SAMSUNG INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.
Court No. 10-00015
United States Court of International Trade
Nov. 21, 2012.
Slip Op. 12-144
RESTANI, Judge
CONCLUSION
For the foregoing reasons, the court concludes that the Final Determination is in accord with the law and is supported by substantial evidence, except with respect to Commerce‘s explanation of its findings regarding the surrogate value for drill pipe green tube and to its findings regarding the surrogate labor wage rate as applied to DP-Master. On remand, Commerce must either select a new surrogate value or explain why IHTS categories 7309.23 and 7309.29 are more representative of the price for drill pipe green tube than other potential surrogate values in light of Infodrive data that appears to demonstrate that the categories do not actually “capture” green tube imports, and are highly distorted by expensive, finished tubular goods. This court also reserves judgment on any constitutional issues until after Commerce returns with its remand results.
ORDER
In accordance with the above, it is hereby
ORDERED that this case is remanded to the United States Department of Commerce, International Trade Administration, to reconsider its findings regarding drill pipe green tube and labor wage rate surrogate values; and it is further
ORDERED that the Final Determination is affirmed in all other respects; and it is further
ORDERED that the remand results are due within ninety (90) days of the date this opinion is entered. Any responses or comments are due within thirty (30) days thereafter. Any rebuttal comments are due within fifteen (15) days after the date responses or comments are due.
Marcella Powell, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, argued for defendant. With her on the brief were Stuart F. Delery, Acting Assistant Attorney General, and Barbara S. Williams, Attorney in Charge. Of counsel on the brief was Paula Smith, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.
OPINION
RESTANI, Judge:
This matter is before the court on cross-motions for summary judgment by Plaintiff Samsung International, Inc. (“Samsung“) and Defendant United States (“the Government“) pursuant to
FACTS
The parties do not dispute the following facts related to the procedural background of this case. Samsung imported flat panel plasma televisions and video monitors (“the imported goods“) into the United States from Mexico between December 2004 and June 2005 under subheading 8528.12.72, Harmonized Tariff Schedule of the United States (“HTSUS“), and 8528.21.70, HTSUS, respectively.2 Pl.‘s Br. 2; Statement of Undisputed Material Facts (“Pl.‘s Facts“) ¶ 1; Def.‘s Resp. ¶ 1. The imported goods contained either a V3 or V4 version of the PDP Module. Pl.‘s Facts ¶ 14; Def.‘s Resp. ¶ 14.
Samsung timely filed a request for NAFTA post-importation duty refunds on the imported goods. Pl.‘s Facts ¶ 3; Def.‘s Resp. ¶ 3. Customs denied the request based on two prior Customs rulings: NY K83248 and NY K83886. Pl.‘s Facts ¶ 4; Def.‘s Resp. ¶ 4. These rulings had classified plasma screens combined with various electronic assemblies as “flat panel screen assemblies” (“FPSAs“) under
Samsung timely filed protests and applications for further review of the denial of its requested NAFTA refunds, arguing that the incorporated PDP Modules did not constitute FPSAs of
In August 2004, prior to Samsung‘s importation of the imported products, a NAFTA Customs subgroup issued a definition of “flat panel screen assemblies.” Pl.‘s Facts ¶¶ 65-66; Def.‘s Resp. ¶¶ 65-66. The NAFTA subgroup stated that “[f]or purposes of tariff item 8529.90.ee, the phrase ‘flat panel screen assemblies’ means an assembly consisting of at least
The parties do not dispute the following facts related to the components and function of the PDP Modules. Both the V3 and V4 versions of the PDP Module were manufactured in Korea. Pl.‘s Facts ¶ 13; Def.‘s Resp. ¶ 13; Def.‘s Statement of Undisputed Facts (“Def.‘s Facts“) ¶ 3; Pl.‘s Resp. to Def.‘s Statement of Undisputed Facts (“Pl.‘s Resp.“) ¶ 3. The V3 PDP Module consisted of glass panels, a X Driver, a Y Driver, a Column Driver, a Logic Board, Logic Buffers, a chassis, and a power supply. Pl.‘s Facts ¶ 46; Def.‘s Resp. ¶ 46. The glass panels contained plasma glass, X electrodes, Y electrodes, and Column electrodes.4 Pl.‘s Facts ¶ 48; Def.‘s Resp. ¶ 48. The V4 Module contained the same components, but its Logic Board was not attached to the Module at the time of importation. Pl.‘s Facts ¶¶ 43-44; Def.‘s Resp. ¶¶ 43-44. The Logic Board of the V3 PDP Module5 contained several integrated circuits, including a Sequence Processor, Data Processor, Data Distributor, read only memory processors, and a Decoder. Def.‘s Facts ¶ 8; Pl.‘s Resp. ¶ 8. Once in Mexico, the PDP Modules were combined with a Main Board, which was manufactured in Mexico, front and rear covers, cables, and various connectors, fasteners, and other parts to produce the finished video monitors and televisions. Pl.‘s Facts ¶¶ 18, 31; Def.‘s Resp. ¶¶ 18, 31.
