HQ H264771
CLA-2 OT:RR:CTF:TCM HQ H264771 TSM
Port Director, Port of Tampa, Florida
U.S. Customs and Border Protection
1624 East Seventh Avenue
Suite 101
Tampa, FL 33605
Attn: Jane Mary Greco, Senior Import Specialist
Re: Protest and Application for Further Review No. 1801-14-100012; Classification of character SippaTop™ bottle toppers.
Dear Port Director:
The following is our decision regarding Protest and Application for Further Review No. 1801-14-100012, timely filed on October 1, 2014, on behalf of In Zone Brands, Inc. (“Protestant”) regarding the tariff classification of character SippaTop™ bottle toppers under the Harmonized Tariff Schedule of the United States (HTSUS). Pursuant to Protestant’s request, a meeting was held with members of my staff on June 1, 2016. Protestant also submitted additional argument in a letter dated June 23, 2016, which has been considered herein.
FACTS:
The character SippaTop™ bottle toppers are collectible, spill-proof, reusable, and dishwasher safe tops for children’s juice beverages. The tops are formed of molded plastic to depict only the heads or heads and shoulders of a variety of Disney, Marvel, Warner Bros., Mattel, Hello Kitty, and Nickelodeon children’s characters. Images of the bottle toppers illustrating some of the children’s characters, and their use with children’s juice beverages are displayed below:
Each of the toppers is constructed entirely of plastic and consists of a threaded bottle cap, a molded children’s character, and a straw-like sipper. The sipper is connected to the threaded cap, extends through the character’s head, and exits at the top of the head as a tapered opening from which a child can drink. The toppers and juice beverages are marketed for children. Protestant’s website at www.good2grow.com, describes the SippaTop™ bottle toppers as “spill- proof packaging” that “gives kids more independence – and moms more peace of mind”.
The subject merchandise was entered in two separate entries on May 24, 2013 and August 8, 2013, under subheading 3923.50.00, HTSUS, which provides for “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Stoppers, lids, caps and other closures.” On April 4, 2014 and August 8, 2014, the subject merchandise was liquidated under subheading 3923.50.00, HTSUS, as entered. Protestant claims that the correct classification is in subheading 9503.00.00, HTSUS, which provides for “Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof.”
ISSUE:
Whether the character SippaTop™ bottle toppers are classified under heading 3923, HTSUS, as stoppers, lids, caps and other closures, or under heading 9503, HTSUS, as toys.
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 1801-14-100012 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24 (a) because Protestant alleges that the decision against which the protest was filed is inconsistent with Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (Ct. Int’l Trade 2000), New York Ruling Letter (NY) K85523, dated May 21, 2004, NY L80331, dated October 26, 2004, and NY N011416, dated June 6, 2007.
Merchandise imported into the United States is classified under HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order.
The HTSUS provisions under consideration are as follows:
3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics:
3923.50.00 Stoppers, lids, caps and other closures
9503.00.00 Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof
Additional U.S. Rule of Interpretation (AUSR) 1(a), HTSUS, provides that:
In the absence of special language or context which otherwise requires:
a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
Explanatory note to heading 9503, HTSUS, provides, in pertinent part:
* * *
(D) Other toys.
This group covers toys intended essentially for the amusement of persons (children or adults).
* * *
In its submission, Protestant argues that the bottle toppers under consideration are properly classified as toys. Heading 9503, HTSUS, is the provision for “other toys.” The term “toy” is not defined in the HTSUS. However, the general EN for Chapter 95 states that this “Chapter covers toys of all kinds whether designed for the amusement of children or adults.” Although nothing in heading 9503 or the relevant Chapter notes explicitly states that an item's classification as a "toy" is dependent upon its use, the Court of International Trade (CIT) has found inherent in various dictionary definitions of “toy” the notion that an object is a toy only if it is designed and used for amusement, diversion or play, rather than practicality.
