Xerox Corp. v. United States

Slip Op. 15 - 132
UNITED STATES COURT OF INTERNATIONAL TRADE
:
XEROX CORP. :
:
Plaintiff, :
:
v. : Before: R. Kenton Musgrave, Senior Judge
: Court No. 05-00474
UNITED STATES, :
:
Defendant. :
:
:
OPINION
[On customs duty classification of certain static converters, judgment for the plaintiff.]
Decided: November 23, 2015
John M. Petterson, Elyssa R. Emsellem, Maria E. Celis, Richard F. O’Neill, and Russell
Andrew Semmel, Neville Peterson, LLP, of New York, NY, for the plaintiff.
Marcella Powell, Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington DC, for the defendant. On the brief were Benjamin C. Mizer,
Acting Assistant Attorney General, and Amy M. Rubin, Assistant Director. Of counsel on the brief
was Chi S. Choy, Attorney, Office of the Assistant Chief Counsel for International Trade Litigation,
U.S. Customs and Border Protection, of Washington DC.
Musgrave, Senior Judge: Cross-motions for summary judgment before the court
concerning an entry of two “pre-clean dicorotron high voltage power supply” units imported through
the Port of New York in year 2004 dispute the customs duty classification thereof under the
Harmonized Tariff Schedule of the United States (“HTSUS”).1 The parties agree that the power
1
Unless otherwise indicated, all references herein to headings, subheadings, chapters,
sections, and notes are to those of the year 2004 version of the HTSUS.
Court No. 05-00474 Page 2
supplies are static converters covered by heading 8504 (“[e]lectrical transformers, static converters
(for example, rectifiers) and inductors; parts thereof”) and suitable for physical incorporation into
the plaintiff’s “iGen3 Digital Production Press.” The subheading appropriate for their classification
depends upon the classification of the iGen3. Thus, the dispute is over whether the units are entitled
to duty-free entry under subheading 8504.40.60 as “power supplies for automatic data processing
machines or units thereof of heading 8471”, or whether they are subject to 1.5% ad valorem customs
duties under subheading 8504.40.95 as “other” static converters (i.e., for machines not of heading
8471). U.S. Customs and Border Protection (“Customs”) having classified the power supplies under
the latterk, and having denied the plaintiff’s protest thereof, the plaintiff having timely filed and its
summons and complaint, predicated upon payment of all liquidated duties, charges and fees,2
jurisdiction is here properly invoked upon 28 U.S.C. §§ 1581(a) and 2631(a). For the following
reasons, the plaintiff persuades that judgment in its favor is appropriate.
I. Standard of Review
The court reviews Customs’ protest decisions de novo. 28 U.S.C. § 2640(a)(1).
Classification for customs duty purposes is a two-step process of determining the meaning of
relevant tariff provisions (a question of law) and determining whether the “nature” of the
merchandise (a question of fact) falls within the tariff provision as properly construed. E.g., Orlando
Food Corp. v. United States, 140 F.3d 1437 (Fed. Cir. 1998).
Proper classification under the HTSUS is directed by the General Rules of
Interpretation (“GRIs”) and, if relevant, the Additional U.S. Rules of Interpretation (“ARIs”). E.g.,
2
See Compl. ¶3; Ans. ¶3.
Court No. 05-00474 Page 3
Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed. Cir. 1998). The GRIs are not
optional but statutory,3 and they are applied in numerical order. See Honda of America Mfg. v.
United States, 607 F.3d 771, 773 (Fed. Cir. 2010). GRI 1 provides that a tariff classification, “shall
be determined according to the terms of the headings and any relative section or chapter notes.”4 GRI
6 also provides in relevant part that “the classification of goods in the subheadings of a heading shall
be determined according to the terms of those subheadings and any related subheading notes and,
mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level
are comparable.”
“The terms of the HTSUS are construed according to their common commercial
meanings.” Millenium Lumber Distribution Ltd. v. United States, 558 F.3d 1326, 1329 (Fed. Cir.
2009). Additional guidance, considered neither binding nor dispositive, may be found among the
Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System
(“HCDCS”) maintained by the World Customs Organization, which are considered “generally
indicative of the proper interpretation of the [Harmonized Tariff System]”. Lynteq, Inc. v. United
States, 976 F.2d 693, 699 (Fed. Cir. 1992) (quoting H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess.
549 (1988)), reprinted in 1988 U.S.C.C.A.N. 1547, 1582. See also T.D. 89-80, 54 Fed. Reg. 35127,
3
See Libas, Ltd. v. United States, 193 F.3d 1361, 1364 (Fed. Cir. 1999).
4
GRI 1, HTSUS; see also Bauerhin Technologies Ltd. Partnership v. United States, 110
F.3d 774, 777 (Fed. Cir. 1997) (“we begin our inquiry by examining the descriptions of the relevant
headings, subheadings, and accompanying notes”); Orlando Food Corp. v. United States, 140 F.3d
1437, 1440 (Fed. Cir. 1998); Libas, Ltd. v. United States, 193 F.3d 1361, 1364 (Fed. Cir. 1999)
(noting that the chapter and section notes of the HTSUS are statutory law, not optional interpretive
rules).
Court No. 05-00474 Page 4
35128 (Aug. 23, 1989) (ENs “are generally indicative of the proper interpretation of these
headings”).
In its analysis, the court also accords a measure of deference to Customs classification
rulings in proportion to their “power to persuade”. United States v. Mead Corp., 533 U.S. 218, 235
(2001), citing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).5 In the final analysis, however,
the court also has “an independent responsibility to decide the legal issue of the proper meaning and
scope of HTSUS terms.” Warner-Lambert Co. v. United States, 407 F.3d 1207, 1209 (Fed. Cir.
2005), citing Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1358 (Fed. Cir. 2001). See
Jarvis Clark Co. v. United States, 733 F.2d 873, 878 (Fed. Cir. 1984).
II. Undisputed Facts
Among the parties’ papers, the following are averred as material facts not in dispute.
The power supply unit controls the flow of electricity into the iGen3 from external power sources
and also regulates the voltage within the interior of the iGen3. See Joint Statement of Material Facts
Not In Dispute (“JSMF”)6 ¶¶ 3 & 4. In its condition as imported, the power supply is in the form
5
“The weight [accorded to an administrative] judgment in a particular case will depend upon
the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier
and later pronouncements, and all those factors which give it power to persuade, if lacking power
to control.” Skidmore, 323 U.S. at 140.
6
All citations in the JSMF to support the parties’ joint averments are omitted herein. To the
extent a certain level of technical detail may be deemed relevant, the parties agree on the following:
that the power supply unit (“Part No. 105K26780”) regulates the AC voltage of the dicorotron wire
“over a range of 3920 to 6860 V rms, with voltage tolerances within +/- 3.5% of the set point over
the output voltage range”, JSMF, ¶¶ 1, 9; that the AC voltage corresponds to an input voltage range
of 0.4 to 4.6 VDC and an expected AC output current in a rms range of 0 to 30 mA, see id. ¶ 10; that
the power supply unit regulates the DC current of the dicorotron shield over a range of -50 to -200
μA, with current tolerances within +/- 5% of the set point; id. ¶ 11; that the DC current corresponds
(continued...)