The Main Board receives signals, in various formats from an outside source, such as a DVD player or a cable box, processes all of these signals, and converts the signals into a Low Voltage Differential Signal (“LVDS“). See Pl.‘s Facts ¶ 38; Def.‘s Resp. ¶ 38. The LVDS signal is a compressed image data signal composed of synchronization signals (V-sync and H-sync signals)6 and raw image data signals, which include “Red Green Blue” information. Pl.‘s Facts ¶¶ 28, 39; Def.‘s Resp. ¶¶ 28, 39. The Main Board sends the data
Because the Drivers on the PDP Module cannot understand a LVDS signal, the Logic Board‘s Decoder takes the LVDS signal from the Main Board and converts it into a format that the Drivers can understand. Def.‘s Facts ¶¶ 15, 16; Pl.‘s Resp. ¶¶ 15, 16. The Decoder then sends the video information and instructions to the Logic Board‘s Sequence Processor.7 Def.‘s Facts ¶ 17; Pl.‘s Resp. ¶ 17. The Sequence Processor converts the sync signals into timing information. Def.‘s Facts ¶ 19; Pl.‘s Resp. ¶ 19. The Sequence Processor then takes the video information and instructions from the Decoder and converts those instructions in accordance with the timing information derived from the sync signal. Def.‘s Facts ¶ 18; Pl.‘s Resp. ¶ 18. The signal is then sent to the Data Processor, which performs part of the “subfield pattern” process.8 Def.‘s Facts ¶ 28; Pl.‘s Facts ¶ 25. Finally, the signal is sent to the Data Distributor. Def.‘s Facts ¶ 29; Pl.‘s Resp. ¶ 29. The Data Distributor stores the data in its memory and routes the data to the appropriate Driver. See Def.‘s Facts ¶¶ 30-31. This ends the functions of the Logic Board. The Drivers take the information from the Logic Board and “make and deliver driving waveforms [i.e. electrical pulses],” that are sent to the respective electrodes (i.e. the X Driver sends a waveform to the X electrodes), thereby illuminating the pixels and plasma gas to create an image. Pl.‘s Facts ¶ 60; Def.‘s Resp. ¶ 60.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction over the denial of a timely protest under
Summary judgment is appropriate if there is “no genuine issue as to any material fact” and “the movant is entitled to judgment as a matter of law.”
DISCUSSION
The issue in this case is whether Samsung‘s PDP Modules are classified as “flat
Under the NAFTA ROO, incorporated into HTSUS General Note 12, only “[g]oods originating in the territory of a party to [NAFTA]” are eligible for NAFTA preferential treatment. General Note 12(a). When a product is produced in a NAFTA country using materials or parts obtained from countries outside of NAFTA, the non-NAFTA originating part must be “transformed” in the NAFTA territory “so that ... each of the non-originating materials used in the production of such goods undergoes a change in tariff classification” as described in the ROO. General Note 12(b)(ii)(A).9 This change in the tariff classification of the non-originating material is known as a “tariff shift.”10
Here, the applicable NAFTA ROO prohibit a tariff shift from a FPSA to a video monitor or television reception apparatus. General Note 12(t), Chapter 85, No. 90, 92H.11 In other words, a video monitor or television reception apparatus does not receive NAFTA preferential treatment if it was made using a FPSA produced in a non-NAFTA country.
I. HTSUS 8529.90.53
A. Heading 8529
Samsung and the Defendant agree that the subheading must be interpreted in
The proper interpretation of a tariff item begins with the “terms of the heading.” General Rules of Interpretation (“GRI“) 1. Heading 8529 refers to: “Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528.” Headings 8528 includes, inter alia, video monitors and television reception apparatus, which are the relevant products here. 8528, HTSUS.13 Thus, in order to be classified in 8529, the item must be a part used solely or principally with some other apparatus of headings 8525 to 8528, including video monitors and television reception apparatus.
Heading 8529 applies only to “parts” used with articles classified in headings 8525 through 8528.14 A part is distinguished from a finished product and from an unfinished product that possesses the essential character of the finished product. See GRI 2(a) (stating that unfinished products possessing the essential character of a finished product are to be classified in the heading of the finished product). Thus, the proper construction of the term FPSA does not encompass a product that possess the essential character of a finished television or video monitor.
