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HQ 087057


December 21, 1990

CLA-2 CO:R:C:G 087057 CMS

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.12.20
4202.22.15
8517.10.00

Mr. Irving W. Smith, Jr., Esq.
Law Offices of George R. Tuttle, P.C.
1331 Pennsylvania Avenue, N.W.
Suite 1200 F
Washington, D.C. 20004

RE: Phonebag; Integrated Handbag And Telephone Set; Shoulder Bag; Briefcase; Plastic Sheeting; Composite Good; GRI 3(b)

Dear Mr. Smith,

This is in response to your request on behalf of Dallas Handbag Company, dated April 24, 1990, for a classification ruling on certain "phonebags". Our ruling follows.

FACTS:

The merchandise is described in the ruling request as "phonebags". The phonebags are handbags or briefcase type bags with a built in telephone set. The telephone set is not a cellular mobile telephone. It must be plugged in to an existing phone jack in order to send or receive calls. Samples of two models were provided.

The first model is in the shape of a briefcase and measures approximately 15" x 12" x 4". It has an outer surface of fabric backed cellular plastic material. The top flap of the bag extends approximately 8" down the front of the bag and is closed by means of two magnetic snap closures. The bag has a zippered change pocket in the interior compartment and a detachable shoulder strap.

The first model has a telephone push button dial selector and electronics module built into the bag flap. The dial selector protrudes from the outside flap portion which extends down the front of the bag. The electronics module measures
approximately 4" x 6" x 3/4" and protrudes from the inside of the flap. A telephone handset is held in place on the exterior top of the bag by a 3" wide strap with a velcro closure. A coiled handset wire extends from the handset to a jack built in to the flap next to the dial selector.

A 5' long phone cord with a jack on one end extends from the electronics module. There is no cradle or other type of switch which automatically allows the user to receive calls when an outgoing call is completed. The user must manually operate a switch which is situated on the outside of the electronics module in order to switch from ingoing to outgoing call mode. A ringer and small red light situated next to the dial selector signal an incoming call.

The second model is in the shape of a handbag and measures approximately 10" x 9" x 3". Its sides are tapered resulting in the bag's bottom being slightly wider than its top. The outer surface consists of fabric backed cellular plastics material. The bag's flap extends approximately 2" down the front of the bag. The bag has a zippered change pocket in the interior compartment and a detachable shoulder strap.

The dial selector, electronics module, ringer, red light indicator and handset cord jack of the second model are built into the front panel of the bag, not the flap. The electronics module protrudes from the inside of the front panel into the interior compartment of the bag; the remainder of these components are situated in the exterior front panel. The handset is situated on the exterior top of the bag. The second model functions like the first model.

ISSUE:

Is the merchandise classified as briefcases and similar containers, and handbags of plastic sheeting in Heading 4202, or as electrical apparatus for line telephony in Heading 8517?

LAW AND ANALYSIS:

Heading 4202 in pertinent part describes briefcases and similar containers, and handbags and similar containers of plastic sheeting. Heading 8517 in pertinent part describes electrical apparatus for line telephony.

Each heading only describes part of the phonebags. GRI 3(a) provides that when two headings refer only to part of a good then the headings are regarded to be equally specific. Classification thus cannot be determined by GRI 3(a) according to the heading which provides the most specific description of the good.

The phonebags are GRI 3(b) composite goods consisting of handbags or briefcase type bags, and telephone sets. GRI 3(b) provides that the goods shall be classified as if they consisted of the component which gives them their essential character.

The Explanatory Notes to GRI 3(b), p. 4, provide that "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods." The importer, through counsel, submits that the costs attributed to the bag and the phone are essentially equal.

It is argued in the ruling request that the phone gives the product its essential character because it is the component which makes the phonebag attractive, performs the most significant function and sells the product because of the novelty and convenience of having a telephone at hand. It is argued that due to its size, buyers looking for a handbag would especially not purchase the smaller model without giving primary consideration to the telephone feature. It is further argued that the handbag component may be viewed as a carrying case for the telephone which also allows one to carry other small items.

