Customs Law

Usually, a patent dispute involving imported merchandise gets resolved by the International Trade Commission in what is known as a Section 337 ( 19 USC 1337 ) case. The relief in a successful 337 case is most often an "exclusion order," prohibiting the importation of the infringing merchandise. An exclusion order can be general or limited. A general exclusion order prohibits all specified merchandise, even merchandise made or imported by entities that were not party to the action. A limited exclusion order prohibits the importation of specified merchandise by entities named in the order. An ITC decision in a 337 case may be immediately appealed to the U.S. Court of Appeals for the Federal Circuit, which is also the court that decides appeals from the Court of International Trade. Often, the exclusion order is all the relief the patent owner needs. It protects the market from the infringing foreign product and allows the patent holder to enjoy the intended benefit of exclusi...

Who doesn't like a good value case now and again? Value cases are kind of like Star Wars movies; they pop up once every few years and move the story along a little bit at a time. Sometimes, we get a new perspective from an upstart judge and sometimes a veteran steps back in to right the ship until the inevitable reboot. It seems like it is have been a while since the Court of International Trade weighed in on what constitutes a dutiable addition to value. So, it is a good time for us to catch up on Trimil, S.A. v. United States and see what is truly cannon and what it part of the expanded universe of valuation legends (AKA CBP rulings). And, always remember that the Star Wars saga begins with a trade war . This needs to be quick, as I am going to the movies soon (as you might have guessed). Trimil (who, with no judgment, I picture as an individual looking like Watto ) is an importer of Armani branded clothing. At the time of entry (including the subsequent reconciliation), Tri...

Prysm, Inc. v. United States , answers the question, "Are those cool looking video walls that show up in office building lobbies, hotel lobbies, and fancy conference centers monitors of the sort that are used with computers?" The answer, at least as far as the Court of International Trade is concerned, is no. Here is an image, from the Prysm website, of what the case is about. Technically, that device is a Display Wall System made up of laser phosphor display ("LPD") tiles and a proprietary image processor. The image processor accepts an incoming signal, converts it to Prysm's proprietary format, and sends it on to the LPD. The imported merchandise subject to this case is just the LPD tile, not the entire system. Prysm contends that the LPD is properly classified as a part of a monitor in Heading 8529. In the alternative, Prysm contends that the LPD is classifiable in Heading 8528 as a monitor of a kind solely or principally used in an automatic data pr...

The penalty case against Greenlight Organic Inc. and now its owner and president seems to be a case that will not end. For background, read the previous posts here and here . This issue raised in the most recent Court of International Trade decision has to do with a penalty claim the United States is asserting against Mr. Parambit Singh Aulakh, the owner and president of the importer. The case against Mr. Aulakh is premised on the allegation that Greenlight, under the direction of Mr. Aulakh, misclassified and undervalued shipments of athletic apparel on approximately 122 entries. There are two Court rules in play in this phase of the case. To survive a motion to dismiss under CIT Rule 12(b)(6) , the complaint must contain sufficient factual matter to state a claim to relief that is plausible on its face. That means the complaint must contain assertions of facts that allow the Court to draw a reasonable inference that the defendant is liable. It is not enough for the plaintiff to...

Remember when the President imposed tariffs on steel and aluminum under Section 232? He did so following a Commerce Department study showing that imports of steel and aluminum suppress domestic production far enough below capacity to be a threat to the national security. The steel tariffs were set at 25% and the aluminum tariffs at 10%. Here is Proclamation 9705 . Those tariffs remain largely in place. In August of 2018, the President followed up with Proclamation 9772 , which doubled the tariff on steel from Turkey to 50%. In Transpacific Steel LLC   v. United States , an importer of Turkish steel challenged that increase and sought a refund of the difference. The bases for the challenge are, among other things, that singling out importers of products from Turkey violates the Equal Protection Clause of the Fourteenth Amendment and that the President’s failure to follow required procedures violates the Due Process clause of the Fifth Amendment. The United States moved to dis...

Home Products International, Inc. v. United States is one of those cases that causes much head scratching and some gnashing of teeth. There is a long-recognized principle of customs law that once Customs and Border Protection liquidates an entry, that liquidation is final as to all parties. That principle is enshrined in law at 19 USC 1514(a) , which says, in relevant part, that a liquidation: shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section, or unless a civil action contesting the denial of a protest, in whole or in part, is commenced in the United States Court of International Trade in accordance with chapter 169 of title 28 within the time prescribed by section 2636 of that title . . . . The problem is Home Products stems from the fact that after 10 years of apparently hard-fought litigation in the Court of International Trade, the Court issued a judgment that t...