B. Subheading 8529.90.53
Samsung argues the proper classification of its PDP Modules is 8529.90.89 (Other; Of television receivers; Other).15 Defendant argues that Customs properly classified the PDP Modules as FPSAs of 8529.90.53 (Flat panel screen assemblies ... ).16 Because Samsung‘s proposed subheading is an “Other” category, the court will first consider the proper construction of 8529.90.53.
Samsung argues that the proper construction of subheading 8529.90.53 is reflected in the NAFTA Clarification. Pl.‘s Reply 7. Defendant argues that the proper construction of the subheading can be de-
Subheading 8529.90.53 applies to “Flat panel screen assemblies for the apparatus of subheadings 8528.12.62, 8528.12.64, 8528.12.68, 8528.12.72, 8528.21.55, 8528.21.60, 8528.21.65, 8528.21.70, 8528.30.62, 8528.30.64, 8528.30.66 and 8528.30.68.” The listed subheadings apply to various types of color plasma video monitors, television reception apparatus, and video projectors. The term “flat panel screen assemblies” is not defined in the HTSUS section notes, chapter notes, or in the HTS Explanatory Notes.
When the HTSUS and its legislative history do not define a tariff term, the correct meaning is the common meaning. Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). “The common meaning of a term used in commerce is presumed to be the same as its commercial meaning.” Id. at 1356 (citing Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)). “To ascertain the common meaning of a term, a court may consult ‘dictionaries, scientific authorities, and other reliable information sources’ and ‘lexicographic and other materials.‘” Id. at 1356-57 (citing Simod, 872 F.2d at 1576).
Instead of dictionary definitions, both parties put forth a definition of FPSA developed by a NAFTA subgroup, referred to here as the NAFTA Clarification. The NAFTA Clarification stated, “[f]or purposes of tariff item 8529.90.ee, the phrase ‘flat panel screen assemblies’ means an assembly consisting of at least drive electronics, control electronics and a display device, other than LCD technologies.” Def.‘s Ex. A at 3. Additionally, “[i]f at least one of the components of the definition ... is not incorporated, such assembly shall not be classifiable within tariff item 8529.90.ee.” Id. at 3 n. 2.
Although not controlling, the court concludes that the NAFTA Clarification is a reliable source that can assist the court in ascertaining the common meaning of FPSA. See Rocknel Fastener, 267 F.3d at 1357 (stating that the court may consult “other reliable information sources” when determining common meaning). The NAFTA Clarification is consistent with the terms of the subheading in that it refers to a collection of parts that can be combined with a flat panel screen. The experts who addressed the issue of whether the NAFTA definition reflects the common meaning of FPS in the plasma industry stated that the NAFTA definition reflects the industry understanding of FPSAs. See Declaration of Elliott Schlam (“Schlam Declaration“), Def.‘s Ex. B at ¶ 12 (“When the NAFTA Customs Subgroup defined ‘Flat Panel Screen Assemblies,’ it referred to the display device, the driver electronics and the control electronics. As discussed above it was clearly referring to the terminology used by the entire display industry.“).18
The NAFTA Clarification, however, did not define “drive electronics, control electronics and a display device.” Thus, the court must determine the common meaning of these terms before it can define FPSA.
1. Drive Electronics
Samsung argues that drive electronics “drive an object, by sometimes needing to reformat the data, to power and control another circuit by providing input to the other circuit....” Pl.‘s Br. 22. Samsung argues that the distinguishing characteristic between drive and control electronics is that drive electronics have “no independent intelligence” and cannot “alter the instructions contained in the signal” but instead “do what they are told.” Pl.‘s Br. 22. Defendant argues the court should extend Skidmore19 deference to Custom‘s definition of drive electronics set forth in the Pioneer Ruling. Def.‘s Br. 16-20. The Pioneer Ruling defined drive electronics as electronics that take information from the control electronics and “energize and de-energize the appropriate cell on the display in order to create an image.” Pioneer Ruling 5.