In the instant case, the bottle toppers offer eye-catching packaging, which has been designed to appeal to a target group of consumers, i.e., children and parents. The play value and/or inherent amusement of the bottle topper is limited due to the fact that, once removed from the juice beverage container, it is a threaded cap, with a sipper straw and the head and/or head and shoulders of a licensed character. While the bottle toppers may be collectible, they are also dishwasher safe and used and reused to “rejoice.” Protestant’s website at www.good2grow.com, confirms:
“Save the character SippaTop™ cap. Rejuice. Repeat often.”
“Bonus: the SippaTop™ caps are collectible, reusable, and dishwasher safe!”
The Protestant’s website further confirms that the bottle toppers are primarily designed to enhance and/or draw attention to the label and are intended as a marketing device. See also HQ 967486, dated June 30, 2005. Protestant’s website at www.good2grow.com, explains:
“We're putting a new face on nutrition. Lots of 'em. Because good2grow® combines nutritious beverages with a variety of cool, collectible, character SippaTop™ caps, kids can't resist drinking healthily. No fuss. No muss. Just happy, healthy kids sipping nutritious beverages across America.”
Furthermore, the design of the bottle toppers is not necessarily conducive to use as a finger puppet and it is unclear whether the consumer would find it amusing to use the article in this manner when it only represents the heads and/or heads and shoulders of the licensed characters. Any amusement that these articles may provide is incidental to their utilitarian function as a spill-proof cap and drinking apparatus. Protestant’s website at www.good2grow.com, explains that the juice bottles are fitted with patented spill-proof bottle toppers:
“Our patented spill-proof SippaTop™ caps and convenient pack sizes make it the perfect choice for car rides and lunch boxes. All smiles, and no spills.”
“No spills. All smiles.”
“We've all been there. You're in the car, and offspring #2 spills her drink for the umpteenth time. It's never a happy moment. That's why our good2grow® bottles are fitted with patented spill-proof character SippaTop™ bottle toppers. Kids feel more independent, moms can relax, and car seats stay oh-so dry and clean.”
In order to determine whether an article is a “toy” within the meaning of Chapter 95, HTSUS, it is necessary to compare whether the primary purpose is to amuse or to provide a utilitarian/functional quality. See HQ 966046, dated May 16, 2003 and HQ 963638, dated November 2, 2001. In Ideal Toy Corp. v. United States, 78 Cust. Ct. 28, C.D. 4688 (1977), the court stated that "[W]hen amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utility purpose is incidental to the amusement." Therefore, if the level of play value and amusement of the article is not sufficient to constitute its principal use, the article is not a toy. See United States v. Topps Chewing Gum, Inc., 440 F.2d 1384 (1973); HQ 229863, dated February 10, 2004.
There is established precedent that is directly on point wherein CBP has determined that a decorative container lid, molded in the shape of a cartoon character, is not classifiable as a “toy” in Chapter 95, HTSUS. In HQ 966633, dated March 18, 2005, CBP addressed the classification of certain plastic articles, identified as “Roto Toppers”, which are molded in various cartoon character shapes including “Sponge Bob”®, “Dora the Explorer”®, and others. Each “Roto Topper” consisted of two fitted pieces, a plastic threaded lid and a blow-molded three dimensional plastic object in the form of a cartoon character attached to the lid. The “Roto Toppers” were designed to be detached from the container and saved as an interactive or collectible toy. CBP determined that the “Roto Toppers” were a composite good and under a GRI 3(b) analysis, found the essential character to be functional, i.e., as a closure on the top of a beverage container. Similarly, in HQ 962447, dated August 12, 1999, we classified the “Disneyland”® Toppers as decorative lids and not as toys. We found that although the toppers were interesting to look at they had no manipulative play value. We further concluded that since they were primarily decorative and were not principally designed to be played with, the toppers were not classified as toys. In HQ 961840, dated May 7, 1999, we determined that the Jurassic Park Dinosaur Bottle Topper was not a toy. In HQ 966046, dated May 16, 2003, we determined that the “Bob the Builder” bubble bath topper and collection of bath products were not toys. See also HQ 959588, dated February 5, 1997; HQ 959784, dated March 25, 1997.