Court No. 05-00474 Page 5
of a board-level assembly, with a 12 pin input power connector, a 50 pin signal connector, a high
voltage output connector, and a high voltage return connector, all fastened to a steel mounting plate
that allows it to be mounted in the iGen3. See id. ¶¶ 5 &6.
The iGen3 itself is a high-speed digital multifunction color laser printer designed and
used for both high-volume and “short run, on demand” printing of documents. It is a customizable,
modular design capable of multiple front-end paper feeder units and back-end finishing units (e.g.,
collating, stapling) configured to the main “image output terminal” (“IOT”) in which the
merchandise at bar is incorporated. The basic configuration of the iGen3 includes a feeder, stacker,
and a “digital front end” (“DFE”) print server, also called a controller.7 Feeders, stackers and DFEs
are imported separately from the iGen3 and are not at issue in this action. Id. ¶ 30.
Both the “90” and the “110” models measure six feet in width and eight feet in height
at the (highest) point of the IOT, but at 23 feet eight inches in length the110 model exceeds the 90
model by three feet. See id. ¶¶ 19-20. The iGen3 90 weighs 7,071 lbs and has a base price of
$405,000; the iGen3 110 weighs 7,892 lbs and has a base price up to $610,000. The iGen3 prints
6
(...continued)
to an input voltage range of 1.5 to 4.6 VDC and an expected output voltage range of -3600 to -2000
VDC, id. ¶¶ 12-13; and that the power supply unit is also designed to discharge power rapidly when
the iGen3 is turned off and also via an output control that is designed to shut the power down and
turn off the iGen3 if threshold levels for a number of electrical control parameters are exceeded, id.
¶¶ 7-8 .
7
The parties agree that these DFEs are compatible with the iGen3: DocuSP Controller, Creo
Spire Color Server, and EFI Fiery Color Server. JSMF ¶ 31. The plaintiff explains that these servers
are basic computer systems constructed on either a Sun Fire or Intel and Microsoft PC platform; can
process digital images using a wide range of print languages, including but not limited to Adobe
Postscript, public document format (PDF), and tagged image file format (TIFF); and can
communicate with computer networks using Ethernet or TCP/IP network languages with network
protocols including IPX/SPX, TCP/IP, HTTP, IPP and AppleTalk. Pl’s Br. at 3.
Court No. 05-00474 Page 6
at a rated speed of either 90 or 110 letter-sized (A4) color sheets per minute8 (up to 6,600 per hour)
at a resolution of 600 by 4800 dots per inch using a line screen of up to 200 lines per inch with 256
gray levels. It can accommodate sheet sizes up to 14.33" by 20.5" and paper weights from 16-lb
bound up to 130-lb cover, coated or uncoated media, with a standard holding capacity of 30,000
sheets. Pl’s Br. on Mot. for J. (“Pl’s Br.”) at 2-3; JSMF ¶¶ 22-27. The iGen3 can print on specialty
stocks and labels in sheets as large as 14.33" x 22.5" (364 x 572 mm), and measures the color
between every impression for consistency from sheet to sheet. JSMF ¶ 28.
The iGen3 does not feature a scanner, is not used for digital copying, and does not
have a facsimile function. Pl’s Br. at 3.
Image printing on an iGen3 first requires receipt of a digital file at the particular DFE
(controller) that has been made part of the iGen3 configuration. Cf. JSMF ¶ 32 (“[o]nce a digital file
has been created on an originating computer or work station, the file is then transmitted to the
DFE”). Once received, the DFE then “rasterizes” the digital file, converting it into a bitmap (pixels
or dots), and once the rasterization process is complete, the file is then transmitted to the iGen3 for
production. Id. ¶¶ 33-34. The DFE also performs additional color management functions in the
process. Pl’s Br. at 3.
To produce images, the iGen3 operates by the “xerography” process. JSMF ¶ 35.
The digital file, now in the form of a bitmap, instructs the laser in the iGen3 to turn on and turn off,
discharging specific points on a photoreceptor belt in the shape of a dot or pixel, which discharge
will eventually attract toner to the dot. See id. The power supplies in the iGen3 charge the toner to
8
Hence, the model number designations of iGen3 90 and iGen3 110.
Court No. 05-00474 Page 7
an opposite potential to the discharged dot area on the photoreceptor, which causes the toner to
basically jump from one area onto the photoreceptor belt. Id. ¶ 36. The toner particle is transferred
from the photoreceptor to the printer by putting a charge behind the paper, opposite to the charge of
the toner on the photoreceptor, which causes the toner to be pulled away from the belt and become
stuck to the paper. Id. ¶ 37. The paper is then run through a fusing operation, in which heat and
pressure melts the toner to the paper and prevents it from falling off. Id. ¶ 38.
The defendant emphasizes the plaintiff’s marketing and selling of the iGen3 as a
“digital production press.”9 Customers who have purchased the iGen3 include “graphic
communication companies, printers, and print-for-pay” companies. Id. ¶ 41. “The ‘non-commercial’
printers that have purchased the iGen3 included ‘[c]’ompanies like Target, Walmart, United
Airlines, universities, [and] ‘vertical markets’” (sic erat scriptum; italics added). Id. ¶ 42. For
example, a “Lands End” catalog can be printed on an iGen3. See id. ¶ 43. The iGen3 is an
“imaging system” that provides “new services,” including “high quality color at a cost that makes
9
According to the “Specifications” section of a document entitled “Press Forward”, see Ex.
A to Pl’s Br. (iGen3 Brochure), the iGen3 has the following “Technology Features”:
SmartPress Imaging
Third generation technology; single-point transfer printing; closed-
loop controls; benchmark gamut of CMYK dry inks; replace dry inks
while running.
SmartPress Paper Handling
Mixed stocks in a single run; dual-edge registration; straight paper
path; wide-radius inverter for second-side imaging; collated sets;
wheeled stacker cart.
SmartPress Sentry
Built-in intelligence; automatically adjust to paper characteristics;
monitors every print; provides on-line diagnostics and remote
support.
JSMF ¶ 40.
Court No. 05-00474 Page 8
sense even for short runs, print jobs -- from books to brochures and from statements to sell sheets”.
Id. ¶ 44. The iGen3 offers “versatile, high quality print” that rivals offset printing. Id. ¶ 45. The
iGen3 reduces operating costs by, among other things, eliminating warehousing costs and inventory
disposal rates. Id. ¶ 46. The benefits of the iGen3 are that it produces “offset-like quality on a
digital platform,” variable and customized content, and “commercial level quality” impressions.
Id. ¶ 47. The iGen3 increases the “return on investment” by increasing the effectiveness and
response to printed communications. Id. ¶ 48. The iGen3’s “Key Applications” include short run,
on demand “printing of brochures, books, flyers, postcards, newsletters, catalogues, manuals, Point
of Purchase materials, sell sheets and more!” Id. ¶ 50. And, the iGen3’s output has the “look and
feel of offset printing.” Id. ¶ 51. Customers that purchase the iGen3 must attend a mandatory
three-week training program. Id. ¶ 49.
