearing the CITIZEN mark, from its headquarters office [in] New York and through a dedicated complement of facilities and staff operating under the trade name and d/b/a Citizen Watch America. This will include COA’s Foreign Trade Zone facility in Torrance, California. You state that prior to the 2017 merger, the use of the word “BULOVA” to mark the backs of watch movements and watch cases was an acceptable marking. You also state that after the 2017 merger, the purchaser of Bulova’s watches will be COA, doing business under the registered trade name “BULOVA.” ISSUE: Whether, after the January 2017 merger, it will still be permissible to mark watch movements and casebacks with the trade name “BULOVA,” since you state that COA will carry out its Bulova watch operations using the “BULOVA” trade name. 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 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. Title 19 C.F.R. Part 134 implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Title 19 C.F.R. § 134.41(b) mandates that the ultimate purchaser in the United States must be able to find the marking “easily and read it without strain.” Additional U.S. Note 4 to Chapter 91 of the Harmonized Tariff Schedule of the United States (“HTSUS”) states, in relevant part, that: Special Marking Requirements: With the following exceptions, any movement or case provided for in this chapter, whether imported separately or attached to an article provided for in this chapter, shall not be permitted to be entered unless conspicuously and indelibly marked by cutting, die-sinking, engraving, stamping (including by means of indelible ink), or mold-marking (either indented or raised), as specified below. Movements with opto-electronic display only and cases designed for use therewith, whether entered as separate articles or as components of assembled watches or clocks, are excepted from the marking requirements set forth in this note. The special marking requirements are as follows: Watch movements shall be marked on one or more of the bridges or top plates to show: (i) the name of the country of manufacture; (ii) the name of the manufacturer or purchaser; and (iii) in words, the number of jewels, if any, serving a mechanical purpose as frictional bearings. (b) Clock movements shall be marked on the most visible part of the front or back plate to show: (i) the name of the country of manufacture; (ii) the name of the manufacturer or purchaser; and (iii) the number of jewels, if any. Watch cases shall be marked on the inside or outside of the back to show: (i) the name of the country of manufacture; and (ii) the name of the manufacturer or purchaser. Clock cases provided for in this chapter shall be marked on the most visible part of the outside of the back to show the name of the country of manufacture. (emphasis added). The implementing regulation, 19 C.F.R. § 11.9, provides that: No movement, case, or dial provided for in Chapter 91, Harmonized Tariff Schedule of the United States (HTSUS), shall be released for consumption until marked in exact compliance with the requirements of additional U.S. Note 4, Chapter 91. If any article so required to be marked is found not to be marked to indicate the country of origin, the 10 percent marking duty shall be assessed, unless such marking is accomplished or the merchandise is exported or destroyed under Customs supervision prior to the liquidation of the entry, in accordance with the provisions of 19 U.S.C. 1304(f). The name of the manufacturer or purchaser which must appear on articles provided for Chapter 91, Harmonized Tariff Schedule of the United States (HTSUS), and specified in Additional U.S. Note 4, Chapter 91, may be either the actual name of the manufacturer or purchaser or a duly registered trade name under which such manufacturer or purchaser carries on his business. A trade-mark shall not be accepted as meeting any such special marking requirement unless it includes the full name of the manufacturer or purchaser. The term “Purchaser” as used in this paragraph means the purchaser in the United States by whom or for whose account the articles are imported. (emphasis added). You assert that since COA will be doing a significant portion of its business under the registered trade name “BULOVA” after the January 2017 merger, it should be acceptable pursuant to 19 U.S.C. § 1304, Additional U.S. Note 4 to Chapter 91, HTSUS, and 19 C.F.R. § 11.9(b) to mark watch movements and casebacks with the trade name “BULOVA,” which is also the trademark under which the watches will be advertised and sold. You claim that marking the watch movements and watch cases with the name “CITIZEN” as purchaser, while the face of the watch is marked with a “BULOVA” trademark, would likely cause consumer confusion. Based on the information provided, prior to the January 2017 merger, the registered trade name “BULOVA,” which embodied the name of the purchaser Bulova, marked the watch movements and the watch cases of Bulova’s watches pursuant to Additional U.S. Notes 4(a) and (c) to Chapter 91, HTSUS and 19 C.F.R. § 11.9(b). After the 2017 merger with COA, the purchaser of Bulova’s watches is COA doing business under the registered trade name “BULOVA.” We are informed that COA is maintaining a separate “BULOVA” trade name and portfolio of “BULOVA” watch models to sell. As an operating division of COA, Bulova is continuing to do business under the name “BULOVA” and to maintain its “BULOVA” headquarters, website, warranties, watches, warehouses, and sales force. Therefore, since following the 2017 merger, COA is the purchaser in the United States for whose account Bulova’s watches are being imported doing business under the registered trade name “BULOVA,” Bulova’s watches imported by COA may be marked with the “BULOVA” trade name and d/b/a pursuant to 19 C.F.R. § 11.9(b). Additionally, COA must continue to comply with the special marking requirements in Additional U.S. Note 4 to Chapter 91, HTSUS. HOLDING: Based on the facts presented, we are of the opinion that Bulova’s watches imported by COA after the January 2017 merger may continue to be marked with the “BULOVA” registered trade name and d/b/a if in compliance with the special marking requirements in Additional U.S. Note 4 to Chapter 91, HTSUS. A copy of this ruling letter should be attached to entry documents filed at the time the goods are entered. Sincerely, Ieva K. O’Rourke, Chief Tariff Classification and Marking Branch