The parties provide the following dictionary definitions of “drive” as evidence of the common meaning of drive electronics:20
Alan Freedman‘s Computer Glossary (9th ed.), Pl.‘s Ex. 20drive 2: to provide power and signals to a device
The IEEE Standard Dictionary of Electrical and Electronics Terms (6th ed.), Pl.‘s Ex. 20drive 1: the equipment used for converting available power into mechanical power suitable for the operation of a machine
The Random House Dictionary of the English Language, Def.‘s Ex. T.drive 35 (electronics): excitation
drive 2: to force to work or act
Funk & Wagnalls Standard College Dictionary, Def.‘s Ex. Udrive 9: to provide the motive power for and cause to operate; make function
drive 11 (mechanical): a means of transmitting power, as from the motor of an automobile to the wheels
The record also contains the following definitions of “driver“:
Alan Freedman‘s Computer Glossary (9th ed.), Pl.‘s Ex. 20driver 2: a device that provides signals or electrical current to activate a transmission line or display screen
The IEEE Standard Dictionary of Electrical and Electronics Terms (6th ed.), Pl.‘s Ex. 20driver 1: an electrical circuit that supplies input to another electronic circuit
driver 2: (A) a software module that invokes and, perhaps, controls and monitors the execution of one or more other software modules. (B) A computer program that controls a peripheral device and, sometimes, reformats data for transfer to and from the device
driver 3: a program, circuit or device used to power or control other programs, circuits or devices
IBM Dictionary of Computing, Def.‘s Ex. Hdriver 2: a system or device that enables a functional unit to operate
driver 4: a circuit that sends small electronic signals to a device
Merriam-Webster‘s Collegiate Dictionary, Pl.‘s Br. 21-22driver 5a: the means for giving motion to a machine or machine part
driver g: an electronic circuit that supplies input to another electronic circuit
These dictionary definitions demonstrate that “drive” means providing power to a device in order to turn it on or cause it to act. “Driver” refers to an electrical device that supplies an input or electronic signal to another device in order to activate it. In the context of computer software, a driver “perhaps” controls another software module and “sometimes” reformats the data. Samsung argues that the defining characteristic of drive electronics is the inability to make independent judgments and change, manipulate, or create the image data contained within a signal. None of the above definitions for “drive” or “driver” reference the inability to make independent judgments. Furthermore, Samsung‘s own experts state that “drive” is a generic term that can be applied to any undefined or unspecific electronic circuit. Yang Report, Pl.‘s Ex. 7 at 20 (“[T]he term ‘drive’ as used in Electrical Engineering encompasses all electronics and devices that are undefined and unspecific, making
Thus, the court concludes that drive electronics supply a signal or electrical current to another device in order to activate it or run it.
2. Control Electronics
Samsung argues that control electronics are electronics that possess a “decision-making” or “intelligent function” and can control “all aspects of the color television or video image display[.]” Pl.‘s Br. 27; Pl.‘s Reply 16. Specifically, Samsung argues that control electronics “create the instructions” used to control a television screen and that control electronics have the ability to “judge or independently make decisions.” Pl.‘s Br. 24-26.
Defendant argues that the Court should extend Skidmore deference to Custom‘s definition of control electronics as stated in the Pioneer Ruling. Def.‘s Br. 16-21. The Pioneer Ruling defined control electronics as the electronics that “manage the data (timing and order), which is used to ultimately create an image on the display” and which “direct video signals and timing instructions to the drive electronics.” Pioneer Ruling 5. Samsung argues that if the court adopts Customs’ definition, the definition should be read to state that control electronics must have the ability to accept “video signals,” as opposed to Low Voltage Differential Signal (“LVDS“) signals, and have the ability to “instruct, regulate, manage and supervise” those video signals. Pl.‘s Br. 24-26; Pl.‘s Reply 16; see infra n. 28.
The parties provide the following definitions of “control“:
IBM Dictionary of Computing, Def.‘s Ex. H; Pl.‘s Ex. 20control 1: the determination of the time and order in which the parts of a data processing system and the devices that contain those parts perform the input, processing, storage, and output functions
McGraw-Hill Dictionary of Scientific and Technical Terms, Def.‘s Ex. Scontrol 1: the section of a digital computer that carries out instructions in proper sequence, interprets each coded instruction, and applies the proper signals to the arithmetic unit and other parts in accordance with this interpretation
control 2: a mathematical check used in some computer operations. A means or device to direct and regulate a process or sequence of events
Oxford English Dictionary Online, Def.‘s Br. 17control: the fact of controlling, or of checking and directing action; the function or power of directing and regulating....
control (computing): that part of a computer which controls the operation of the other units and in recent computers interprets the coded instructions
The parties also provides the following definitions of “controller“:
The Dictionary of Multimedia Terms & Acronyms (1999 ed.), Def.‘s Ex. Gcontroller: in computer hardware, a processing component that manages the flow of data between the computer and peripheral devices.
IBM Dictionary of Computing, Def.‘s Ex. H; Pl.‘s Ex. 20controller: a device that coordinates and controls the operation of one or more input/output devices, such as workstations, and synchronizes the operation of such devices with the operation of the system as a whole.