[Updated, but just to fix my terrible typing.] First, let's get the easy part out of the way. Yes, I am alive. My side projects, including this blog, have been collateral damage in the trade war. I have been diligently working on client matters and other projects. I'm not sorry for that, but I am unhappy it has reduced my blog to a shadow of what I want it to be. I never want the blog to be stale, but it happens. I will note that there have been very few customs decisions from the Court of International Trade and Court of Appeals for the Federal Circuit. On the other hand, there have been a few trade cases that have important implications for importers and, you may have noticed, there have been a lot of agency and presidential actions. Be sure to watch my Twitter feed for breaking news. In the meantime, I am trying to get rolling again. Speaking of rolling, let's talk about the recent ruling Customs and Border Protection issued to Volvo. The ruling is HQ H302821 (Jul. ...

These days, marketers describe everything as "smart." There are smart televisions , a smart toaster , and even a smart toothbrush . The question is, how smart do these devices (or their parts) have to be to turn them into automatic data processing machines, or as normal people call them, "computers?" That is the question presented, at least in this summary, in Fanuc Robotics America, Inc. v. United States . We have talked about the complexity that is ADP classifications a number of times. Go back and read this and this . The gist of this case is that Fanuc makes industrial robots (really robot arms) that do industrial robot tasks like spot welding, painting, and materials handling. The robot is not a general purpose device that can, if properly programmed, perform other tasks like playing ping pong , mixing cocktails , or doing your yard work . For that, you need a Class M-3 Model B-9 Non-Theorizing Environmental Control Robot . Personally, I like the u...

Tariff classification litigation sometimes takes a relatively long time to run through the system. To be clear right at the top, I am not complaining about that. The pace is usually set with the consent of the parties. Classification cases do not involve the loss of liberty or property, no families are at risk, no one is being deported. Many of the usual policies that encourage speedy action simply do not exist. No one wants cases to needlessly languish. If the plaintiff wins, the public does end up paying interest with the refunds. On the other hand, the United States had been holding that money improperly. Also, if either party has a reason to press for a quick resolution, or it is clear that the case is amendable to a quick resolution, there are tools to make that happen. Occasionally, the time it takes to litigate a case changes the facts on the ground. Moen, Inc. v. United States is an interesting example of that phenomenon. The case involves the classification of showerheads. ...

New Image Global, Inc. v. United States is the sort of case we do not often see from the Court of International Trade. For starters, it involves excise taxes on tobacco rather than customs duties. Second, the challenge relates to Customs and Border Protection’s laboratory methodology. In the end, there is nothing groundbreaking here. It is, however, a good reminder that there are remedies available in the Court of International Trade that go beyond refunds for incorrect classifications. It also illustrates that pleadings matter. Finally, the case gives me an opportunity to go on a rant about the importance of good science in the courtroom and elsewhere. The tax at issue is applicable to tobacco products and is assessed based on weight. The plaintiff imported tobacco “wraps,” which are tobacco products used to wrap other tobacco as cigarettes or cigars. The wraps as imported were packaged to retain moisture to let them be pliable enough to use as wrappers and also contained cert...

Lawyering is sometime a creative endeavor. As regulatory lawyers, that does not happen often enough. We rarely get the satisfaction of helping individuals resolve issues that impact their personal liberty or property. That’s OK. I am perfectly happy without a lot of human drama in my practice. On the other hand, I do enjoy stretching my creative lawyering skills. In Erwin Hymer Group North America, Inc. v. United States, counsel for the plaintiff probably had some fun dealing with the issue presented. A reasonable way of describing what happened is this: Customs erroneously approved a protest that should have been suspended. When it failed to pay a refund on the protested entries, Hymer sued. Hymer’s argument comes done to the ancient proposition of school-yard jurisprudence “No take backs.” As with all these procedural cases, the facts matter. When Hymers filed its protest, there was litigation already pending in the Court of International Trade on a similar question. Hymers...

Today, riders are tackling the 14th stage of the Tour du France, climbing the col du Tormalet in the Pyrenees toward the village of Bareges. Take a look at the photos at this link . See how Peter Sagan (green jersey) and Vincenzo Nibali look somewhat tired? The best I could hope to do on this route is flag down the SAG wagon for a ride to the next lunch stop. The graphic below shows the elevation profile. According to the commentators, the first time this hill was included in the Tour, the stage winner called the race organizers "murderers." Clipped from https://racecenter.letour.fr Do you know what these guys are missing? A way to carry a toddler up the col. If they wanted to bring the kids along for the ride, they could opt for the WeeRide Kangaroo Center-Mounted Bicycle-Child Carrier . From WeeRide.com This video shows the WeeRide in action and makes me think I did parenting all wrong: Which brings me to Kent International, Inc. v. United States , ...