Subsequent to the parties’ submission of their JSMF, the plaintiff also submitted
averments claimed as material, but which the defendant disputes. Specifically, the plaintiff further
averred that the iGen3 only handles digital files that are created on computers or units of computer
systems, which the defendant denied on the ground that the terms “handles” and “units of a computer
system” are vague. The defendant, in turn, averred that the iGen3 has the ability to produce
impressions from digital files that are created on a personal computer or work station and transmitted
to the DFE in the proper format and also that the iGen3 also has the ability to produce impressions
from digital files that are created by a digital scanner and transmitted to the DFE in the proper
format. Cf. Pl’s Supplemental Statement of Material Facts Not in Dispute (“Pl’s Supp. MF”) ¶ 52,
with Def’s Response thereto (“ Def’s Supp. MF Resp.”) ¶ 52 (citations omitted).
Court No. 05-00474 Page 9
The plaintiff also averred that the iGen3 is solely used with an automatic data
processing machine, and is connected to the central processing unit through a network, including the
DFE server, and that the iGen3 can exchange data with the central processing unit, which the
defendant denied on the ground that this purported fact is unintelligible and that the cited testimony
is unclear as to whether the iGen3 is connected to the central processing unit (“CPU”) of the DFE
or some other computer or workstation. Specifically, the defendant pointed out that in his deposition
Mr. Maszerowski testified that a CPU is a “freely programmable computer”, and the defendant
claimed Mr. Maszerowski is incorrect, as a CPU is a “[t]he part of a computer in which operations
are controlled and executed.” Cf. Pl’s Supp. MF ¶ 53, with Def’s Supp. MF Resp. ¶ 53 n.1, citing
Ex. I of Pl’s Supp. MF ¶ 53 and the Oxford Dictionaries’ online definition of “central processing
unit”. The defendant also averred that the cited testimony indicates that “information” comes “back”
from the server and that scanned images can be received from the server but does not indicate that
the information or scanned images are sent from the iGen3 to the server. Id. The defendant further
averred that the iGen3 is connected to and works in conjunction with the DFE. Id.
Lastly, the plaintiff also averred that the iGen3 connects to standard automatic data
processing machines and networks using Ethernet, TC/PIP, Apple Talk, and prints files from any
type of computer that is capable of connecting to a network, which the defendant denied on the
ground that the phrase “standard automatic data processing machine” is vague. The defendant
averred in response that the iGen3 cannot print “files from any type of computer that’s capable of
connecting to a network”; that the iGen3 connects directly to the DFE; that the iGen3 can only
process files that have been converted into a bitmap by the DFE; and that each DFE supports a set
Court No. 05-00474 Page 10
of specific file formats.10 Pl’s Supp. MF ¶ 54; Def’s Supp. MF Resp. ¶54, referencing Ex. I of Pl’s
Supp. MF.
While helpful to a fuller understanding of the issues, the disputed averments are
immaterial to resolution of this case, given sufficient overlap of agreement on the “nature” of the
iGen3 Digital Production Press into which the imported merchandise would be incorporated, which
has reduced argument over the meaning of the competing tariff provisions to the point where
summary judgment is appropriate as contemplated in USCIT Rule 56 and by Celotex Corp. v.
Catrett, 477 U.S. 317 (1986) and Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). See, e.g.,
Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed. Cir. 2006) (“[w]hen the nature of the
merchandise is undisputed . . . the classification issue collapses entirely into a question of law”);
Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365-66 (Fed. Cir. 1998) and cases cited.
III. Relevant Statutory Provisions
The following provisions of the HTSUS, year 2004 version, are relevant to this
dispute, in particular the classification of the iGen 3:
10
Specifically: that the Xerox FreeFlow Print Server supports Adobe® PostScript® Level
1, 2, 3; Adobe® Acrobat® 7.0, PDF 1.6, PDF/X; TIFF, PCL5c, and PCL6XL; that the Xerox
FreeFlow Print Server can also use data streams from AFP/IPDS, LCDS, or a VIPP or VI workflows;
that the Creo Spire Color Server supports Postscript level 1, 2, 3, PDF/Acrobat, EPS, EPSF, DCS,
DCSF, Print-ready RTP jobs, Creo VPS, and Xerox VIPP; that the EFI Fiery Color Server supports
Postscript level 1, 2, 3, PDF 1.5/Acrobat 6, PDF/X-1a and 3, EPS, DCS 2.0, TIFF and TIFF/IT, and
JPEG. Pl’s Supp. MF ¶ 54; Def’s Supp. MF Resp. ¶54, referencing Ex. I of Pl’s Supp. MF. The
defendant additionally averred that each DFE can only receive files from “client environments”
(originating computers or workstations) that run specific operating systems; that the Xerox FreeFlow
Server and Creo Spire Color Server can only receive files running from originating computers or
workstations that run Windows 98/ME/NT 4.0/2000/XP, Macintosh OS 8.0 and higher, and OS X
native; and that the EFI Fiery Color Server can only receive files from originating computers or
workstations that run Windows 98/MT/XP/NT 4.x/2000, Macintosh OS 9.6 or higher, OSX v10.2.4,
and UNIX with TCP/IP. Def’s Supp. MF Resp. ¶54.
Court No. 05-00474 Page 11
CHAPTER 84 -- NUCLEAR REACTORS, BOILERS, MACHINERY AND
MECHANICAL APPLIANCES; PARTS THEREOF
Notes
5. (A) For purposes of heading 8471, the expression “automatic data processing
machines” means:
(a) Digital machines, capable of (1) storing the processing program or
programs and at least the data immediately necessary for execution of
the program; (2) being freely programmed in accordance with the
requirements of the user; (3) performing arithmetical computations
specified by the user; and, (4) executing, without human intervention, a
processing program which requires them to modify their execution, by
logical decision during the processing run;
* * *
(B) Automatic data processing machines may be in the form of systems
consisting of a variable number of separate units. Subject to paragraph (E)
below, a unit is to be regarded as being a part of a complete system if it meets
all the following conditions:
(a) It is of a kind solely or principally used in an automatic data processing
system;
(b) It is connectable to the central processing unit either directly or through
one or more other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can
be used by the system;
* * *
(D) Printers, keyboards, X-Y coordinate input devices and disk storage units
which satisfy the conditions of paragraphs (B)(b) and (B)(c) above, are in all
cases to be classified as units of heading 8471.
(E) Machines performing a specific function other than data processing and
incorporating or working in conjunction with an automatic data processing
machine are to be classified in the headings appropriate to their respective
functions or, failing that, in residual headings.
