HQ 0734345 - Country of Origin Marking of Vitasoy Soy Drink Containers. Conspicuous Location; Trade Name; 19 CFR 134.1(d); 19 CFR 134.32(c); 19 CFR 134.41; 19 CFR 134.46; 19 CFR 134.47; C.S.D. 90-31; HQ 732329; HQ 732816; HQ 733840; HQ 733963; HQ 733909; HQ 734232; HQ 733618; HQ 732191; HQ 733084; HQ 708994; HQ 732899; HQ 733768; HQ 730091; HQ 724918; HQ 732917; HQ 733046; HQ 733990; HQ 733527; HQ 733889. - United States International Trade Commision Rulings

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HQ 734345

March 20, 1992

MAR-2-05 CO:R:C:V 734345 ER

CATEGORY: MARKING

Mary E. Wright, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Wright One Boston Place, Suite 1225
Boston, Massachusetts 02108

RE: Country of Origin Marking of Vitasoy Soy Drink Containers. Conspicuous Location; Trade Name; 19 CFR 134.1(d); 19 CFR 134.32(c); 19 CFR 134.41; 19 CFR 134.46; 19 CFR 134.47; C.S.D. 90-31; HQ 732329; HQ 732816; HQ 733840; HQ 733963; HQ 733909; HQ 734232; HQ 733618; HQ 732191; HQ 733084; HQ 708994; HQ 732899; HQ 733768; HQ 730091; HQ 724918; HQ 732917; HQ 733046; HQ 733990; HQ 733527; HQ 733889.

Dear Ms. Wright:

This is in response to your letters of September 19, 1991, February 5, 1992 and March 13, 1992, requesting a country of origin marking ruling for imported Vitasoy Soy Drinks.

FACTS:

The merchandise consists of Vitasoy Soy Drinks (1% Light or Regular). You submitted samples of the containers which normally contain the drinks. The words "Product of Hong Kong" appear at the bottom of a side panel directly below the distributor's address. The rear or side panel of Vitasoy (Regular) and the back panel of Vitasoy (Light) display the following, or similar, language:

For recipe ideas and
Product information, write:
Vitasoy (U.S.A.) Inc.
P.O.Box 552
Brisbane, CA 94005

Reference to "Vitasoy U.S.A. Inc." appears again on Vitasoy (Light) on the bottom left column of the back panel in connection with trademark and copyright information. The back panel of Vitasoy (Regular) contains one of the two following captions: "North America's first soymilk made with 100% organic soybeans." or "America's first soymilk made with 100% organic soybeans." (The packaging of Vitasoy (Light) makes no reference to "America's" or to "North America's".) Product containers may also feature a toll-free number for complaints.

Included in your second submission were samples of Vitasoy (Regular) containers which have an additional corrective country of origin marking affixed to the rear panel in the form of an adhesive label displaying the words "Product of Hong Kong". In your February 5, 1992 submission you claimed that placing the adhesive label on existing inventory would be time consuming, labor intensive and costly, and that shipping schedules would be adversely affected. Asserting economic hardship, you invoked section 134.32(c), Customs Regulations (19 CFR 134.32(c)) as a basis for allowing you a one year grace period in which to comply with the country of origin marking requirements for both existing inventory and for future printings of new containers.

Your third submission, dated March 13, 1992, contained proofs for the new packaging with additional country of origin markings appearing, in accordance with Customs instructions, on the same panel as the reference to "America's" or "North America's". You requested that Customs approve these proofs before Vitasoy places a new order for printed packages. By telephone conversation on March 18, 1992, Customs confirmed that the proofs comply with the country of origin marking requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304).

ISSUE:

Whether the country of origin marking, "Product of Hong Kong", presently appearing on a side panel of Vitasoy (Light) and (Regular) containers and to be added to the rear panel of Vitasoy (Regular) containers, satisfies the country of origin marking requirements of Section 304 of the Tariff Act of 1930, as amended.

Whether, under section 134.32(c), Customs Regulations (19 CFR 134.32(c)) a one year grace period should be extended to the importer in which to comply with the country of origin marking requirements of Section 304 of the Tariff Act of 1930, as amended.

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. By enacting 19 U.S.C. 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are 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. United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).

The "ultimate purchaser" is defined generally as the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d). In this case, since the product is sold at the retail level, the consumer is the ultimate purchaser.

