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HQ 560791





April 29, 1998

MAR-02 RR:CR:SM 560791 RSD

CATEGORY: MARKING

Richard A. Walawender, Esq.
Miller, Canfield, Paddock and Stone, P.L.C. 150 West Jefferson, Suite 2500
Detroit, Michigan 48226

RE: Country of origin marking of imported bicycle chain; special marking for chain; marking exception for marking the containers; trademarks; 19 CFR 134.32(d); 19 CFR 134.46; 19 CFR 134.47

Dear Mr. Walawender:

This is in response to your letter dated October 30, 1997, on behalf of Globe Expo L.L.C. (Globe Expo) concerning the country of origin marking of bicycle chain imported from Poland. Globe Expo sent a sample of a link of bicycle chain and a box (with proposed marking thereon) in which the bicycle chain will be sold at the retail level. Subsequently, after consultation with this office, Globe Expo sent a copy of a letter with a mockup showing how they intend to alter the country of origin marking on the retail box. We have also received by facsimile a copy of Globe Expo's application for registration of a trademark with the United States Patent and Trademark Office. FACTS:

Globe Expo is a Michigan limited liability company which intends to enter into a distribution agreement with a Polish bicycle chain manufacturer. The company will import the bicycle chain and act as the distributor or sales agent for the bicycle chain in the United States. Globe Expo's trademark will be imprinted on every other link of the bicycle chain. The trademark consists of an oval with the letters "KAZ" printed in bold to encompass the entire space of the oval. As part of the trademark, at the bottom of the letters KAZ, breaking the perimeter line of the oval, the small letters "U.S.A." are printed. Nothing else will be printed on the linkage except for a small imprint of the date of production every 12 inches.

Globe Expo proposes to market and sell the bicycle chain in three ways. The first method of selling the chain would be at wholesale to distributors and manufacturers of bicycles. When the chain is sold to distributors and manufacturers, the chain would be shipped in bulk on large spools. It is presumed that purchasers of chain through this method will use it as original equipment when they manufacture bicycles. The top of each spool would be prominently marked by a sticker applied to the spool which indicates that the chain is made in Poland. The second method of selling the chain would be at wholesale to retailers of bicycle parts and supplies. In this method, the chain would be individually packaged in small boxes. Each box would be marked "Made in Poland". The third method of selling the chain would involve direct marketing or retail sales. The chain would be offered for sale either on a wholesale or retail basis through advertisements in trade publications. The advertisements themselves would not contain any indication regarding the country of origin of the chain. When the chain is shipped/imported; it would be marked with the country of origin as described above; that is, either marked on the spools if sold in bulk or on each individual box if sold as individual units.

The original sample of the retail box has only one country of origin marking on a side panel, which reads "Made in Poland" below the phrase "U.S.A. Enhanced". The front panel of the box has a large replica of the Globe Expo's trademark oval "KAZ U.S.A." printed on it. The box's back panel indicates that Globe Expo's warehouse and distribution center is located in Troy, Michigan. Another side panel has the sentence "THE COMPANY OPERATES UNDER ISO - 9001 STANDARDS REGISTERED BY GERMAN DQS STANDARD IN 1994" printed on it. Subsequently, Glob Expo revised the country of origin marking on the retail box for the chain. On the back panel of the revised box, which contains the Troy, Michigan address of its warehouse, the company also added the country of origin marking "MADE IN POLAND".

The company also presented copies of two stickers, one which will be used for marking the box and the other for marking the spools on which the chain will be shipped to bicycle manufacturers. They will be glued onto two sides of the boxes and onto two sides of the spools. The stickers for the boxes and the spools are very similar in that both have the trademark "KAZ U.S.A." oval printed on them. The stickers also indicate that the chains are produced and imported by Globe Expo L.L.C. and display the Troy, Michigan address. The country of origin of the chains are shown on the stickers through the marking "COUNTRY OF ORIGIN: MADE IN POLAND".

Your last submission indicates that an application for the Registration of the "KAZ U.S.A." trademark was filed with the United States Patent and Trade Office on February 17, 1998. The application contained a drawing of the mark to be registered and payment of the filing fee.

ISSUES:

Whether the special marking requirements for chain apply to bicycle chain.

Whether the special marking requirements of 19 CFR 134.46 or 19 CFR 134.47 apply to the bicycle chain, and if so, whether the requirements are satisfied by the proposed country of origin marking on the boxes, spools, and stickers.

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 (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its 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 the article. Part 134, Customs Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The primary purpose of the country of origin marking statute 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, C.A.D. 104 (1940).

The first issue that we must consider is whether the prior rulings that Customs has issued pertaining to special marking requirements for chain in general are applicable to the commodity involved in this case--bicycle chain. Customs has previously ruled that, under certain circumstances, chain is required to be marked by some permanent means such as die-stamping or metal tags attached to the chain at 6 to 10 foot intervals or less. See Headquarters Ruling Letter (HRL) 721119, February 3, 1983. In HRL 730615, August 20, 1987, Customs indicated that the following are acceptable methods of marking chain:

1. If the chain is sold in the same condition as imported, it is sufficient to mark the chain at one end.

2. If the chain is to be cut to various lengths prior to, or at the time of sale to the ultimate purchaser, the marking must be placed at intervals of
6 to 10 feet.

3. If the chain is to be cut to lengths less than 6 to 10 feet, each must be marked.

These methods must be used notwithstanding the fact that the containers for the chain may also be marked with the chain's origin.