* * *
Heading/Subheading
8443 Printing machinery used for printing by means of printing type, blocks,
Court No. 05-00474 Page 12
plates, cylinders and other printing components of heading 8442;[11] ink-jet
printing machines, other than those of heading 8471; machines for uses
ancillary to printing; parts thereof:
Offset printing machinery:
8443.11 Reel-fed:
8443.11.10 00 Double-width newspaper printing presses . . . . . . 3.3%
8443.11.50 00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8443.12.00 00 Sheet-fed, office type (sheet size not exceeding
22 x 36 cm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8443.19 Other:
8443.19.10 00 Weighing 900 kg or less . . . . . . . . . . . . . . . . . . . . . . . Free
8443.19.50 00 Weighing more than 900 kg but less than
1,600 kg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
Weighing 1,600 kg or more . . . . . . . . . . . . . . . . . Free
8443.19.90 00 Letterpress printing machinery, excluding flexographic
printing:
8443.21.00 00 Reel-fed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2%
8443.29.00 00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8443.30.00 00 Flexographic printing machinery . . . . . . . . . . . . . . . . . . . . 2.2%
8443.40.00 00 Gravure printing machinery . . . . . . . . . . . . . . . . . . . . . . . . 2.2%
Other printing machinery:
8443.51 Ink-jet printing machinery:
8443.51.10 00 Textile printing machinery . . . . . . . . . . . . . . . . . 2.6%
8443.51.50 00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8443.59 Other:
8443.59.10 00 Textile printing machinery . . . . . . . . . . . . . . . . . 2.6%
8443.59.90 00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
* * *
8471 Automatic data processing machines and units thereof; magnetic or optical
readers, machines for transcribing data onto data media in coded form and
machines for processing such data, not elsewhere specified or included:
* * *
11
Heading 8442 covers “Machinery, apparatus and equipment (other than the machine tools
of headings 8456 to 8465), for type-founding or typesetting, for preparing or making printing blocks,
plates, cylinders or other printing components; printing type, blocks, plates, cylinders and other
printing components; blocks, plates, cylinders and lithographic stones, prepared for printing purposes
(for example, planed, grained or polished); parts thereof”.
Court No. 05-00474 Page 13
8471.60 Input or output units, whether or not containing
storage units in the same housing:
Other:
* * *
Printer units:
Assembled units incorporating at least the
media transport, control and print mechanisms:
8471.60.51 00 Laser:
Capable of producing more than
20 pages per minute . . . . . . . . . . . . . . . . . . Free
8471.60.52 00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.53 00 Light bar electronic type . . . . . . . . . . . . . . . . . Free
8471.60.54 00 Ink jet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.55 00 Thermal transfer . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.56 00 Ionographic . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.57 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
30 Daisy wheel . . . . . . . . . . . . . . . . . . . . . . . . . .
60 Dot matrix . . . . . . . . . . . . . . . . . . . . . . . . . . .
90 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other:
8471.60.61 00 Laser:
Capable of producing more than
20 pages per minute . . . . . . . . . . . . . . . . . . Free
8471.60.62 00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.63 00 Light bar electronic type . . . . . . . . . . . . . . . . . Free
8471.60.64 00 Ink jet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.65 00 Thermal transfer . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.66 00 Ionographic . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
8471.60.67 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free
30 Daisy wheel . . . . . . . . . . . . . . . . . . . . . .
60 Dot matrix . . . . . . . . . . . . . . . . . . . . . . .
90 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . .
* * *
8472 Other office machines (for example, hectograph or stencil duplicating
machines, addressing machines, automatic banknote dispensers, coin-sorting
machines, coin-counting or wrapping machines, pencil-sharpening machines,
perforating or stapling machines):
8472.10.00 00 Duplicating machines . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6%
Court No. 05-00474 Page 14
8472.20.00 00 Addressing machines and address plate embossing
machines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1%
8472.30.00 00 Machines for sorting or folding mail or for inserting
mail in envelopes or bands, machines for opening,
closing or sealing mail and machines for affixing
or canceling postage stamps . . . . . . . . . . . . . . . . . 1.8%
8472.90 Other:
8472.90.10 00 Automatic teller machines . . . . . . . . . . . . . . . . . . . Free
8472.90.40 00 Pencil sharpeners . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6%
8472.90.60 00 Numbering, dating and check-writing machines . . Free
8472.90.70 00 Accessory and auxiliary machines which are
intended for attachment to an electrostatic
photocopier and which do not operate
independently of such photocopier . . . . . . . . . . . . Free
8472.90.80 00 Printing machines other than those of
heading 8443 or 8471 . . . . . . . . . . . . . . . . . . . . . . Free
8472.90.90 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8%
40 Desktop note counters and note scanners . . . .
60 Other currency and coin handling machines . . .
80 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV. Analysis
The central issue here is whether the iGen3 is itself classifiable as a unit of an ADP
system, as contended by the plaintiff, or whether it is excluded from that designation on the ground
that, working in conjunction with an automatic data processing machine, the iGen3 is a machine
performing a “specific function other than data processing” within the meaning of Note 5(E) of Note
5 to chapter 84 (italics added) as contended by the defendant.
The defendant’s position here, that the iGen 3 is not a “unit” of an ADP machine of
heading 8471, is consistent with its prior administrative rulings on the classification of the iGen3
itself and similar merchandise. In Headquarters (“HQ”) Ruling 967514 (June 6, 2005), which
reconsidered New York (“NY”) Ruling I81178 (May 20, 2002), Customs classified the iGen3 in
Court No. 05-00474 Page 15
subheading 8472.90.80. See also HQ 965051 (May 1, 2002), discussed infra. In HQ 967514,
Customs concluded that because the iGen3 “has the characteristics of a digital production press for
the printing industry” and performs “short run, on demand” printing,12 Note 5(E) of chapter 84
applies because short run, on demand is not a data processing function based on the analyses of
previous ruling letters. Customs thus considered the iGen3 “precluded” from classification in
heading 8471 and correctly classifiable in heading 8472.90.80, with the power supply unit in
subheading 8504.90.95. See HQ 967514.
Following that ruling, upon actual importation of the power supply units at bar,
Customs adhered to HQ 967514 and classified them as “other” static converters under subheading
8504.40.95. The plaintiff filed its protest thereof on May 5, 2005, which Customs denied on the
authority of HQ 967514 and NY I81178, i.e., that the iGen3 is classifiable as an “other” office
machine under heading 8472, and thus the power supply “to be incorporated into this unit” was not
classified as part of unit of an automatic data processing (“ADP”) machine.
The genesis of HQ 967514 appears to have been HQ 959651 (July 9, 1997),13 in
which Customs considered whether the “AGFA Chromapress digital color printing system” is
classifiable as an ADP machine or as printing machinery. The applicant argued that the
Chromapress is an ADP printer in accordance with Notes 5(B) and 5(D) to chapter 84. Customs,
12
Customs defined short run, on demand printing therein as “the ability to economically
print 1000 or less documents, for a customer order, with the unique capabilities of a digital press,
including speed, volume output, use of a wide variety of stocks, and mixed stocks in a single run,
and automatic collation.” HQ 967514.
13
See also HQ 957981 (July 9, 1997) (classification of “Xeikon DCP-1 digital color
printer”).
Court No. 05-00474 Page 16
however, concluded that it “is more than just an ADP printer, it is an entire printing system [that]
acts as a functional unit designed to replace off-set printing presses”, and that Note 5(E) to chapter
84 clearly states that machines performing a specific function are to be classified in the heading
appropriate to their respective functions, which is a “separate prerequisite” that must be met in order
to classify a machine as a unit of an ADP machine. See HQ 959651 at 3, quoting HQ 957491 (July
31, 1996).