The IEEE Standard Dictionary of Electrical and Electronics Terms (6th ed.), Pl.‘s Ex. 20. controller 2: a device or group of devices that serves to govern, in some predetermined manner, the electric power delivered to the apparatus to which it is connected
controller 4: the component of a system that functions as the system controller. A controller typically sends program messages to and receives response messages from devices.
controller 5A: a functional unit in a computer system that controls one or more units of the peripheral equipment
controller 5C: a device through which one can introduce commands to a control system.
Webster‘s New International Dictionary, Def.‘s Br. 17.controller (electrical): any electric device for governing in some pre-determined way the power delivered to the apparatus
The definitions demonstrate that the term “control” refers to an electronic device or computer part that exercises “control” over another device or subsystem. This control function is described in various ways, including carrying out instructions in a proper sequence, interpreting coded instructions, determining the time and order of the device‘s actions, managing the flow of data, coordinating and synchronizing operations, governing the electrical power sent to the device, and accepting commands and carrying out instructions.
Samsung argues that the distinguishing characteristic of control electronics is the ability to make “independent decisions” and the ability to alter the information or instructions contained in the signal. See Answer to the Nine Questions: Answers Consolidated by Plasma TV Manufacturers (“Answers to the Nine Questions“), Pl.‘s Ex. 14 (unpublished document prepared by seven plasma television manufacturers during a different customs dispute); Yang Report, Pl.‘s Ex. 7 at 9, 26 (defining control electronics as possessing the ability to choose among various ways of processing information or have the ability to create and change signals). None of the above dictionary definitions specifically reference an ability to make independent judgments or decisions. Some of the definitions imply that control electronics have the ability to “determine” or “generate” a signal, although it is not specified whether this ability is a result of independent judgments, as opposed to merely translating the signal into a new format. Additionally, several definitions state that a controller merely acts according to pre-determined instructions, demonstrating that a device does not need to “create” or “change” the information in a signal to qualify as control. See McGraw-Hill Dictionary of Scientific and Technical Terms, Def.‘s Ex. S (stating control “carries out instructions in proper sequence“); The IEEE Standard Dictionary of Electrical and Electronics Terms (6th ed.), Pl.‘s Ex. 20 (stating a controller “serves to govern, in some predetermined manner, the electrical power....“); Webster‘s New International Dictionary, Def.‘s Br. 17 (stating a controller is a “device for governing in some pre-determined way the power delivered to the apparatus“). Accordingly, Samsung‘s expert reports, which state that control electronics must be able to make independent judgments and “create” the instructions, are not consistent with the dictionary definitions and are not entitled to any persuasive weight. See Kahrs Int‘l, 791 F. Supp. 2d at 1240-41 (noting the court may consider expert opinions as advisory and to the extent they are consistent with lexicographic and other reliable sources).
Moreover, Samsung‘s own experts contradict the argument that all control elec-
As indicated, Samsung now argues that the ability to make “independent judgments” is the determining characteristic of control electronics. By independent judgments, Samsung appears to mean that an electronic device, based on the information it receives, can choose to act in various ways, instead of merely acting in the same way every time. See Yang Report, Pl.‘s Ex. 7 at 26 (defining the decision-making function as taking input commands and reflecting upon the state and circumstances of the output or, in other words, the ability to process information in many ways based on feedback). “Independent decision-making” by an electronic device, therefore, refers to the device‘s ability to alter its functions based on the feedback it receives, instead of merely following a command. Thus, because “independent judgment” and “us[ing] a feedback function to make decisions” are different labels for the same activity, and because Samsung‘s own experts agree that feedback is not required for all control electronics, it follows that the ability to make independent judgments is not a requirement for all control electronics.
Samsung also argues that, consistent with the Pioneer Ruling, control electronics must be able to accept “video signals” from an external device. Pl.‘s Br. 24; see also Choi Report, Pl.‘s Ex. 10 at 9-10 (stating control electronics accept video signals from external devices (i.e. a cable signal) and send out an electronic signal and drive electronics are limited to receiving electrical signals). The dictionary definitions also do not reference the type of signal as a distinguishing element of a control. Instead, the dictionary definitions refer to the ability to accept and process “commands,” “instructions,” “signals,” and “power.” Thus, the court does not find justification for reading into the common meaning of control electronics an ability to create the signal, make independent judgments, or use only video signals.21
The court does not find that the Answer to the Nine Questions requires a departure from the common meaning expressed by the dictionary definitions. The document was not published and was prepared by seven plasma television manufacturers in the context of a specific customs dispute. Additionally, the document contradicts itself by stating there is no accepted or
Consistent with the common meaning as expressed in the dictionary definitions, the court concludes that control electronics are the electronics that perform some type of control function, such as interpreting coded instructions, determining the time and order of a device‘s actions, managing the flow of data, coordinating and synchronizing operations between two devices, governing the electrical power sent to a device, and accepting commands and carrying out instructions in a proper sequence. Control electronics will perform some, although not necessarily all, of these types of functions. Although some control electronics may use “independent judgment” or feedback, it is not a requirement for all control electronics.