In the case of Minnetonka Brands, Inc. v. United States, 110 F. Supp. 2d 1020, 1026 (CIT 2000), which classified full-figured, three-dimensional, plastic objects in the form of well-recognized children’s characters as “. . . [t]oys representing animals or non-human creatures . . . Other” under subheading 9503.49.00, HTSUS, the court found that an object must be designed and used for amusement, diversion or play, rather than practicality in order to be classified as a “toy” of heading 9503, HTSUS. In Minnetonka, the CIT further noted that because heading 9503, HTSUS, is, in relevant part, a principal use provision, classification under this provision is controlled by the principal use "of goods of that class or kind to which the imported goods belong" in the United States at or immediately prior to the date of importation. Additional U.S. Rule of Interpretation 1(a), HTSUS. See also Primal Lite, Inc. v. United States, 182 F.3d 1362, 1365 (Fed. Cir. 1999). In Minnetonka, the court stated that in determining whether the imports are of the class or kind of merchandise whose principal use is amusement, diversion or play, or for the conveyance or packaging of goods, certain factors must be examined: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See United States v. Carborundum Company, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979.
Despite established CBP precedent, Protestant argues that the SippaTop™ bottle toppers are actually used as toys (emphasis added). Protestant argues that the bottle toppers provide accurate representations of a wide variety of characters, and are of a three dimensional design and anthropomorphic nature. Protestant argues that these are physical characteristics of items of amusement, diversion or play. However, we note that unlike the merchandise in Minnetonka, the SippaTop™ bottle toppers are not full figure characters, and they do not have moving limbs. The bottle toppers at issue comprise the head and/or head and shoulders of the licensed characters and is distinguishable from the full-figured (head, arms, torso, legs), three-dimensional, plastic objects, which were classified as "toys" of subheading 9503.49.00, HTSUSA, in Minnetonka case. In addition, the play value and/or inherent amusement of the bottle topper is limited due to the fact that, once removed from the juice beverage container, it is a threaded cap, with a sipper straw and the head and/or head and shoulders of a licensed character.
In addition, Protestant argues that the development, design, and production of the SippaTop™ bottle toppers is different from that of a “simple flat” bottle top. Protestant explains that it involves the development of a two-dimensional conceptual design, followed by the manufacturing of a digital sculpture and three-dimensional prototype of the sculpture. Protestant explains that these stages in process development are distinct from those used to produce a “simple flat” bottle top. Protestant argues that the more complicated production process, including the detailed painting and decorating of the featured characters demonstrates the SippaTop™ bottle toppers’ play value over that of a “simple flat” bottle top. Again, when we examine the general physical characteristics of the SippaTop™ bottle toppers, the play value and/or inherent amusement of the bottle topper is limited due to the fact that, once removed from the juice beverage container, it is a threaded cap, with a sipper straw and the head and/or head and shoulders of a licensed character.
Although the bottle toppers provide an entertaining way to drink a juice beverage, thus making the specific activity of drinking a juice beverage more attractive to the user, drinking is a function, not amusement. In the tariff context, "amuse" is mainly used in contrast to some utilitarian or functional quality, and the focus is whether an article is designed to amuse in the same way articles commonly thought of as toys do. See HQ 966046, dated May 16, 2003 and HQ 963638, dated November 2, 2001. As referenced above, in Ideal Toy Corp. v. United States, 78 Cust. Ct. 28, C.D. 4688 (1977), the court stated that "[W]hen amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utility purpose is incidental to the amusement." Although the subject bottle toppers provide a certain level of amusement to the users, amusement is incidental to their utilitarian and principal purpose, which is drinking. Although Protestant also argued that the subject toppers feature full figure toy characters, many of which have moving limbs which enhance their amusement and play value, we note from the protest and the www.good2grow.com website that the subject bottle toppers feature only character heads with no moving limbs.
