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HQ 733526

July 12, 1990

MAR-2-05 CO:R:C:V 733526 KG

CATEGORY: MARKING

Leonard Lehman, Esq.
Barnes, Richardson & Colburn
1819 H Street, N.W.
Washington, D.C. 20006

RE: Country of origin marking of imported compact discs

Dear Mr. Lehman:

This is in response to your letter of May 15, 1990, requesting reconsideration of HQ 732900 (April 24, 1990), regarding the country of origin marking of imported compact discs manufactured by Disque Americ, Inc., of Quebec, Canada.

FACTS:

Several sample compact discs were submitted for examination in connection with HQ 732900. Each disc is packaged in a clear hard thin plastic case which contains information on a card as to the contents of the disc. The case is then repackaged in a thin 6 inch by 12 inch plastic or cardboard container and wrapped in clear plastic.

One sample contains the phrase "Distributed by The Special Music Company, 87 Essex Street, Hackensack, NJ 07601" in two places on the outer cardboard packaging of the compact disc and a prominent 1 inch by 1 inch round white sticker with bright red lettering which contains the phrases "Fabrique au Canada," and "Made in Canada" and a large red maple leaf.

The second, third and fourth samples are packaged in a see- through container. The second sample has the phrase "Manufactured and Distributed by The Special Music Company & Pair Records, divisions of Essex Entertainment, Inc., 87 Essex Street, Hackensack, NJ 07601" on the disc. This phrase also appears on the other side of the package. The phrase "Made in Canada" also appears on the disc itself. Two stickers are affixed to the back of the sample. The first white sticker contains black lettering 1/8 inch in height which bears the phrase "Made in Canada." The second sticker is identical to the 1 inch by 1 inch sticker described above.

The third sample contains the phrase "Made in Canada" on one side of the disc. The other side of the package contains the phrase "A product of Collectable Records Corp., Box 35, Narbeth, Pa. 19072" and a sticker identical to the 1 inch by 1 inch sticker which appears on samples one, two and four.

The fourth sample has the phrase "Made in Canada" on one side of the disc. On the other side of the package, the phrase "Manufactured by Capitol Records, Inc., a subsidiary of Capitol- Emi Music, Inc., Hollywood and Vine Street, Hollywood, California" appears. The phrase "Printed and Manufactured in Canada" appears just below the U.S. address. The same 1 inch by 1 inch sticker described above that appears on samples one, two and three is also on this side of the package.

ISSUE:

Whether the four samples described above, satisfy the country of origin marking requirements.

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 U.S. 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 U.S. the English name of the country of origin of the article. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT (CIT 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297 at 302, C.A.D. 104 (1940), where the court stated that: "Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. 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."

Customs ruled in HQ 732900 (April 24, 1990), that the compact discs in question which bear the name and address of a U.S. company preceded by the words "A Product of," "Manufactured by," or "Manufactured and distributed by," are not in compliance with 19 U.S.C. 1304 because such words are confusing and misleading and cannot be corrected by a label containing the phrase "Made in Canada" that appears in close proximity to these words. Although Customs cited section 134.46, Customs Regulations (19 CFR 134.46), in regard to the sample which contained the phrase "Distributed by" followed by a U.S. address, which was ruled acceptable, the conclusion that the other samples were not acceptably marked with the country of origin did not turn on whether 19 CFR 134.46 was satisfied or not but on whether 19 U.S.C. 1304 was satisfied.

In your request for reconsideration you indicate that the language on the containers is acceptable because it reflects ownership and not origin. You contend that in identifying the local address of the company responsible for the manufacture and/or distribution of these discs, an absolute right to identify ownership was being exercised. In addition, you claim that even if such language might create ambiguity for the ultimate purchaser regarding origin, you indicate that based on the prominent configuration of the country of origin labels, even the most unsophisticated purchaser will realize that the discs are not of domestic manufacture and that they were made in Canada.

After careful reconsideration of the issues presented, we remain of the opinion that the use of the words "A Product of," "Manufactured by," or "Manufactured and distributed by,' when they precede the name and address of a U.S. company may confuse an ultimate purchaser regarding the origin of the product. We disagree with your position that these terms merely connote ownership. To the contrary, these terms are synonymous with the phrases "Made in" and "Product of" which Customs approves to designate the country of origin of an imported article. When these words precede a U.S. address, an ultimate purchaser could mistakenly conclude that the product in question is a domestic product. However, upon reconsideration we find that in this case, any confusion that may be caused by the use of these words is overcome by the extremely prominent country of origin labels that appear on the products.

As indicated above, each of the samples which uses these phrases also has the phrase "Made in Canada" on the front of the disc and a very prominent "Made in Canada" sticker securely affixed to the back of the package inside the outer plastic wrap where it cannot be removed. The sticker is particularly eye catching due to its large size, the presence of a large red maple leaf in the middle and the words "Made in Canada" in large, red capital letters against a white background. One of the samples has an additional prominent "Made in Canada" sticker on the back and another has a "Printed and Manufactured in Canada" also printed on the back. In contrast to the prominent "Made in Canada" markings, the U.S. markings appear in fine print and are not at all prominent. In such circumstances, any confusion that is caused by the words "A product of," "Manufactured by," or "Manufactured and distributed by," each preceding the name and address of a U.S. company, is overcome by the extremely prominent country of origin markings.

Therefore, in view of the extraordinary steps that have been taken in this case to insure that the ultimate purchaser of the compact discs is aware that they are from Canada, we find that the submitted samples indicate the country of origin as required by 19 U.S.C. 1304. In addition, the "Made in Canada" markings satisfy the close proximity and comparable size requirements of 19 CFR 134.46, which apply when a place name other than the country of origin appears on the product.

HOLDING:

Even though imported compact discs bear the name and address of a U.S. company preceded by the words "A Product of," "Manufactured by," or "Manufactured and Distributed by," in this case , any confusion that may be caused by the use of these words is overcome by the extremely prominent country of origin marking as described above, that appear on the products which satisfy the requirements of 19 U.S.C. 1304. The holding in HQ 732900 is modified accordingly.

Sincerely,

John Durant
Director,

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