The court‘s common definition of control electronics is confirmed by the expert reports in this case. See Kahrs Int‘l, 791 F. Supp. 2d at 1240-41 (noting the court may consider expert opinions to the extent they are consistent with lexicographic and other reliable sources). Here, Defendant‘s experts state that the display industry defines control electronics as the electronics that process the signal from an input device and use that signal to turn on and off the drivers. Schlam Declaration, Def.‘s Ex. B at ¶ 10.
Samsung‘s experts also describe what is called an “open-loop control system,” which refers to a device capable of controlling another subsystem without relying on feedback.23 In an open-loop control system, an “input signal” is sent to a “controller,” the controller converts the input signal into an “actuating signal” that is sent to another subsystem, the actuating signal causes the subsystem to function according to a pre-determined process, and that process produces the desired output. See Choi Report, Pl.‘s Ex. 10 at 12-13. When discussing control theory, the expert report provides a general definition of “controlling function” as “transforming the input signal into the (intermediate) actuating signal that activates the rear-end subsystem to produce the output variable as the
Having determined the common meaning of control and drive electronics, the court now turns to whether Samsung‘s PDP Modules contain a display device, drive electronics, and control electronics and thus, can be classified as FPSAs.
II. Classification of Samsung‘s PDP Modules
Here, the PDP Modules are prima facie classifiable in heading 8529 only.24 The proper subheading at the six-digit level is 8529.90.25
A. V3 PDP Module
The proper classification at the eight-digit level turns on whether the Logic Board meets the definition of control electronics. Samsung argues that the Logic Board is not control electronics because it has no capability to direct video signals or manage the data, and that its only purpose is to energize and de-energize pixels on the display panel. Pl.‘s Br. 23, 29. Samsung also argues that because the Logic Board cannot alter, manipulate, decide, or otherwise affect the instructions sent to the display, it is not control electronics. Pl.‘s Br. 24, 29-30. Defendant argues the Logic Board is control electronics because it directs video signals and timing instructions to the Drivers and manages the data received from the Main Board (outside the article at issue). Def.‘s Br. 23.
As defined above, a FPSA must contain at least a display device, drive electronics, and control electronics. Drive electronics supply a signal or electrical current to another device in order to activate it or run it. Control electronics control a device or system by performing some type of control function, such as such as interpreting coded instructions, determining the time and order of a device‘s actions, managing the flow of data, coordinating and synchronizing operations between two devices, governing the electrical power sent to a device, and accepting commands and carrying out instructions in a proper sequence.
The court finds that the glass panels containing the electrodes and plasma gas constitute a display device because this is the plasma screen that will display the image. The court finds that the X, Y, and Column Drivers are the “drive electronics” because these electronics provide an electrical signal to the electrodes in the panel in order to excite the electrodes.26
The court finds that the Logic Board is a control electronic. The Logic Board exe-
The Logic Board also performs a drive function in that it takes a signal from the Main Board and passes that signal along to the Drivers in order to energize the electrodes and produce an image. Additionally, the Main Board performs a control function by receiving a signal, translating that signal into another format, and sending that signal to the Logic Board. Thus, it is easy for Samsung to argue that the Main Board constitutes control electronics and that the Logic Board is merely a drive electronic that passes on a signal. Samsung‘s experts note, however, that electronics often will perform more than one function and that control electronics can also perform a drive function. Choi Report, Pl.‘s Ex. 10 at 8 (“almost all components of modern consumer electronics execute multiple functions simultaneously and interchangeably, which may not always exclusively fall within one classification or another.“); Yang Report, Pl.‘s Ex. 7 at 24 (“Similarly, a ‘control electronics’
Additionally, the fact that the Main Board executes a control function does not mean that the Logic Board cannot also execute a control function. The Main Board accepts a video signal and processes it into an LVDS format. The Logic Board accepts an LVDS signal and processes it into electrical waveforms. Samsung argues that the process on the Main Board is more complicated than the process on the Logic Board because the Main Board uses a microprocessor and performs “image scaling and processing (enhance) functions.” See Kim Deposition, Pl.‘s Ex. 5 at 26. Samsung‘s expert, however, describes both a complicated controlled system, run by a microprocessor, and a simple controlled system that is not controlled by a computer chip. See Choi Report, Pl.‘s Ex. 10 at 12-13 (quoting B.C. Kuo and F. Golnarachi, Automatic Control Systems (8th ed., John Wiely & Sons, Hoboken, N.J. 2003) at 2-8 (“In simple cases, the controller can be an amplifier, a mechanical linkage, a filter, or other control elements, depending on the nature of the system. In more sophisticated cases, the controller can be a computer such as a microprocessor.“)). Samsung‘s argument that only the microprocessor on the Main Board could constitute control electronics is inconsistent with this textbook definition of more simple controlled systems. Samsung has not adequately explained why a less complicated process of converting and generating an electrical waveform from an LVDS input and using the instructions in the signal to control another subsystem (the Drivers) is not also a control function. In short, Samsung has emphasized the different functions performed by the Main Board and the Logic Board, but Samsung has not demonstrated that the functions of the Logic Board do not also satisfy the common definition of control electronics.