Part 134, Customs Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. As provided in section 134.41, Customs Regulations (19 CFR 134.41), the country of origin marking is considered to be conspicuous if the ultimate purchaser in the United States is able to find the marking easily and read it without strain.

Of concern here are the requirements of two related provisions of the marking regulations, section 134.46, Customs Regulations (19 CFR 134.46) and section 134.47, Customs Regulations, (19 CFR 134.47). In the instant case, application of special marking requirements set forth in these provisions are triggered by the presence of the words "North America", "America" and "U.S.A." printed on the containers of Vitasoy. The purpose of both provisions is the same, namely to prevent the ultimate purchaser from being misled or deceived when the name of a country or place other than the country of origin appears on an imported article or its container. The critical difference between the two provisions is that 19 CFR 134.46 requires that the name of the actual country of origin appear "in close proximity" to the U.S. reference and in lettering of at least comparable size. By contrast, 19 CFR 134.47 is less stringent, providing that when as part of a trade name, trademark or souvenir mark, the name of a location in the U.S. or "United States" or "America" appears on the imported article, the name of the country of origin must appear in close proximity or "in some other conspicuous location". In other words, the latter provision triggers only a general standard of conspicuousness. In either case, the name of the country of origin must be preceded by "Made in", "Product of", or other similar words. As applied here, both provisions are triggered. The more stringent requirements of 19 CFR 134.46 apply where the words "North America's" or "America's" appear on the rear panel of Vitasoy (Regular), as described above. 19 CFR 134.47 applies where the words "Vitasoy (U.S.A.) Inc.", a trade name, appear as part of the distributor's address on the side panel of Vitasoy (Regular) and (Light) (immediately above the country of origin mark) and where the trade name appears twice, in connection with copyright and trademark information and recipe information, on the bottom rear panel of Vitasoy (Light).

For purposes of this ruling, the references to "U.S.A", "North America's" and "America's" that appear on the container can be isolated into three categories: (1) References provided in connection with information for consumer inquiries; (2) References provided in connection with promoting the product; and (3) References displayed in connection with a trade name.

With respect to the U.S. references made in conjunction with information provided for consumer inquiries, as you correctly point out in your letter, Customs' policy on the question of the presence of some U.S. addresses on labels was summarized in C.S.D. 90-31 (HQ 732809 (December 20, 1989)) where Customs indicated that under certain circumstances geographic names appearing in connection with imported articles do not necessarily trigger the requirements of 19 CFR 134.46. In that decision, Customs cited to several rulings including HQ 732329 (July 12, 1989), (address on a warranty card did not pose a risk of confusion to ultimate purchasers) and HQ 732816 (November 24, 1989), (address printed on display ticket was provided to assist customer in the event of questions concerning guarantees) where it was decided that the context in which the names and addresses were used was such that confusion regarding country of origin was not conceivable. In more recent rulings, Customs determined that certain information provided to enable consumers to contact the company regarding complaints or questions about the product did not trigger the requirements of 19 CFR 134.46. (See HQ 733840, (February 1, 1991) (where garment hang tags, which included a telephone number of the company and language which invited the consumer to contact the company for informational purposes, did not trigger the requirements of 19 CFR 134.46); HQ 733963 (January 7, 1991) (where a U.S. address on a hang tag was not misleading since it appeared in connection with a widely publicized customer assistance marketing campaign); HQ 733909 (January 15, 1991) (where a U.S. address of an environmental group on a hang tag was not misleading.)) In the instant case, the requirements of 19 CFR 134.46 are not triggered where the telephone number and/or the address for recipe information appear on the rear or side panel. These U.S. references do not connote origin since they are placed on the container in conjunction with language that clearly invites the consumer to contact the company for product information, thereby dispelling any potential confusion regarding country of origin.

However, falling into the second category, the reference to "North America's first soymilk..." or "America's first soymilk..." appearing on the rear panel of Vitasoy (Regular) does trigger the requirements of 19 CFR 134.46. The country of origin marking on the container fails to satisfy marking requirements because the rear panel bearing the reference to "North America's" or "America's" does not also display a mark identifying the country of origin. This office has a long standing practice of ruling that the close proximity requirements of 19 CFR 134.46 mean that the country of origin marking must appear on the same side or surface as the U.S. reference so that the information is viewable in one inspection of the box. (See HQ 734232 (November 20, 1991) citing to HQ 733618 (July 26, 1990) concerning soccer balls; HQ 732191 (April 27, 1990) concerning paint brush sets; HQ 733084 (March 19, 1990) concerning keywound alarm clocks; HQ 708994 (April 24, 1978) concerning product labels.)