In that decision, Customs reinforced its conclusion by reference to the ENs to chapter
84.14 Id. at 3-4. After reviewing sales literature for the Chromapress that claimed efficiencies in
“short-run color printing” as well as the 1993 New York Times article “Gutenberg Goes Digital” and
a 1995 “Print on Demand Business” article, Customs concluded that the Chromapress is a
14
At the time (and unchanged to the present), EN 84.71 provided, in relevant part, on the
interpretation of “machines incorporating or working in conjunction with an [ADP] machine and
performing a specific function”, as follows:
In accordance with the provisions of the last paragraph of Note 5 to Chapter 84, the
following classification principles should be applied . . . :
(i) A machine incorporating an automatic data processing machine
and performing a specific function other than data processing is
classifiable in the heading corresponding to the function of that
machine or, in the absence of a specific heading, in a residual
heading, and not in heading 84.71.
(ii) Machines presented with an automatic data processing machine
and intended to work in conjunction therewith to perform a specific
function other than data processing, are to be classified as follows:
the automatic data processing machine must be classified separately
in heading 84.71 and the other machines in the heading corresponding
to the function which they perform unless, by application of Note 4
to Section XVI or Note 3 to Chapter 90, the whole is classified in
another heading of Chapter 84, Chapter 85 or of Chapter 90.
HCDCS, EN 84.71(E) (italics added).
Court No. 05-00474 Page 17
“functional” unit by reason of Note 4 to Section XVI15 and Note 5(E) to chapter 84 and is therefore
classifiable, according to its function, in heading 8443 as “printing” machinery. Id. at 4-5. Customs
dismissed the argument that EN 84.43 for heading 8443 limits printing machinery to those types of
machines that print by means of type, printing blocks, plates, or cylinders of heading 8442, on the
ground that nothing in the legal text of heading 8443 provides for no such limitations, and “[i]t must
also be remembered that the tariff statutes were enacted ‘not only for the present but also for the
future, thereby embracing articles produced by technologies which may not have been employed or
known to commerce at the time of the enactment.’” Id. at 6, quoting NEC America, Inc. v. United
States, 8 CIT 184, 186, 596 F. Supp. 466, 468 (1984), quoting Corporacion Sublistatica, S.A. v.
United States, 1 CIT 120, 126, 511 F. Supp. 805, 809 (1981).
Subsequently, in HQ 965051 (May 1, 2002), Customs addressed the classification of
the “Heidelberg Digimaster 9110”, a high speed, high volume printer, or “digital imaging system,”
with an output rate of 110 pages per minute and designed for the 300,000 to 800,000 copies per
month market.16 Relying on HQ 959651 and HQ 957981, supra, Customs similarly held that the fact
that the Digimaster 9110 “is used primarily as a short-run digital printer rather than as a standard
digital copy machine . . . [is] a function other than data processing, and the Digimaster 9110 is thus
15
Note 4 to Section XVI provides: “Where a machine (including a combination of machines)
consists of individual components (whether separate or interconnected by piping, by transmission
devices, by electric cables or by other devices) intended to contribute together to a clearly defined
function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be
classified in the heading appropriate to that function.” Note 4 to Section XVI.
16
The Digimaster 9110 allows the printing of documents from stored files, scanned
documents (after installation of the optional scanner) and/or data print streams, and is designed for
short run, on demand printing as well as desktop publishing and printing manuals, booklets and
graphics. HQ 965051 at 1.
Court No. 05-00474 Page 18
precluded from classification under heading 8471”. HQ 96501 at 2. In so ruling, Customs
distinguished various New York ruling letters to which the Digimaster 9110 applicant pointed, which
had classified “a variety of multi-function fax/copier/printers as units of ADP machines”, on the
ground that they were dependant upon Customs’ application of GRI 3(b) to determine the essential
character of machines that could send and receive facsimiles, digitally reproduce documents scanned
into memory, and print ADP output:
These machines, however, are distinguishable from the Digimaster 9110, in that they
functioned as stand-alone copiers with the additional abilities to fax and function as
ADP printers, while the Digimaster 9110 is imported without the digital scanner . . . .
Id. (italics added).
There are several observations to be made at this point. First, in Digidesign, Inc. v.
United States, 39 CIT ___, 44 F. Supp. 3d 1366 (2015), Customs defended its classification of
imported “control surfaces” consisting of switches, faders, and knobs on consoles that allowed a user
to edit, mix, and manipulate music in digital file format fed to music editing software on a connected
computer. The court accepted Customs’ argument that Note 5(E) excluded the merchandise from
classification as ADP units on the basis of the “working in conjunction with” language of Note 5(E),
due to the fact that the control surfaces were capable of stand-alone functionality in analog
modalities that did not involve data processing.17 Notable here is that Customs’ position in
17
Digidesign relied on BenQ to interpret Note 5(E). See BenQ America Corp. v. United
States, 646 F.3d 1371 (Fed. Cir. 2011). BenQ concerned the classification of monitors equipped
with connectors for receiving data from a personal computer, digital camera, VCR, DVD player and
other devices. Although the Federal Circuit did not interpret Note 5(E) in a stare decisis sense, it
observed that Note 5(E) “is limited to” machines performing a specific function other than data
processing and incorporating or working in conjunction with an automatic data processing machine,
and deduced that “when ‘performing a specific function other than data processing,’ such as when
(continued...)
Court No. 05-00474 Page 19
Digidesign stands in contrast to its rationale in HQ 96501, as indicated by the quoted passage above.
Second, it is of some significance to the matter at bar that in contrast to HQ 959651,
supra, but similar to the recent classification of the iGen3 in HQ 967514, Customs in HQ 965051
found the Digimaster properly classifiable as an “office machine not more specially provided for”
under subheading 8472.90.80 (i.e., “printing machines other than those of heading 8443 or 8471”).
The reason provided for not classifying the merchandise, consistent with HQ 959651, in heading
8443 -- which, as mentioned, specifically covers “printing machinery” -- was that, effective January
1, 2002, the article description of heading 8443 was modified and, according to Customs at the time,
that heading “is now reserved for printing machines that operate by means of printing type blocks,
plates, cylinders and other printing components of heading 8442, HTSUS, or ink-jet printing
machines, other than those of heading 8471”. HQ 965051 at 3. Nonetheless, it is fairly clear from
that ruling, although it is unstated, that Customs continued -- and continues -- to regard printers such
as the Digimaster to be the functional equivalent of a large-scale commercial printing industry
printer, such as an offset printing press, but due to the statutory change in the language of heading
8443 and its interpretation thereof, Customs settled for classification in heading 8472 (“other office
machines”, specifically subheading 8472.90.80, which covers “Other: . . . Printing machines other
than those of heading 8443 or 8471”).
17
(...continued)
the monitors are serving as video monitors for other devices such as DVD players and VCRs, the
monitors are ‘working in conjunction’ with those other devices, not with an automatic data
processing machine.” 646 F.3d at 1379 (footnote omitted).