Samsung‘s fundamental error is defining control electronics and drive electronics in the context of a complete television. See Pl.‘s Reply 9, 29 (stating that control electronics must “control the color video image” and that the NAFTA definition of control refers to all of the control electronics in a television). The court cannot consider these definitions in the context of a complete television because it is defining a term that, by definition, must be merely a part of a complete television. Samsung‘s error is illustrated by its attempt to define control elections as the electronic that accepts a video signal from the end-user system (i.e. a cable box or DVD player). It is undisputed that in the context of a complete television, the control electronics include the electronics that accept a video signal from an end-user system. See U.S. Customs, Classification of Flat Panel Displays: An Informed Compliance Publication (Jan. 2004), Def.‘s Ex. K at 7 (defining control electronics in the context of a complete flat panel display (a complete television) as “[i]ntegrated circuits that decode and interpret the signals sent by the end-user system and transmit the signals to the drive electronics.“). This definition demonstrates that the first electronic device connected to an end-user system is a type of control electronic. It does not follow, however, that the definition of control electronics is limited to the first component of a televisions that accepts video signals from the end-user systems.28
B. V4 PDP Module
Samsung argues that because the V4 PDP Module was not imported with a Logic Board attached, the Module cannot have control electronics and therefore is not a FPSA. Pl.‘s Br. 29. Defendant argues the V4 Modules were imported together with the Logic Boards, and thus, are unassembled FPSAs pursuant to GRI 2(a). Def.‘s Br. 26. Samsung replies that the products cannot be classified as FPSAs under GRI 2(a) because (1) complex manufacturing processes are required to manufacture and assemble the V4 Logic Board to the V4 PDP Module; (2) the Logic Board is not control electronics, and (3) even with the Logic Board assembled on the V4 at the time of importation, the V4 has yet to be designated for use in a television versus computer monitor and thus, cannot be classified as a FPSA.30 Pl.‘s
GRI 2(a) states that “Any reference in a heading to an article shall be taken to include a reference ... to that article complete or finished ... entered unassembled or disassembled.” GRI 2(a); see also Explanatory Note V to GRI 2(a) (“[C]omplete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article.“). The Explanatory Notes explain that “‘articles presented unassembled or disassembled’ means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved. No account is to be taken in that regard of the complexity of the assembly method.” Explanatory Note VII to GRI 2(a). “However, the components shall not be subjected to any further working operation for completion into the finished state.” Id.
The Explanatory Notes and case law from the court do not elaborate on the distinction between “assembly operations” and “further working operation.” Customs, when resolving this issue, first considers whether the items were imported together in the same shipment in equal amounts or whether the items were imported in bulk for an assembly operation. See Re: Classification of Plastic Pet Carrier Parts; Not incomplete articles with essential character of complete or finished container: GRI 2(a), HQ Ruling 966894 (Mar. 2004). The former will be considered finished items entered unassembled, and the latter are classified as discrete products. See RE: Protest No. 4909-91-100143; Footwear; Leather Upper; Sock Liner; Constructively Assembled; Goods Shipped in Bulk, HQ 951508 (July 1992).
Here, it is undisputed that the Logic Board and V4 PDP Modules applicable to the entries at issue were included in the same shipment and were listed together in equal numbers on the entry documentation. Def.‘s Facts ¶ 34; Pl.‘s Resp. ¶ 34; see also Pl.‘s Third Supplemental Answer to Def.‘s First Interrog. and Req. for Produc. of Docs. Directed to Pl., Def.‘s Ex. 1, (entry documentation listing V4 PDP Modules and Logic Boards in equal numbers).31 Additionally, there is no dispute that the Logic Board is a part that is to be fitted together with the V4 PDP Module. See Pl.‘s Facts ¶¶ 18-19. Thus, classification turns on whether the Logic Board is attached to the PDP Module with only assembly operations.
