MAR 2-05 CO:R:C:V 734327 RSD
Michael K. Tomenga, Esq.
Brian O'Shea, Esq.
McKenna & Cuneo
1575 Eye Street, N.W.
Washington, D.C. 20005
RE: Country of origin marking of imported sunglasses frames that
will be used to make finished sunglasses; inserting the
sunglasses lenses in the frames; substantial transformation;
trademarks; ultimate purchaser; 19 CFR 134.1; 19 CFR 134.35; 19
CFR 134.47; 19 CFR 134.36(b); HQ 733654; HQ 709965
Dear Mr. Tomenga and Mr. O'Shea:
This is in response to your letter dated August 29, 1991,
submitted on behalf of your client, Bausch & Lomb, concerning the
country of origin marking requirements for imported eyeglass
frames used to make non-prescription sunglasses. We regret the
delay in responding. You have furnished a sample of the eyeglass
frames and a sample of the completed sunglasses for our
consideration.
FACTS:
Bausch & Lomb manufactures finished non-prescription
sunglasses in the United States by using U.S. origin lenses and
imported frames. The sunglasses are sold under the brand name
"RAY-BAN U.S.A." All the frames that Bausch & Lomb imports will
be used for the manufacturing of its sunglasses. None of the
frames will be sold prior to the insertion of the lenses into the
imported frames and the manufacture of the completed sunglasses.
No other parties in the United States are licensed by Bausch &
Lomb to manufacture RAY-BAN U.S.A. sunglasses.
Each set of sunglasses frames will be imported in an
individual clear plastic polybag, which will be packed with other
frames in a master shipping carton. The master shipping carton
will be marked to indicate the country of origin of the frames.
The shipping carton will be delivered sealed and unopened
directly to Bausch & Lomb at its production facility in the
United States.
Each imported frame will be marked with the Bausch & Lomb
trademark, "RAY-BAN U.S.A." We have been informed that this
trademark is registered with the United States Office of Patents
and Trademarks. The trademark will appear on the temple of the
frame and/or on the top of the bridge. The mark may be engraved
into the frame or, with respect to certain plastic frames, may
appear in raised molded lettering. Generally, the mark will
appear in "blind" lettering (i.e. in colors that do not contrast
with the background of the frames), although in certain cases the
mark will appear in contrasting colors. The precise height of
the lettering of the trademark will depend upon the width of the
temple, but in all cases it will measure less than 1/8 of an
inch. Shipments of the frames that are the subject of this
ruling request will be imported at Rochester, New York and San
Antonio, Texas.
ISSUES:
Whether the imported sunglasses frames, normally excepted
from individual marking pursuant to 19 CFR 134.35, are subject to
marking because they display the trademark "RAY-BAN U.S.A."?
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 its 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. Congressional intent in
enacting 19 U.S.C. 1304 was "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." United States v. Friedlaender & Co. 27
C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and the exceptions of
19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines "country of origin" as the country of
manufacture, production or growth of any article of foreign
origin entering the U.S. Further work or material added to an
article in another country must effect a substantial
transformation in order to render such other country the "country
of origin" within the meaning of the marking laws and
regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in
manufacture which results in an article having a name, character
or use differing from that of the constituent article will be
considered substantially transformed and that the manufacturer or
processor will be considered the ultimate purchaser of the
constituent materials. In such circumstances, the imported
article is excepted from marking and only the outermost container
is required to be marked (See Section 134.35, Customs
Regulations).
The first question that must be resolved is who is the
ultimate purchaser of the imported eyeglass frames. In HQ 733654
(October 29, 1990), Customs ruled that the insertion of non-
prescription lenses into black nylon sunglasses frames in the
U.S. constitutes a substantial transformation. Bausch and Lomb,
in this case, is performing the same activity as was done in HQ
733654 by inserting non-prescription lenses into eyeglass frames
to make sunglasses. Therefore, in accordance with HQ 733654,
Bausch & Lomb would be substantially transforming the imported
frames. Pursuant to 19 CFR 134.35, Bausch and Lomb would be the
ultimate purchaser of the imported frames, and the frames would
be excepted from individual country of origin marking as long as
the outermost containers are properly marked.
Although an article which is substantially transformed in
the U.S. generally would be excepted from individual marking, the
Customs Regulations provide that an exception from marking shall
not apply to any article or retail container bearing any words,
letters, names, or symbols described in section 134.46 or 19 CFR
134.47 (e.g. geographic references) which imply that an article
was made or produced in a country other than the actual country
of origin. 19 CFR 134.36(b). Section 134.47, Customs
Regulations (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 purpose of
19 CFR 134.47 is to prevent the ultimate purchaser from being
misled by a reference to a place other than the country of
origin.
