CLA-2 RR:CR:GC 964679 KBR
Mr. Sidney H. Kuflik
Lamb & Lerch
233 Broadway, 51st Floor
New York, New York 10279
RE: Reconsideration of NY G82468; Digital Game Pen
Dear Mr. Kuflik:
This is in reference to your letter dated November 16, 2000, on behalf of Advance Watch Co., Ltd., in which you requested reconsideration of New York Ruling Letter (NY) G82468, issued to you by the Customs National Commodity Specialist Division, dated October 13, 2000, concerning the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of digital game pens. In preparing this ruling, consideration was given to arguments presented in our meeting on February 26, 2001, and to your additional submission dated February 28, 2001.
FACTS:
The products involved are described as “digital game pens”. The digital game pens are a composite article consisting of two components, an electronic game and a ball point pen. The entire length of the article is approximately 5 ¾ inches. It has a 1 inch x ¾ inch LCD screen on which a game may be viewed. It has 3 buttons and a toggle switch to activate and play the game. The pen’s writing tip is exposed and retracted by turning the barrel of the article’s lower body. The article is packaged in a clear plastic blister package. The front of the packaging states “Z Screen Digital Game Pens”, “Realistic Sound Effects”, “Interactive Real World Controls”, “refillable Ballpoint Cartridge” and across the bottom in large letters which of seven types of game it is, i.e.: “RACING” or “SKATEBOARDING”. The rear of the packaging is covered approximately ¾ with instructions for operating the game feature and replacing the game battery. In a small box appear directions for operating the pen and replacing the ink cartridge.
ISSUE:
What is the classification for the digital game pen?
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
Inspection of the digital game pen reveals that it is a composite article made up of an electronic game piece and a ballpoint pen and that each of the components are classifiable under a different heading within the HTSUS.
The HTSUS headings under consideration are as follows:
9504 Articles for arcade, table or parlor games, including pinball machines, bagatelle, billiards and special tables for casino games; automatic bowling alley equipment; parts and accessories thereof:
Other
Game machines, other than coin- or token-operated; parts and accessories thereof
9608 Ball point pens; felt tipped and other porous-
tipped pens and markers; fountain pens, stylo-
graph pens and other pens; duplicating styli;
propelling or sliding pencils (for example,
mechanical pencils); pen-holders, pencil-holders
and similar holders; parts (including caps and
clips) of the foregoing articles, other than
those of heading 9609:
9608.10.00 Ball point pens
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Because the item is a composite good, we turn to GRI 3(b) which states that when goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a) [by reference to the heading which provides the most specific description], shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
Under EN Rule 3(b)(VII), goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
Under EN Rule 3(b)(VIII), the 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.
Under GRI 3(c), when goods cannot be classified by reference to GRI 3(a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
You submit that because of the electronic game feature in the barrel of the pen, the article be classified as a toy under heading 9504, HTSUS. You contend that these components provide manipulative play value or frivolous characteristics of toys and serve as the primary focus of the article. Further, the game features provide the article with its essential character. You refer to the bulk of the article, weight, marketing and prominence, instructions, pricing, consumer expectations, servicing and refilling the ink cartridge, as evidencing the greater significance of the toy features to that of the pen.
However, “it has long been Customs practice to classify utilitarian objects with toy-like motifs or play features as the functional object they are.” HQ 958751 (December 24, 1996). Customs has previously found that this type of article, a pen with novelty features, is classified as a pen in subheading 9608.10.000, HTSUS. See e.g., HQ 960828 (July 14, 1998). In another novelty pen case, HQ 958751, issued December 24, 1996, Customs held that the article should be classified as a toy. However, the “Talkboy F/X Recording Pen” (Talkboy) which was the subject of that ruling can easily be distinguished from the article currently under consideration. With a stated retail price of $20.00, the Talkboy article was comparatively highly priced for a writing instrument. The complex electronic recording and sound producing features of the Talkboy far exceed the simplistic game of the instant digital game pen. The components and audio capabilities of the Talkboy were determinative factors which resulted in the decision that its amusement features outweighed its utilitarian functions.
In the instant case, we find that the costs, size and weight you associate with the game feature may also be applied to the pen feature. The game comprises the barrel of the pen, necessary for holding and balancing the pen for use. Therefore, the size, costs and weight of the housing of the game features may also be attributed to the pen feature. Further, while the cost, bulk and weight are factors to consider, they are by no means overriding. See e.g., HQ 954476 (October 1, 1993); HQ 955034 (October 3, 1993). We also note that some of the costs and pricing are based on suggested retail price which is not a reliable measure since a check of actual sales prices of similar articles shows these articles or their components available at a discounted price. The cost comparison to other novelty pens rather than other generic pens would be a more accurate comparison as well. We also note an inconsistency in the argument where on one hand the inexpensiveness of the ink cartridge is cited yet on the other hand, the expensiveness of the ink refill is touted. Further, the ink refills are available now in ‘cut to fit’ format at an inexpensive price.
Comparing the game and the pen, we find the game to be of the most basic, primitive type. The controls are small and difficult to manipulate. Someone who only wanted to buy a game would not buy this article. A user is also not likely to send the article for repairs if either the pen or the game feature fails to operate.
The marketing and prominence of the features is comparatively equal. The entire product is displayed and both features are prominently touted. As to the instructions on the back of the packaging, just because one feature requires more directions for use does not make that feature more important, only more complex to use. The use of a pen is common and routine, however, simplicity of operation does not detract from an object’s usefulness or worth.
In addition, you argue that Chapter 96 Note 1(l), HTSUS, states that the chapter does not cover “Articles of chapter 95 (toys, games, sports equipment)”. It follows, you argue, citing Avenues in Leather, Inc. v United States, 11 F. Supp. 2d 719 (CIT 1998), aff’d 178 F.3d 1241 (Fed Cir. 1999), that if an article could be classified in both chapter 95 and chapter 96, Note 1(l) would eliminate chapter 96 from consideration. This is not the correct interpretation of Note 1(l). This Note applies when the entire article is classifiable in both chapters, which is not the case here. In Avenues in Leather, the court found that the article was only classifiable under one heading and therefore the exclusionary Note was inapplicable. See Avenues in Leather, Inc, 178 F. 3d at 1246. The court found that the exclusionary rule must be used in a “complementary role” to a substantive analysis. You cannot apply the exclusionary Note prior to determining that the article as a whole is classifiable in that heading. See Sharp Microelectronics Technology, Inc. v United States, 122 F.3d 1446, 1450-1 (Fed Cir. 1997); see also, Avenues in Leather, Inc. 178 F.3d at 1246. In the instant case, the pen and game form a composite article, described in part by two different headings in two different chapters. Thus, exclusionary Note 1(I) cannot be applied until the more specific heading is found. The court specifically ruled out using an exclusionary Note as a “tie-breaker” as you would use the Note. Sharp Microelectronics Technology, Inc., 122 F.3d at 1450-1; see also, Avenues in Leather, Inc. 178 F.3d at 1246.
In this case, we find that after looking at all the factors, the digital game pen does not have one essential character. Both the game component and the pen component merit equal consideration. Therefore, pursuant to GRI 3(c), the digital game pen is classifiable under the heading which occurs last in numerical order, heading 9608, HTSUS. Since we find that the digital game pen is not classifiable within chapter 95, it will not be excluded by Note 1(I), HTSUS, from being classified in chapter 96.
HOLDING:
In accordance with the above discussion, the digital game pen is classified in subheading 9608.10.00, HTSUS, as a ball point pen.
NY G82468 is affirmed.
Sincerely,
John Durant, Director
Commercial Rulings Division