After reviewing the rulings concerning the marking of chain, we believe that the special marking requirements described above should not be applied to bicycle chain. The apparent underlying reason for the special marking requirements for most types of chain is that there is a high probability that the country of origin marking would be removed before it reached the ultimate purchaser, especially in cases where the chain was to be cut to length before purchase. We do not believe that this is the case for bicycle chain because it is unlikely that it is going to be cut to length before purchase. Because it appears that bicycle chain is less likely than other
types of chains to have the country of origin marking removed before it reaches the ultimate purchaser, we conclude that the special marking requirements indicated in previous Customs rulings for chain in general do not pertain to bicycle chain.

The next issue to be addressed is whether the special marking requirements of 19 CFR 134.46 or 19 CFR 134.47 are triggered by the trademark "KAZ U.S.A." embossed onto the bicycle chains. In cases where there is a reference to a location other than the country of origin on imported merchandise, the special marking requirements set forth in sections 134.46 and 134.47, Customs Regulations (19 CFR 134.46 and 19 CFR 134.47), may be applicable.

On August 20, 1997, a final rule document, Treasury Decision (T.D.) 97-72 was published in the Federal Register (62 FR 44211) amending section 134.46 of the Customs Regulations to provide that the requirements of this section are triggered only if it is determined that the references to a locality other than the country of origin may deceive or mislead the ultimate purchaser regarding the actual country of origin of the article. The revised 19 CFR 134.46 reads:

In any case in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or location in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced appear on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, there shall appear legibly and permanently in close proximity to such words, letters or name and in at least a comparable size, the name of the country of origin preceded by "Made in," "product of," or other words of similar meaning.
(Emphasis added)

19 CFR 134.47 provides that:

When as part of a trademark or trade name or as part of a souvenir marking, the name of a location in the U.S. appears, the article shall be legibly, conspicuously, and permanently marked to indicate the name of the country of origin of the article preceded by the words "Made in," "Product of," or other similar words, in close proximity or in some other conspicuous location.

The critical difference between the two provisions is that 19 CFR 134.46, when applicable, requires that the name of the actual country of origin shall appear "in close proximity" to the non-origin reference and in lettering of at least comparable size. By contrast, 19 CFR 134.47, which applies regardless of whether the U.S. locality in the trade name may mislead or deceive the ultimate purchase, requires that the actual country of origin appear in close proximity or "in some other conspicuous location". In either case, the name of the country of origin must be preceded by "Made in", "Product of", or other similar words.

In this instance, you have provided evidence that an application for registration was filed with the United States Patent and Trademark Office. In HQ 734455 dated July 1, 1992, Customs considered whether the mere filing of a trademark registration was sufficient evidence to establish a trademark for purposes of 134.47. In that ruling, Customs held that "until further notice we will continue to accept a filed application with the U.S. Patent and Trademark Office as sufficient evidence of a trademark for the purposes of 19 CFR 134.47." Therefore, in this case, although only an application has been filed, Customs finds that the more general requirements of 19 CFR 134.47 apply as a result of the "KAZ USA" reference appearing on the chain itself, the box, and stickers. See also HRL 560161, dated January 27, 1997.

Because Globe Expo wishes only to mark the boxes or the spools in which the bicycle chains are sold rather than marking the bicycle chains themselves, we must consider whether such marking would be in compliance with 19 CFR 134.47. Due to the limited surface area on the links of the bicycle chain, we believe that putting a conspicuous, legible, and permanent marking on the bicycle chain itself would be difficult. Because any permanent marking on the chain itself would need to be in a small size, an ultimate purchaser is likely not to see it, and moreover, such marking may be difficult to read. In contrast, the markings on the stickers that will be put on the spools and boxes and the markings on the boxes themselves can be readily noticed from a casual inspection, and are easy to read. Accordingly, we find that in regard to the "KAZ U.S.A." trademark appearing on the chains, the boxes and the stickers, placing the country of origin marking on the boxes and spools as described above would satisfy the requirements of 19 CFR 134.47.

In addition, pursuant to 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), an exception from individual marking is applicable where the marking of the container of an imported article will reasonably indicate the origin of the article. This exception is normally applied in cases where the imported article(s) is imported in a properly marked container and the ultimate purchaser in the U.S. will receive it in its original marked container. If the ultimate purchaser receives the bicycle chain on a spool or in a box properly marked with the country of origin, the 19 CFR 134.32(d) container exception will be applicable.

We have also examined the country of origin marking on the revised sample box to see if it is in compliance with 19 CFR 134.46. On the same side of the revised retail box where the reference to Troy, Michigan is present, the country of origin marking "Made in Poland" will be printed in a comparable size. We also assume that the marking "MADE IN POLAND" will remain on side panel of the box where the phrase "U.S.A. ENHANCED" is printed. Therefore, we conclude that the country of origin marking on the retail box of bicycle chain sold to individual consumers is in compliance with the requirements of 19 CFR 134.46. Similarly, the mock-up of the stickers, which will be placed on the boxes and on the spools in which the chains will be sold to bicycle manufacturers show the country of origin marking in a comparable size, in close proximity to the U.S. address, and preceded by the words "Made in". Therefore the country of origin markings on the stickers satisfy the requirements of 19 CFR 134.46.

HOLDING:

The special marking requirements for chain do not apply to bicycle chain. Because an application for a trademark has been filed with the U.S. Patent and Trademark Office for the "KAZ U.S.A." oval, the requirements of 19 CFR 134.47 will be triggered by use of the "KAZ U.S.A." trademark on the bicycle chain, the boxes, and the spools. In this case, putting the country of origin marking on the boxes and the spools as described above will satisfy the requirements of 19 CFR 134.47. The requirements of 19 CFR 134.46 are triggered by the references to Troy, Michigan on the boxes and stickers and are satisfied by the country of origin markings demonstrated by the revised sample retail boxes and the stickers which will be used for the spools and the boxes.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Commercial Rulings Division

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