Under existing Customs policy, the presence of the trade-
mark "RAY-BAN U.S.A." on the imported sunglasses frames would
trigger the application of 19 CFR 134.36(b) and 19 CFR 134.47,
preventing the frames from being excepted from individual country
of origin marking. Customs has ruled that pursuant to 19 CFR
134.36(b), an imported article bearing any U.S. reference
(including trademarks) may not be excepted from marking even
though the article will be substantially transformed in the U.S.
prior to retail sale. In HQ 709965, (May 18, 1979), published as
C.S.D. 79-412, Customs ruled that valve bodies made in Canada
which were marked "Cleveland, Ohio, U.S.A." could not be excepted
from country of origin marking even though the ultimate
purchaser, the U.S. company that purchased and used the valve
bodies in the manufacture of automotive pressure relief valves,
knew the country of origin of the valve bodies and would not be
misled by the "Cleveland" marking. The rationale for this
determination was that the "final consumer" of the valves might
incorrectly conclude that the automatic pressure relief valve was
made entirely in the U.S. The ruling stated "because section 19
CFR 134.36(b) is to be strictly construed and the marking on the
valve body is potentially misleading to the final consumer there
should be compliance with the specific marking requirements of 19
CFR 134.46." This policy has been applied to situations where
the U.S. reference appears as part of a trademark or trade name.
After careful consideration, Customs has determined that
this policy pertaining to 19 CFR 134.36(b) should not be applied
automatically to all imported articles or their containers which
bear a non-origin geographical reference. For example, we
believe that this policy is inappropriate in cases such as the
one presented here where an imported article, bearing an
importer's trademark or trade name with a U.S. reference, will be
substantially transformed by the importer in the U.S. In such an
instance, the importer will be the ultimate purchaser, and if
there is sufficient evidence to establish that it knows the
origin of the article then the ultimate purchaser will not be
misled by the trademark or trade name and there is no reason to
require the article to be individually marked. So long as the
ultimate purchaser is advised of the country of origin of an
article (e.g., the ultimate purchaser receives the imported
article in a properly marked container) then the purpose behind
19 U.S.C 1304 will be fulfilled.
The term "final consumer" is not found within the framework
of 19 U.S.C. 1304 or its implementing regulations. Rather, 19
CFR 134.36(b) must be read as referring to words, symbols, etc.
which imply to the ultimate purchaser a country of origin other
than the actual country of origin of an article. In cases in
which the ultimate purchaser is arranging the importation of
articles to which his own trademark is affixed, there is no risk
that the ultimate purchaser will be misled as to actual country
of origin of the imported article. If markings which appear on
the substantially transformed articles are misleading to
subsequent purchasers, there exist other legal remedies which are
beyond the scope of Section 304 of the Tariff Act.
In this case, we find that the presence of the trademark
"RAY-BAN U.S.A." does not prevent the individual sunglasses
frames from being excepted from country of origin marking. The
importer, Bausch & Lomb, will be substantially transforming the
imported frames, and under 19 CFR 134.35, it is the ultimate
purchaser of the frames. Bausch & Lomb's trademark "RAY-BAN
U.S.A." on the frames will not imply to Bausch & Lomb that the
frames were made or produced in a country other than the actual
country of origin.
Bausch & Lomb has assured Customs that it is the only party
which will be using the imported frames to make sunglasses and
that it will not sell the frames to any one else. Moreover,
because the frames will be substantially transformed in the U.S.,
Bausch & Lomb is not obliged under 19 U.S.C. 1304 and 19 CFR Part
134 to indicate the foreign origin of the frames to subsequent
purchasers in the U.S. Accordingly, we find under 19 U.S.C. 1304
and 19 CFR Part 134, that the trademark does not convey
misleading, erroneous, or false information regarding the origin
of the frames or the finished sunglasses to the ultimate
purchaser and that the provisions of 19 CFR 134.36(b) do not
apply. If the marking on the containers for the frames is
conspicuous and otherwise proper, then the frames can be excepted
from marking. (See 19 CFR 134.32(d)).
HOLDING:
The presence of the trademark "RAY-BAN U.S.A." on the frames
is not misleading to the ultimate purchaser, Bausch & Lomb. If
the District Directors at the ports of importation are satisfied
that the frames will reach Bausch & Lomb in unopened containers
conspicuously marked with the country of origin of the frames,
then the frames can be excepted from individual country of origin
marking under 19 CFR 134.35 and 19 CFR 134.32(d) and the
provisions of 19 CFR 134.36(b) do not apply.
All rulings or the relevant sections of those rulings
applying the prohibition of 19 CFR 134.36(b) to articles imported
with trademarks or trade names bearing U.S. references and
substantially transformed after importation, which are
inconsistent with this ruling are revoked.
Sincerely,
John Durant, Director