Protestant argues that the bottle toppers are regularly tested in accordance with toy industry standards. The following tests are performed: Standard Consumer Safety Specification for Toy Safety test, as well as pull tests, lead content tests, phthalate contents tests, and bisphenol A content tests. Protestant also argues that the bottle toppers are produced oversized in order to pass the toy industry “choke test.” In addition, the bottle toppers are manufactured so as to not have their parts separate, consistent with industry standards for the physical characteristics of toys. However, these standards demonstrate and confirm that the products are important when used by children for the safe consumption of juice beverages. Consumer standards and product safety are important because the SippaTop™ bottle toppers contain a sipper straw. Again, the play value and/or inherent amusement of the bottle topper is limited. The expectation of the ultimate purchaser is that the SippaTop™ bottle toppers will be safe for the consumption of juice beverages.
Protestant argues that the bottle toppers are designed, marketed, and advertised for their play value as items of amusement rather than for their utility as bottle toppers. Protestant states that it markets the toppers on social media as toys, and encourages children to play with the toppers. It notes that like toys, their selection of available character representations on the bottle toppers is large and constantly changing. The character selection variety is separate and apart from any utilitarian or function of the bottle toppers, which demonstrates their play value. It notes that the packaging describes them as “toy tops for fun play,” and that the additional description on the back of the packaging states “hours of amusement,” “interactive character bottle top figures,” and “great birthday parties and play sessions.”
Protestant also explains that the bottle toppers are packaged and sold in two-packs separately from any beverage products in various retailers nationwide including toy store chains, mass retail stores, and grocery and convenience stores. Protestant concludes that the bottle toppers will actually be used as toys as much, if not more, than the toy character toppers sold with bottled beverage products. Protestant argues that consumers will not be purchasing the bottle toppers as replacements for bottle caps, but as toys. Protestant explains that the bottle toppers can be purchased on the www.good2grow.com website via the “Buy Now” link and on www.amazon.com.
Additionally, Protestant explains that the bottle toppers are manufactured in toy factories, and are not sold in the market to compete with “simple flat” bottle toppers. Instead, they compete with other toy character figures whose primary use is amusement, play or diversion.
While dismissing CBP precedent by citing Minnetonka, much of Protestant’s argument and video presentations focus on the bottle toppers’ actual use. Clearly, this is not the test in Minnetonka.
Again, in Minnetonka, the court stated that in determining whether the imports are of the class or kind of merchandise whose principal use is amusement, diversion or play, or for the conveyance or packaging of goods, certain factors must be examined: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See United States v. Carborundum Company, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979.
In response, and with regard to the channels, class or kind of trade, the environment of sale and the manner in which the subject bottle toppers move, as well as the manner in which the SippaTop™ bottle toppers are marketed, advertised, and sold, we note Protestant’s own statements on their website found at www.good2grow.com, states the following:
“We're putting a new face on nutrition. Lots of 'em. Because good2grow® combines nutritious beverages with a variety of cool, collectible, character SippaTop™ caps, kids can't resist drinking healthily. No fuss. No muss. Just happy, healthy kids sipping nutritious beverages across America.
Be the first to know about new character toppers, flavors, tips for helping your kids drink healthy and more.”
Spill-proof SippaTop™ cap eliminates messes – perfect for on the go!
Kids have different nutritional needs depending on their ages. We're up for the challenge. That's why good2grow® comes in two sizes, providing age-appropriate nutrition across many yummy flavors.
All our packaging is BPA free (of course), and we made our new bottles with state of the art oxygen barrier technology to seal out the oxygen – for fresher, longer lasting taste and full vitamin potency.
Our character SippaTop™ bottle toppers on 6oz products are spill-proof, reusable and dishwasher safe. And our contoured shape is just right for a kid-sized grip.”
Protestant’s own statements on its www.good2grow.com website demonstrate that the SippaTop™ bottle toppers are advertised and sold as bottle toppers to be used with bottles, for a “cooler” way for children to consume beverages. The SippaTop™ bottle toppers are not advertised and sold as toys; they are sold on the www.good2grow.com website along with the bottles of juice that fit the bottle toppers. They are also described on the www.good2grow.com website as “packaging.” The toppers contain a sipping straw, and the sample bottle of juice provided by Protestant at the meeting demonstrated that the bottles of juice otherwise have no caps or lids, and are merely safety sealed with a foil covering. Protestant has provided no evidence that the bottle toppers are sold in toy stores. Therefore, the expectation of the ultimate consumer is to purchase the SippaTop™ bottle toppers for the consumption of the juice beverages. Since the SippaTop™ bottle toppers are sold as bottle toppers, the expectation of the ultimate purchasers is to use them as bottle toppers.