We disagree. The phonebag is well suited for use as a bag, especially as a novel bag which may be an attention grabber or conversation piece. In contrast, certain features of the telephone make it rather inconvenient for use as a telephone. Because the phone is not a cellular mobile telephone, it must be plugged in to an existing phone jack in order to send or receive calls. The user of the phonebag must locate a phone jack, unplug whatever phone is already connected to it, and plug in the phonebag. In order to receive a call, the user must remember to manually operate the switch to change from incoming to outgoing call mode. The user must open the flap to the bag in order to access the switch.

A person sending a call to the user of the phonebag would have to know the telephone number for the jack to which the phonebag is then connected. Due to the length of the cord, a person holding the phonebag while waiting for a call would have little or no mobility. If the user placed the phonebag on a table while waiting for a call the bag would take up much more space than a normal telephone. It is difficult to get the phonebag to stand on its own especially when the handset is being held when making or receiving a call.

If one wanted to use a particular phone jack, it would be more convenient to use the telephone already connected to the
jack, or another normal telephone borrowed from another jack. The use of the phonebag instead of another telephone set would achieve no benefit for billing purposes; phone charges are normally associated with the phone jack and not the telephone set plugged in to the jack. We simply cannot find that the phonebag would be purchased as a telephone set so it could be carried around in the event the user wanted to send or receive a call from a particular jack but no telephone set was available.

In HQ 082788 (February 12, 1990), we held that a plastic cooler with a built in transistor radio was classified as a plastic cooler in Heading 3923. We found that the cooler imparted the essential character of the article because it comprised the bulk of the article, the article was a container that functioned to store, preserve and hold, and that consumers would be more likely to purchase the article for use as a container rather than as a transistor radio.

The bag component of the phonebag comprises the bulk of the article. The bag component has the features of a handbag or briefcase type bag, including exterior flap, interior zippered change pocket and shoulder strap. The bag component is many times larger than a case which would merely be used to carry the phone (in fact, the telephone handset may be used as a handle to carry the bag). The telephone component is rather inconvenient for use as an electrical apparatus for line telephony. The phonebag is well suited for use as a handbag or briefcase type bag, especially as a novel bag which may be an attention grabber or conversation piece. The phonebag has been seen marketed in the handbag departments of girls and ladies accessory stores. The consumer would be more likely to purchase the phonebag for use as a handbag than as a telephone. We find that the bag is the component which gives the phonebag its essential character.

HQ Rulings 081373 (October 7, 1988) and 081375 (October 3, 1988) are cited in the ruling request. In these rulings we stated that when viewing handbags, the materials of the outer surface produce a visual impact which in many instances leaves little or no doubt as to what material gives the outer surface its essential character. In the matter under consideration, however, the issue is which component gives the article its essential character, not what material gives the outside of the article its esential character. In any event, the visual appearance of the phonebag is that of a bag which incorporates a phone, not a phone which has a bag attached to it.

The argument in the ruling request that the rejection of the trademark application for the phonebag supports the classification of the phonebag as a telephone, is unpersuasive. The trademark application was refused because the name

"PHONE-BAG" was deemed to be descriptive. The Patent and Trademark Office examining attorney who refused the trademark application advised that no sample was submitted, and the reference to "International Class 9" was based on the assumption that the trademark application involved an item which was similar to a portable cellular telephone with its specially shaped carrying case. The description of the article in the refusal document as a "portable telephone and carrying bag sold as a unit" is consistent with this assumption. In fact, the description of the product in the trademark application as "handbags having built-in telephones" supports a finding that the products are essentially bags, and are not essentially telephones.

HQ Ruling 081193 (August 2, 1988), cited in the ruling request is inapposite. The merchandise in Ruling 081193 consisted of a combination calculator/keychain. Unlike the phonebag which has a component which imparts the essential character (the bag), neither of the components in HQ Ruling 081193 imparted the essential character of the product.

The smaller, handbag style phonebag is classified as handbags, whether or not with shoulder strap, with outer surface of plastic sheeting, in 4202.22.15, HTSUSA. The larger, brief case style phonebag is classified as briefcases, attache cases and similar articles with outer surface of plastics in 4202.12.20, HTSUSA.

HOLDING:

The smaller, handbag style phonebag is classified as handbags, whether or not with shoulder strap, with outer surface of plastic sheeting, in 4202.22.15, HTSUSA. The larger, brief case style phonebag is classified as briefcases, attache cases and similar articles with outer surface of plastics in 4202.12.20, HTSUSA.

Sincerely,


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