HQ 0734095 - Country of origin marking of transesophageal imaging transducers ("T-Probes") imported from Holland and made with U.S. component; clearly indicate country of origin; 19 U.S.C. 1304; 15 U.S.C. 1124; confusing/deceptive country of origin marking; HQ 733266; HQ 733981; American Burtonizing Co. v. United States - United States International Trade Commision Rulings

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HQ 734095

February 18, 1992

MAR-2-05 CO:R:C:V 734095 AT

CATEGORY: MARKING

William D. Outman, II, Esq.
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078

RE: Country of origin marking of transesophageal imaging transducers ("T-Probes") imported from Holland and made with U.S. component; clearly indicate country of origin; 19 U.S.C. 1304; 15 U.S.C. 1124; confusing/deceptive country of origin marking; HQ 733266; HQ 733981; American Burtonizing Co. v. United States

Dear Mr. Outman:

This is in response to your letters dated March 21, 1991 and June 20, 1991, on behalf of Hewlett Packard Company (Hewlett Packard) requesting a binding and prospective ruling on the country of origin marking of T-Probes imported from Holland. A sample T-Probe in its case was shown to us during a meeting. For purposes of this ruling, it is assumed that the country of origin of the T-Probe is Holland.

FACTS:

Hewlett Packard imports medical testing devices called T- Probes from Holland. As imported, the T-Probe contains two different country of origin markings: A "Made in Holland" marking and a "Made in USA" marking. The "Made in Holland" marking clearly appears in large letters on a metal plate affixed to the connecting element of the device (the connector). The plate also provides technical data and care instructions. The "Made in USA" marking is molded into the plastic housing of the gastroscope component of the T-Probe. The U.S. marking is less readily apparent than the "Made in Holland" marking on the metal plate; however, it can be readily seen if one was to examine the T-Probe.

The sample T-Probe you showed us was presented in a carrying case. You indicated that the T-Probe is both imported and sold in this case. When the case was opened, the "Made in Holland" serial plate on the connector was in plain view and the "Made in USA" marking is hidden from view. In order to see the "Made in USA" marking, the T-Probe must be removed from the case.

You indicate that the gastroscope, the component on which the "Made in USA" marking appears, is manufactured in the U.S. and that the marking is molded into the plastic housing at the time of manufacture. You further indicate that this marking is the standard marking applied by the U.S. manufacturer both to the gastroscope it sells to the medical industry as "stand-alone" units or for "further fabrication" into integrated medical systems as in this case. You claim that if the foreign manufacturer of the T-Probes was to remove the "Made in USA" marking, it could cause damage to the delicate electronics in the unit itself. You also claim that sales to Hewlett Packard are not of sufficient volume to warrant the U.S. manufacturer to modify its manufacturing process to remove the "Made in USA" marking from the housing.

You claim that deception plays no role in the marketing, purchase or use of the T-Probe. If one examines the unit and is interested in ascertaining the country of origin of the article he will find the words "Made in Holland" in plain view on the exposed surface of the serial plate of the connector. In contrast, the gastroscope has to be removed from the case and positioned at just the right angle for the eye to perceive the words molded in the plastic housing. Assuming the words were to be noted, you claim that it is simply not credible to suggest one would be confused, or even worse convinced after seeing what was difficult to view, that the other patently obvious representation must be incorrect. Therefore, you contend that the marking on the T-Probes clearly satisfies the country of origin marking requirements and there is nothing misleading or deceptive in the use in this context of the gastroscope which is also properly marked with its particular country of origin.

Finally, you contend that country of origin is not a fact influencing the purchasing decision nor has there been any report of confusion over the country of origin. You indicate that the T-probes are marketed by Hewlett Packard through its own sales force which are all highly-educated professionals. Some have engineering backgrounds while others have medical qualifications such as sonography training or clinical experience using sonographic imaging. These sales personnel call on cardiologists, anesthesiologists and other professionals typically attached to an echo laboratory in a hospital or medical
clinic. Further, the product itself is not a device purchased by the masses or the uninformed. The units are extremely expensive (about $30,000) and are only purchased by users having the educational levels and backgrounds that permit them to make informed purchasing decisions.

ISSUE:

Whether the marking "Made In Holland" printed on the serial plate attached to the connector satisfies the marking require- ments of 19 U.S.C. 1304.

Whether the marking "Made in U.S.A." which appears on a U.S. component of the T-Probe violates 15 U.S.C. 1124.

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 (emphasis added). The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229 (1988): "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 C.C.P.A. 297 at 302, C.A.D. 104 (1940): "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."

With regard to the requirement to indicate the country of origin, the Court of Customs Appeals has stated:

Obviously, the purpose of section 304, which goes into great detail as to how the marking shall be done, was to require a marking such as would be understood by purchasers of foreign-made goods as giving definite and reliable information as to the country of origin. It is not reasonable to suppose that Congress, by the use of the word "indicate"
meant only that the words used should hint at the country of origin. The object sought to be obtain- ed by the legislature could best be obtained by an indication which was clear, plain, an unambiguous and which did more than merely hint at the country of origin (original emphasis added).

American Burtonizing Co. v. United States, 13 Ct. Cust. Appls. 652, T.D. 41489 (1926).