Protestant argues that ultimate consumers expect that the SippaTop™ bottle toppers will be used for play, and that they are purchased mainly for the amusement value of a toy. In fact, Protestant never acknowledges the utility of the bottle toppers, and dismisses the utility of the bottle toppers in the consumption of the juice beverages. Instead, Protestant argues that customer testimonials suggest that the bottle toppers’ value is in amusement rather than utility, because children play with the bottle toppers. An example of such testimonials, provided by the Protestant, reads as follows: “My daughter loves your character toppers! You have all of her favorite characters – Minnie, Daisy, Hello Kitty, etc. Every time we go to the store, she knows where your products are and can’t wait to find her favorite character toppers and pick out a new one!” Although the character heads featured on the subject toppers make the activity of drinking more attractive to the user, they are nevertheless purchased by the ultimate consumer to be used as bottle toppers. Protestant’s own statements on their website do not contradict this conclusion. Based upon our examination of the Carborundum factors, we conclude that the SippaTop™ bottle toppers are not of the class or kind of merchandise whose principal use is amusement, diversion or play.
Finally, Protestant argues that the decision against which the protest was filed is inconsistent with NY K85523, dated May 21, 2004; NY L80331, dated October 26, 2004; and NY N011416, dated June 6, 2007, which determined that certain bottle toppers and decanters were toys of heading 9503, HTSUS.
In NY L80331, at issue was the classification of a “Disney Bubble Topper Assortment” which was described as a “clear bottle containing bubble-blowing liquid with a Disney Character on the bottle’s lid and a plastic bubble-blowing wand with the same Disney character on the handle.” However, the “Disney Bubble Topper Assortment” was considered to be a composite good. Pursuant to GRI 3(b), the essential character was imparted by the bubbles/wand toy, and it was classified in heading 9503, HTSUS. In NY 011416, at issue was the classification of a “Go Diego Go” decanter. It consisted of a decanter topper, a decanter bottle, a decanter hang tag, and a decanter cap. The ruling indicated that the decanter/bottle will be filled with bubble bath upon arrival in the United States. CBP determined that the decanter could be used as a container, but that the aesthetic appeal of the product and the intrinsic value attributed to the figure rendered the article more akin to a toy. Unlike the subject merchandise, the “Go Diego Go” “figure” rendered the product more akin to a toy. It has long been CBP’s position that articles constructed with full depictions of characters are classified as toys, since they possess independent play value and their main purpose is that of amusement.
NY K85523, dated May 21, 2004, CBP classified, in relevant part, a Sponge Bob Square Pants character topper in heading 9503, HTSUS. It was described as a “SpongeBob SquarePants bottle topper figure sitting in a bathtub and holding a bubble wand”. CBP further described the product as follows: “The toppers are not caps themselves. They are not threaded and they do not function to seal or close the bottle. Rather, they are decorative articles that fit over the cap. All are molded of plastics.” Unlike the subject bottle toppers, CBP determined that the Sponge Bob Square Pants character topper, which was not a topper or cap itself, possessed “independent play value aside from its use as a cap topper.
Based on the foregoing, we conclude that the SippaTop™ bottle toppers are classified in subheading 3923.50.00, HTSUS, which provides for “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Stoppers, lids, caps and other closures.”
HOLDING:
By application of GRIs 1 and 6, the SippaTop™ bottle toppers are classified in heading 3923, HTSUS, and specifically in subheading 3923.50.00, HTSUS, which provides for “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Stoppers, lids, caps and other closures.” The column one, general rate of duty is 5.3% ad valorem.
You are instructed to DENY the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division