Court No. 05-00474 Page 20
Third, the year 2002 version (3d ed.) of EN 84.72 further describes each of these18
types of office machines, but it provides no further indication of what a printing machine “other than
those of heading 8443 or 8471” would constitute in the “other office machine” context -- only that
the term “office machines” is to be taken in a wide general sense to include all machines used in
offices, shops, factories, workshops, schools, railway stations, hotels, etc., for doing “office work”
(i.e., work concerning the writing, recording, sorting, filing, etc., of correspondence, documents,
forms, records, accounts, etc.) -- and this explanation has essentially been repeated up through the
current (2012; 5th ed.) version of EN 84.72.
C
The parties have agreed that the iGen3 satisfies the requirements of Note 5(B)(b) and
5(B)(c), in that the iGen3 is connected by cables directly to a dedicated DFE print controller, which
is connected to computer or workstation, and can only perform print operations upon receipt of
digital files or commands. The plaintiff also contends, and the defendant does not appear to dispute,
that Note 5(D) excuses printers, inter alia, from satisfying the conditions of Note 5(B)(a). The
plaintiff thus contends Note 5(E) is inapplicable because the iGen3 only performs the data processing
18
As indicated above, heading 8472 covers “Other office machines (for example, hectograph
or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting
machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling
machines)”, and the specific subheadings of “printing machinery” of heading 8472 in addition to
printing machines other than those of 8471 are for duplicating machines, addressing machines and
address plate embossing machines, machines for sorting or folding mail or for inserting mail in
enveloped or bands, machines for opening, closing or sealing mail, and machines for affixing or
cancelling postage stamps, automatic teller machines, pencil sharpeners, numbering, dating and
check writing machines, accessory and auxiliary machines which are intended for attachment to an
electrostatic photocopier and which do not operate independently of such photocopier, desktop note
counters and note scanners, and other currency and coin handling machines, and “other” office
machines.
Court No. 05-00474 Page 21
function of “digital printing” and “would not function without the transmission of data from the ADP
machine or system”. Pl’s Br. at 24. It argues that there is no “line” “beyond which a printing
apparatus becomes so big and technologically advanced that it is no longer a printer, [n]or so small
and mechanically simple that it is no longer a press.” Pl’s Br. at 22.
To the extent the plaintiff argues that “every printing apparatus that prints data
transmitted from an ADP is a unit of an ADP machine of heading 8471”, the defendant responds that
“simply cannot be the case” because printers of Note 5(D) are subject to Note 5(E) by virtue of Note
5(B), and because headings 8443, 8472, and 8479 can all cover, among other things, printing
apparatus that connect to ADP machines and print the output of ADP machines. Def’s Resp. and
Cross Mot. at 14-15, referencing subheadings 8443.51.10, 8443.51.50), 8472.90.80, and 8479.89.96.
Emphasizing the plaintiff’s marketing of the iGen3 as a “digital production press,”19 the defendant’s
19
I.e., as an “imaging system” that provides “new services,” including “high quality color
at a cost that makes sense even for short runs, print jobs-- from books to brochures and from
statements to sell sheets.” Ex. A to Pl’s Br., “Press Forward” (iGen3 Brochure) at 2. The marketing
materials also emphasize the iGen3’s ability to quickly and economically produce complex materials
in varying quantities (i.e., the iGen3 is “the first digital production press that’s totally at home in an
inplant print shop or a commercial print environment”, offering “the flexibility, quick turn-around
times, and economics that characterize digital printing while producing output with the look and feel
of offset printing”; with the ability “to print exact quantities instead of thousands extra in an effort
to bring down the per unit cost as in the offset world” the iGen3 “is the complement to your offset
environment[,] . . . providing offset quality and a digital workflow, offering the best of both worlds”,
and “eliminat[ing] the manual preparation for offset, which makes color economical only as the
quantities reach very high levels”). See id. at 4, 8. The defendant also emphasizes the marketing of
the iGen3’s ability to produce high quality color materials (“iGen3’s SmartPress Technology™
adjusts ink and imaging for each sheet that passes through the Press . . . . The Press runs a wide array
of stocks. . . . The Press measures the color between every single impression, for consistency from
sheet to sheet and shift to shift”). See id. at 3. Summarizing, the defendant argues that “the theme
that runs through [plaintiff]’s marketing materials is that the iGen3 is a ‘digital press’ that has the
technical capabilities to produce materials that have the appearance of materials printed on an offset
printing press and that the iGen3’s primary purpose is to increase a company’s business by offering
(continued...)
Court No. 05-00474 Page 22
essential contention is that the iGen3 performs a “specific function” other than ADP in the form of
short run, on demand printing, that “printing is not inherently a data processing function,” and that
while printing may use a new method, e.g., digital technology, “the end result is still printing, i.e.,
the reproduction of text and illustrations onto paper.” Def’s Resp. and Cross Mot. at 14 n.9; see also
Def’s Reply at 8-9.
To the extent that is true, it lays bare the inherent contradiction between Note 5(D)
and Note 5(E) to chapter 84. Whether referring to the encasement of a printer or the specific “case”
of a classification situation,20 the meaning of “in all cases” in Note 5(D) would seem to be clear.
And yet, Note 5(D) is still “subject to” the “specific function” exclusion of Note 5(E). Thus, is there
an identifiable point in the HTSUS at which a digital printer becomes a printer that performs a
specific function “other than” data processing? If so, it is certainly vague, because the function of
all digital printers, apparently,21 is to print digital output and/or process digital data to some degree.
Therefore, in order to resolve the contentions here, the meaning of a “specific function” of Note 5(E)
must at a minimum be interpreted in the sense of “as distinct from” data processing.
19
(...continued)
new services and by increasing the effectiveness of its marketing opportunities.” Def’s Resp. and
Cross Mot. at 17, referencing Ex. B to Pl’s Br. (FreeFlow® Print Server Specifications).
20
But cf. subheading 8471.60 (describing “[i]nput or output units, whether or not containing
storage units in the same housing”) (italics added).
21
Cf. Pl’s Reply at 3 n.2 (“[a] smaller printer will also contain a DFE controller to handle
communications with the computer network, but this will be a small, board-level unit contained in
the printer housing itself”) with Transcript of Oral Argument at 17:10-17:24 (“[T]he digital front end
. . . is sort of an adapted computer, and the mainframe will send data to the adapted computer . . . A
digital stream will come to the front end, to the printer, and . . . [i]t will convert it, it will adjust it,
or it will route it to the proper software, it will use the software, and it will print your product[.]”),
34:15 (“[all printers have a digital front end, even little, tiny black-and-white printers”).
Court No. 05-00474 Page 23
The Explanatory Notes define “data processing” as that which “consists in handling
information of all kinds, in pre-established logical sequences and for a specific purpose or purposes.”