The first question presented in this case, is whether the marking "Made in Holland" printed on the connector satisfies the marking requirements of section 1304 when the marking "Made in U.S.A." appears on the plastic housing. We find that it does not. Although the country of origin marking "Made in Holland" would satisfy section 1304 if it was the only marking on the article, in this case, two country of origin markings exist on the T-Probe, a "Made in Holland" marking on the connector, and a "Made in U.S.A. marking on the gastroscope. If an ultimate purchaser was to examine the article, the country of origin of the article is not clear, plain, or unambiguous, and the marking "Made in Holland" does not indicate the country of origin as required by 19 U.S.C. 1304.

Customs considered a similar question in HQ 733266 (August 15, 1990) regarding the country of origin marking of engines from Brazil which were comprised of several component parts which were manufactured in various countries other than Brazil. The component parts of the engine were marked with the country of origin from where they originated. In Brazil, these component parts were used in the manufacture of the engines. The country of origin marking of the components remained visible on the finished engine. A metal data plate containing pertinent information on the engine was permanently affixed to the finished engine. On the metal data plate, "Manufactured by Cummins Brazil S.A." was inscribed. Customs determined that the various markings on the engine would be confusing to the ultimate purchaser and that the engines were not marked in accordance with the requirements of 19 U.S.C. 1304. In order to satisfy the requirements of 19 U.S.C. 1304 to indicate the country of origin, Customs found that the engine should be conspicuously marked "Engine made in Brazil" and that an additional explanation was necessary to clarify that the country marking on the components referred only to the country of origin of the components (e.g. "Engine Made in Brazil- Country of Origin of Component Parts as Marked").

We disagree with your claim that due to the fact that the T-probes are extremely expensive and are purchased by users having the educational levels and backgrounds that permit them to make informed purchasing decisions that clear country of origin marking is not required. The fact still remains that since the imported article is of foreign origin it must comply with the marking requirements of section 1304 irrespective of the value of the article or the educational level and background of the ultimate purchaser. As stated above, two country of origin markings exist on the T-Probe making it unclear and ambiguous as to what is the true country of origin of the article.

Two alternative methods are available to bring the imported product into compliance with the requirements of 19 U.S.C. 1304. First, the "Made in U.S.A." marking on the gastroscope could be permanently obliterated or concealed in some fashion which would provide the ultimate purchaser with a clear and unambiguous indication as to what is the true country of origin of the T- Probe satisfying the marking requirements of section 1304. Alternatively, an additional explanation could be placed on the serial plate to clarify that the U.S. marking on the gastroscope refers only to the country of origin of the gastroscope. For example, the serial plate could read "Made in Holland- Gastroscope Component Made in U.S." This would be an acceptable way to mark the T-Probes since the country of origin would be clear, plain and unambiguous to the ultimate purchaser upon examination of the article. Customs has allowed this type of modified country of origin marking in the past to clarify the true country of origin to the ultimate purchaser. In HQ 733981 (June 3, 1991), Customs ruled that imported subassemblies made in Mexico with switches made in the U.S. and bearing a "Made in USA" marking were not excepted from marking under 19 CFR 134.35 or 19 CFR 134.32(h). In addition, Customs stated that in order to comply with the requirements of 19 U.S.C. 1304, the switches had to marked in a manner which clearly indicated that the country of origin was Mexico and that only the switch was of U.S. origin (e.g. "Assembled in Mexico"; "Switch Made in USA"). See also HQ 733266, supra.

The second question presented in this case is whether the marking "Made in U.S.A." printed on the U.S. made gastroscope component of the completed T-Probe also marked "Made in Holland" is in violation of 15 U.S.C. 1124.

This section provides in pertinent part that imported merchandise which "shall bear a name or mark calculated to induce the public to believe that the article is manufactured in the United States . . . shall not be admitted to entry." Whether merchandise is violative of this provision must be decided on a case-by-case basis and the totality of the circumstances presented in the specific case must be taken into account. While
there is no general test to be applied, in this case we find that the USA mark is not calculated to induce the public to believe that the T-Probe was made in the United States based on the following: 1) the "Made in USA" mark appears on a U.S. made component and such mark was affixed at the time the component was manufactured; 2) the "Made in USA" mark is the standard mark used by the U.S. manufacturer; 3) the T-Probe is conspicuously marked "Made in Holland" on the serial plate; and 4) the "Made in Holland" on the serial plate of the T-Probe is more readily apparent than the "Made in USA" mark on the housing of the gastroscope.

HOLDING:

Because of the "Made in U.S.A." marking on one of the components of the T-Probe, the country of origin marking "Made in Holland" printed on the serial plate attached to the connector does not give the ultimate purchaser a clear, plain and unambiguous indication of the country of origin of the T-Probes. In order to satisfy the requirement of 19 U.S.C. 1304 to indicate the country of origin, additional information is necessary to clarify that the T-Probe is made in Holland and only the gastroscope component is made in the U.S. A marking such as "T- Probe Made in Holland-Gastroscope Component Made in U.S." or removal of the "Made in U.S.A." marking on the gastroscope is required.

For the reasons stated above, the "Made in U.S.A." marking on the U.S. component of the T-Probe is not in violation of 15 U.S.C. 1124.

Sincerely,

John Durant, Director

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