In your letter of February 5, 1992, you refer to HQ 732899 (January 25, 1990) and HQ 733768 (June 18, 1991) which you cite for the proposition that Customs has, on a number of occasions, departed from the 'same panel' or 'same side' rule when such rule would lead to an unreasonable result. Those rulings can be distinguished from the present facts. The former ruling cited to, HQ 732899, involved clothing imported in sealed polybags. Information including that of country of origin was printed on the outside of the bags. In addition, the article itself was marked with the country of origin by means of a sewn-in label. A hang tag, folded in half, contained country of origin information on the back of the hang tag in conjunction with garment size, the company name and the copyright. The inside of the tag contained stateside addresses but did not include a country of origin marking. Customs allowed a departure from the "same surface" standard with respect to the hang tag because the ultimate purchaser had a clear indication of the origin of the article from the markings on the article itself, the plastic polybag, and on the back of the hang tag, and was likely to see these markings before reading the inside of the hang tag. Therefore, the country of origin marking on the back of the hang tag was not in violation of section 134.46, Customs Regulations (19 CFR 134.46) even though it did not appear on the same surface as did the American addresses. The likelihood that a consumer would see the sole reference to "Product of Hong Kong" appearing on a side panel of the Vitasoy container, is much more remote particularly in view of the fact that the references to "North America's first soymilk..." and "America's first soymilk..." on the rear panel are printed in either black bold letters or in red lettering of a print size larger than that of the other information provided. A consumer scanning the information on the box, would immediately be visually drawn to these American references and would likely fail to notice the country of origin of the article unless the marking also appeared on the same panel side as do the American references.

The second ruling you cite to, HQ 733768, involved references to places other than the country of origin on the packaging of a shirt. The shirt itself had a country of origin label sewn into the inside neck area, the correct location. The packaging, a fabric band wrapped around the shirt, bore a reference to "American Classics". There Customs found that the fabric band, which was not an integral part of the design of the shirt, displaying the words "American Classic" thereon, could mislead a consumer to the erroneous conclusion that the shirt was made in the U.S. But, because the shirt label clearly displayed the country of origin, in comparable size letters and was clearly visible at the same time as the "American Classic" marking, Customs found that any confusion that could result from the marking on the band was eliminated by the prominent country of origin marking in the neck area of the shirt. In the instant case, the country of origin marking is not clearly visible at the same time as the words "North America's" and "America's" since it appears on an entirely different panel. Thus, to comply with the requirements of 19 CFR 134.46, Vitasoy (Regular) containers must display an additional country of origin marking on the rear panel.

In your February 5, 1992 letter you point out that you believe no reasonable purchaser would be confused about the references to "North America's first soymilk" and "America's first soymilk". As authority, you cite to HQ 730091 (April 13, 1989) where Customs ruled that a reference to "A great American tradition since November 1985" on printed brochures advertising a variety of food and food-related items for sale would not likely confuse an ultimate purchaser as to the origin of the advertising brochure. There Customs found that the statement was referencing the presence in the U.S. of a particular supermarket chain. We do not consider this ruling to be applicable to the present situation. More analogous to the present situation is HQ 724918 (July 11, 1984) cited in that very same ruling, where Customs found that the phrase "Handcrafted American Oak Handle" printed on the blister pack of a kitchen utensil did invoke the application of 19 CFR 134.46. There, Customs found that a sufficient possibility existed that the phrase would confuse an ultimate purchaser as to the country of origin of the utensil since the phrase referenced the origin of a component of the utensil. Similarly in the instant case, the phrases "America's first soymilk" and "North America's first soymilk" contain the name of the commodity being promoted which would likely lead a consumer to believe that the soymilk is of U.S. origin. Thus, for the Vitasoy (Regular) containers to meet the marking requirements of 19 CFR 134.46, the country of origin marking, "Product of Hong Kong", must be added to the rear panel where the reference to "North America's" or "America's" appears, as well as maintained at its present location below the distributor's address. The samples displaying the proposed corrective means of marking (an adhesive label) existing inventory satisfy the marking requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C 1304). Assuming future Vitasoy (Regular) containers will be printed to include a country of origin marking in the same place on the rear panel where the adhesive label is displayed, they too will satisfy marking requirements.