EN 84.71(I), at 1575; Optrex Am., Inc. v. United States, 30 CIT 192, 214 (2006). Of note here is the
fact that the HTSUS drafters did not consider printing per se to be a Note 5(E) exception to Note
5(D), insofar as they provided for various “printer units” of ADP machines that are clearly and
specifically provided for in heading 8471. Cf. Note 5(D) to ch. 84 with subheading Note 1 to ch. 84
(“[f]or the purposes of subheading 8471.49, the term ‘systems’ means automatic data processing
machines whose units satisfy the conditions laid down in note 5(B) to chapter 84 and which
comprise at least a central processing unit, one input unit (for example, a keyboard or a scanner), and
one output unit (for example, a visual display unit or a printer”) (italics added) & subheadings
8471.60.51.00 through 8471.60.67.90 (input or output units, whether or not containing storage units
in the same housing: laser, light bar electronic type, ink-jet, thermal transfer, ionographic, daisy
wheel, dot matrix, and other). In other words, given the organization of the year 2004 HTSUS, the
inescapable conclusion is that the drafters by or at that time must have concluded that the meaningful
output of data, in a useful or useable form, is a necessary part of the complete ADP process, i.e., not
only the process of rasterizing a digital file but also the printing of the rasterized image onto a
substrate with a substance such as an ink or dye, because machines that print digital output have been
(at least at that time) themselves considered “output units” of ADP machines.22
22
It further goes without saying that the output of an ADP machine must be rendered in a
useful form, whether in a more permanent form or not, in order to be meaningful. “Digital printing”
is thus a function of data processing, as contended by the plaintiff. And all ADP printing, whether
short or long run, is “on demand” and digital, regardless of whether the imaging technology is laser,
thermal, dot matrix, et cetera. Were the defendant’s contention taken to its logical conclusion, of
(continued...)
Court No. 05-00474 Page 24
The defendant’s essential contention is that iGen3 printing is not “mere” printing but
high-end, “special function” printing such as that encompassed by the ink-jet printers discussed in
the 2002 version of EN 84.71 that was in existence at the time of importation:
In accordance with Note 5(D) to this Chapter, printers, keyboards, X-Y coordinate
input devices and disc storage units which satisfy the conditions of items (b) and (c)
above, are in all cases to be classified as constituent units of data processing systems.
The foregoing provision is, however to be considered in the overall context of Note
5 to Chapter 84 and is therefore applicable subject to the provisions of paragraph (E)
of that Note, by virtue of the introductory part of paragraph (B) thereof. Thus, ink-jet
printers working in conjunction with an automatic data processing machine but
having, particularly in terms of their size, technical capabilities and particular
applications, the characteristics of a printing machine designed to perform a specific
function in the printing or graphic industry (production of pre-press colour proofs,
for example) are to be regarded as machines having a specific function classifiable
in heading 84.43.
Def’s Resp. and Cross-Motion Br. at 12 & Def’s Reply at 4, quoting Def’s Cross-Motion Br.
Addendum, EN 84.71 at 1577.23 The defendant argues that the above example demonstrates that
22
(...continued)
“printing” as not inherently being a data processing function, then the drafters would have concluded
that no digital printing is classifiable under heading 8471, which is clearly not the case.
23
Which version of the Explanatory Notes the defendant provides in its Addendum is
unclear, as the 2002 version is not so paginated. Although the 2002 version retains that language,
but without the defendant’s copy’s pagination, the second paragraph of the above quoted passage
was eliminated from EN 84.71in the 2007 version, from which point (to the present) the Explanatory
Notes have provided only an essential restatement of Note 5(E):
If the unit performs a specific function other than data processing, it is to be
classified in the heading appropriate to that function or, failing that, in a residual
heading (see Note 5(E) to this Chapter). If an apparatus . . . is not performing a data
processing function, it is to be classified according to its characteristics by
application of General Interpretive Rule 1, if necessary in combination with General
Interpretive Rule 3 (a).
E.g., EN to 84.71 (2012) at XVI-8471-4. Although the law in effect at the time of Customs’ decision
on the protest applies on review thereof, see, e.g., Morris Costumes, Inc. v. United States, 30 CIT
(continued...)
Court No. 05-00474 Page 25
there is, in fact, a “line” distinguishing a printing apparatus as not classifiable in heading 8471
depending upon a machine’s characteristics in terms of size, technical capabilities, and applications,
and that the plaintiff’s own marketing materials for the iGen3 show that it “has the characteristics
(size, technical capabilities, and applications) of a printing machine designed to complement, or even
rival, the functions of an offset printing press by performing the specific function of economical
[short run, on demand] printing of complex materials in high quality color for the graphic arts and
printing industries.” Def’s Resp. and Cross-Motion Br. at 15.
The defendant’s emphasis on the iGen3 as a “rival” of an offset printer of heading
8443 appears to contradict Customs’ classification of the iGen3 as an “other office machine” of
heading 8472, specifically an “other” printing machine “other than those of heading . . . 8471” of
subheading 8472.90.80, but be that as it may, the plaintiff’s reply is that ADP systems come in all
sizes and complexities, of course, from non-networked desktop personal computers to large-scale
mainframe or distributed capacity networks with hundreds or thousands of users in a single location,
and they are not limited to a “mere” network or desktop printer by statute, i.e., that nothing in the
statute itself suggests that a printer of heading 8471 is constrained by its size or speed, and that the
defendant identifies no “technical capabilities” of the iGen3 that would disqualify it from
classification as an ADP printer or a unit of an ADP machine. The plaintiff points out that whereas
the iGen3 could print 500 insurance policies in a single print run, with different details and data in
each, something no traditional offset printer can do, given sufficient data buffering (which might be
23
(...continued)
1898 (2006), neither Customs’ rulings nor the ENs are binding to or dispositive of the decision to
be made in the here and now.
Court No. 05-00474 Page 26
provided by connection to a DFE) a common desktop printer could do the same thing, albeit much
more slowly. Pl’s Reply at 13.
The court agrees with the plaintiff that the nature, exactly, of “short run, on demand”
printing, which the defendant claims is a specific non-data processing function, is vague, and
therefore problematic. A common work group printer attached to an ADP network is capable of
printing 1000 or fewer (or more) documents for a specific order and might have several paper trays,
holding different print stocks that can be used in a single run, and such a printer is classifiable --
rightly, the plaintiff adds -- as an ADP output unit. E.g., NY J86411 (July 21, 2003). In other words,
short run, on demand printing is exactly what any ADP printer unit attached to an ADP system or
network is capable of doing.
Is there a basis in the HTSUS for distinguishing the quality of the output of a digital
printer in the manner apparently advocated by the defendant for purposes of classification (e.g.,
“look and feel” of offset printing)? Apparently not. The court can agree with the defendant that
printing, qua printing, is not inherently a data processing function, but it is not possible, in the
context of this case, to distinguish the quality of digital print in its own right among the provisions
of the HTSUS that control the outcome here, i.e., as a “special function” of Note 5(E), due to the
manner in which printers in the subheadings of heading 8471, 8443, and 8472 are specified and
arranged in the year 2004 version of the HTSUS. All the relevant provisions appear to implicate
only the machines’ operations, not the quality of what they can produce.
Certainly heading 8443 covers “printing machinery used for printing,” and one might
surmise that offset printers can provide excellent quality, but that part of the heading is only qualified
Court No. 05-00474 Page 27
“by means of printing type, blocks, plates, cylinders and other printing components of heading 8442”
as noted by Customs in HQ 965051. While heading 8443 also24 specifically covers “ink-jet printing
machines other than those of heading 8471” (clearly indicating that not all ink jet printers are
classifiable in heading 8443), the iGen3 (a) is not an ink-jet printer, (b) it is not the functional
equivalent of an ink-jet printer, and, more importantly, (c) it is not a “specific function” printer, as
it is multi-functional. See JSMF ¶ 30.
The meaning of a “specific function” machine of Note 5(E) appears to have been
intended in the sense of a “dedicated” function, as indicated by the type of ink-jet printer (to which
the defendant points) dedicated to “production of pre-press colour proofs” mentioned in EN 84.71
(2002 or earlier).25 The “specific function” distinction is, in any event, vague in the context of this
case, as ink-jet printers are, generally speaking, rather known for their multi-functionality, especially
insofar as their unique technology allows printing of a wide variety of substances, such as edible inks
or even organic tissue, onto a wide variety and size of substrates or surfaces, such as rice paper,
24
Not pertinent here, heading 8443 lastly covers “machines for uses ancillary to printing, and
parts thereof”.
25
An example thereof might be the IRIS series of ink-jet printers, first introduced in the mid-
1980s as a continuous flow ink system specifically designed for interface with digital pre-press
systems. See, e.g., Andren & Associates v. Scitex American Corp., No. 95-C-276, 1996 U.S. Dist.
LEXIS 16954, (N.D. Ill. Nov.8, 1996) (contract dispute over Iris model 4012). Cf. Uwe Stainmueller
and Jürgen Gulbins, The Art of Digital Fine Art Printing (Mar. 2006 ed.), pp. 1-21 (“[t]he IRIS
printer, at an early stage of inkjet history, provided a reasonably high print speed and considerable
resolution and image quality, while print permanence and maintenance were problems”) with Avecia,
Inc. v. United States, 30 CIT 1956, 1359-62 (describing evolution of color ink-jet inks in addressing
such problems).
Court No. 05-00474 Page 28
glass, wood, fabric, or even automobiles.26 Cf., e.g., Kopykake Enterprises, Inc. v. the Lucks
Company, 264 F.3d 1377 (Fed. Cir. 2001); Mead Digital Systems Inc. v. A.B. Dick Co., 723 F.2d
455, 456 (6th Cir. 1983) (“ink jet printing[ ] is now used by businesses which require high speed
printing or printing on soft or other unusual surfaces” and “[i]nk jet printers are particularly
well-suited for computer print-outs and labeling”). Implicitly, by contrast, the digital printers
specified as covered by heading 8471 are not so limited or dedicated, and neither is the iGen3, the
parties having agreed that it is multi-functional.
The defendant, however, makes much of the fact that the plaintiff marketed the iGen3
as a complement to or even a rival of offset printing, or that some use the iGen3 to perform print jobs
that in an earlier age might have been relegated to offset. These points also do not dispose of the
iGen3’s classification, because the iGen3’s functionality is far more flexible than that of a traditional
offset printer. Traditional printers cannot vary the content of the document or image, let alone
perform short run, on demand printing, which, the parties apparently agree, is a function of a digital
process. Performing such a process does not remove the printer from the definition of an ADP unit;
it simply indicates a situation where an operation, formerly performed by a non-ADP device, is now
performed as an ADP function.27
26
A further distinction from ink-jet printers, or rather ink-jet printing technology, is that laser
printers like the iGen3 appear limited at this point in time by size, type and thickness of substrate that
can be accommodated, in contrast to ink-jet printing technology, and at least insofar as the papers
here indicate. See, e.g., Pl’s Br. at 2-3; JSMF ¶¶ 22-28.
27
In this regard, the plaintiff makes a compelling point: “Under the [defendant’s] logic, a
computer keyboard or a printer might be classified as a ‘typewriter’ because they perform writing
functions (keystrokes, placing marks on paper) formerly done by a typewriter. Indeed, when
pounding away on a keyboard, even in 2015, a typical computer user is likely to say that he or she
(continued...)
Court No. 05-00474 Page 29
Unlike headings 8443 and 8472, heading 8471 encompasses a laser printer as a unit
of an ADP machine of heading 8471, as indicated in the subheadings therefor, whereas neither
heading 8443 nor heading 8472 nor the subheadings thereof specify laser printers, only “other”
printers. Unlike heading 8443, which has classification provisions for “other” offset printers based
on weight, nothing in heading 8471 indicates that printers thereof must not exceed a certain size, nor
is there any indication of “special” functionality that would exclude printers that meet the
requirements of Note 5(B) from heading 8471. And unlike headings 8443 and 8471, heading 8472
(in which Customs determined the iGen3 classifiable) and its subheadings, see supra, describe
printers that are even further removed from descriptive coverage of the iGen3 for the reasons
aforesaid. Heading 8472 is intended to cover the kind of “office work” machinery explained by EN
84.72, and it is clear, in accordance with such explanation, that the iGen3 is not mere “office work”
machinery and is unlike any of the printers described by heading 8472. Cf. NY J86411, supra.
The iGen3, being a far more technologically sophisticated machine than an offset
printer of heading 8443 or the kinds of “other office machine” printers specified by heading 8472,
apparently does not “function” like an offset printer or the other office machine printers of heading
8472, and there is no requirement in heading 8471 that printers thereof cannot exceed a certain print
quality. Nor, for that matter, is there any indication of print quality in heading 8443 or subheadings
thereof. The only distinction among the subheadings of heading 8471 is with respect to the number
27
(...continued)
is ‘typing,’ though there might be no typewriter in the vicinity. Similarly, computers today are used
to perform a wide range of functions formerly performed by the ‘word processors’ of heading 8469,
but they are not classified in that heading because heading 8471 and its associated chapter notes
more fully and specifically describe them.” Pl’s Reply at 14.
Court No. 05-00474 Page 30
of pages per minute that are printable. Subheading 8471.60.51.00 in particular covers an ADP
machine “output unit[ ]” in the form of a “laser” printer “[c]apable of producing more than 20 pages
per minute”, which provision of the year 2004 version of heading 8471 provides the most accurate
HTSUS description of that aspect of the iGen3’s functionality.
Lastly, the court notes in passing that the fact that language of subheading
8471.60.51.00, along with other printer subheadings of heading 8471, has since been moved to
within heading 8443 does not speak in favor of holding the iGen3 classifiable at the time of its
importation in 2004 under that heading (8443), but actually makes the conclusion that the iGen3 is
classifiable under the language of that subheading, as it existed at the time under heading 8471, more
compelling.
V. Conclusion
All in all, the evolution of Johannes Gutenberg’s machine to unimpressive digital
print is rather impressive. That the iGen3 can perform operations formerly or alternatively
performed by non-ADP machines does not mean that it is not an ADP unit, because, as Customs
earlier pointed out, the tariff nomenclature is designed to adapt to changing technologies. See HQ
959651, supra, at 6 (citations omitted). The meaning of automatic data processing machine “will
be held to embrace all articles subsequently created [that] come within its scope.” Sears, Roebuck
& Co. v. United States, 46 C.C.P.A. 79, 82 (1959). Accordingly, judgment will be entered in the
plaintiff’s favor.
/s/ R. Kenton Musgrave
R. Kenton Musgrave, Senior Judge
Dated: November 23, 2015
New York, New York