Because the words "Vitasoy (U.S.A.) Inc." are a trade name, the requirements of 19 CFR 134.47 apply to the third category instead of 19 CFR 134.46. Copies of letterhead and envelopes which have printed on them "Vitasoy (U.S.A.) Inc." have been submitted as evidence. Based on this evidence, Customs believes that the importer is conducting business under the name "Vitasoy (U.S.A) Inc." and that it qualifies as a trade name. Since the trade name includes the reference to "U.S.A." on the container, the country of origin of the article must also appear on the container in a conspicuous location preceded by "Made in", "Product of", or other similar words. ( See HQ 732917 (May 11, 1990) regarding ceramic houseware and kitchenware articles.) The country of origin marking, "Product of Hong Kong", presently appears on only one side panel below the trade name featured in the distributor's address. In HQ 733046 (May 4, 1990), Customs ruled that since the trade name appeared on four different panels of a container, the placing of the country of origin mark on only one panel was not a conspicuous location and hence failed to meet the close proximity or conspicuous location requirements of 19 CFR 134.47. Customs ruled that the country of origin mark should appear on at least two panels of the container, so that it could be easily found and read. In the instant case, since the trade name appears on only two panels of Vitasoy (Regular) and (Light) containers, the existing country of origin marking on the (Light) containers and the prospective marking of the (Regular) containers (discussed above) satisfy the marking requirements of 19 CFR 134.47.

Your request to be excused from marking all of the existing inventory with the adhesive labels is denied. While you have cited to section 134.32(c), Customs Regulations (19 CFR 134.32(c)) as providing the basis for a one year grace period in which to perform the corrective marking, you have provided no supportive information regarding the economic hardship you assert your client would suffer were they to place the adhesive labels on existing inventory. 19 CFR 134.32(c) excepts from marking those articles that cannot be marked prior to shipment to the U.S. except at an expense economically prohibitive of its importation. The fact that such marking would result in economic hardship is not in and of itself sufficient to except the articles from the requirements of country of origin marking. See, HQ 733990 (June 17, 1991) and HQ 733527 (May 20, 1991). As pointed out in HQ 733889 (September 13, 1991):

Although relatively little has been written in explaining exactly what the term economically prohibitive means, several factors have been considered to help determine when marking an item would be economically prohibitive. These include situations in which the requirement to mark the article to indicate its country of origin would force the producer to incur a cost that would require the item to be marked at a price at which: (1) the item could not be sold since an individual would not buy it; (2) no profit could have been made; (3) the profit that could have been obtained would not have been sufficient to induce the importer to handle the item. See Note, Country of Origin Marking, 6 Law and Policy in Int'l Business 485, 501-502 (1974), citing Bur. Cust. Customs Information Exchange Ruling 114/51 (1951).

Therefore, in the absence of any information which establishes that it is economically prohibitive to mark the merchandise prior to its importation, existing inventory must be marked to comply with the country of origin marking requirements, subject to the delayed effective date discussed below.

Although there is insufficient evidence of economic hardship to merit a one year grace period for Vitasoy to conform its packaging, in light of the information submitted regarding the amount of time and degree of labor necessary to perform the corrective marking on the several thousand units shipped each week, Customs is willing to extend a reasonable delayed effective date, July 1, 1992, prior to which Vitasoy may continue to import containers without the corrective adhesive labels attached. In making this allowance, Customs has taken into consideration the fact that each non-conforming container nonetheless displays at least one country of origin marking. On or after July 1, 1992, all importations of the subject goods entered for consumption must fully conform with the country of origin marking requirements of 19 U.S.C. 1304, as set forth in this ruling.

HOLDING:

The country of origin marking requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), are satisfied so long as the country of origin marking, "Product of Hong Kong", appears legibly, conspicuously and permanently on the side panel of Vitasoy (Light) and (Regular) below the distributor's address, and appears legibly, conspicuously and permanently again on the rear panel of Vitasoy (Regular). All importations of Vitasoy entered for consumption or withdrawn from warehouse on or after July 1, 1992, must fully conform with the country of origin marking requirements of 19 U.S.C. 1304, as set forth in this ruling.

Sincerely,

John Durant, Director
Commercial Rulings Division

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