Samsung repeatedly describes the process of connecting the V4 Logic Board to the PDP Module as mounting and assembly.32 See Pl.‘s Facts ¶ 18 (quoting Pl.‘s Answer to Def.‘s First Interrogs., Pl.‘s Ex. 4 at 13, ¶ 18) (“In the case of the V4 modules, the V4 Logic Board, which is not included on the PDP Logic Board when shipped from Korea, is assembled and mounted onto the V4 PDP Module in Mexico during this time.“); see also Pl.‘s Answer to Def.‘s First Interrogs., Pl.‘s Ex. 4 at 13, ¶ 19 (“in the case of the V4 PDP Module, the Logic Board is assembled onto the PDP Module after its importation into Mexico“).
Thus, Samsung offers no evidence to suggest other shipments did not include the V4 Logic Boards and PDP Modules together.
Samsung‘s remaining arguments are also unavailing. Samsung supplied only limited evidence relating to the structure and function of the V4 Logic Board. It, therefore, has failed to present evidence that the V4 Logic Board lacks electronics. Regardless, by Samsung‘s own admission, the Logic Board for the V4 Module contains control electronics. Pl.‘s Answers to Def.‘s First Interrogs., Pl.‘s Ex. 4 at ¶ 40 (stating that the MICOM on the V4 Logic Board provides the “control” function).35
Finally, even though the PDP Modules may lack the electronics that eventually designate it for use in a television versus an ADP system, Samsung has not argued that there is an alternative principal use for its PDP Modules. Because headings 8529 (parts used for television and video monitors) and 8471 (ADP systems) are “use” provisions, the principal use of the PDP Modules controls, regardless of whether the products could potentially be used in other systems.
The court concludes that Samsung‘s V4 PDP Module and Logic Board are classified as an unassembled FPSA under subheading 8529.90.53 and are, therefore, not entitled to preferential NAFTA treatment.
CONCLUSION
For the foregoing reasons, the court concludes that the V3 and V4 PDP Modules are flat-panel screen assemblies classified under 8529.90.53, HTSUS. Because the imported goods include a FPSA manufactured outside of a NAFTA territory, the NAFTA Rules of Origin have not been satisfied and the imported goods are not entitled to NAFTA preferential treatment. The court sustains Customs’ denial of Samsung‘s request and application for NAFTA preferential treatment and the denial of the subsequent protests on all entries covered by this case. Plaintiff‘s motion for summary judgment is denied. Defendant‘s motion for summary judgment is granted. Judgment will be entered accordingly.
Notes
General Note 12(t), Chapter 85, No. 92H defines the applicable tariff shift rule as: “A change to tariff items 8528.21.55, 8528.21.60, 8528.21.65 or 8528.21.70 [video monitor] from tariff items 8528.12.05 or 8528.12.10 or any other heading, except from tariff item 8529.90.53.”
These ROO mean that if a component part produced outside of NAFTA that would be classified under any tariff item, except for 8529.90.53, enters into Mexico and is transformed into a finished product that is classified under the listed tariff items, including 8529.12.72 and 8528.21.70, then the finished product is a NAFTA originating item and is eligible for NAFTA preferential treatment, regardless of its inclusion of a non-NAFTA component.
Printed Circuit assemblies
Transceiver assemblies for the apparatus of subheading 8526. 10, other than printed circuit assemblies
parts of television receivers specified in additional U.S. note 10 to this chapter, other than printed circuit assemblies
Combinations of parts specified in additional U.S. note 10 to this chapter Flat panel screen assemblies for the apparatus of subheadings 8528.12.62 ...
Other, parts of printed circuit assemblies, including face plates and lock latches
Other parts of articles of heading 8525 and 8527, except parts of cellular telephones
Other
Of television receivers; ...
Other-8529.90.89
Other-8529.90.99
The television industry agrees that terms, such as ‘controller‘, ‘logic’ and ‘control electronics‘, ‘drive electronics’ are not uniformly used in the industry. These terms are used differently and sometimes interchangeably by different Plasma TV Manufacturers. They are not industry-defined technical terms. They do not represent scientific or technical definitions of the product or industry. In most cases these names and/or labels are used for convenience and certainly not necessarily for the purposes of describing or defining actual functions.
Answers to the Nine Questions ¶ 3.
The IEEE Standard Dictionary of Electrical and Electronics Termscontrolling system 1: (automatic control system without feedback) That portion of the control system that manipulates the controlled system
controlling system 2: (control system feedback) The portion that compares functions of a directly controlled variable and a command and adjusts a manipulated variable as a function of the difference.
Pl.‘s Ex. 20. This definition contradicts Samsung‘s argument that all control systems must have feedback. It is undisputed that the PDP Module does not have feedback, and thus, the second definition is not relevant. The non-feedback definition is consistent with the common definition that control electronics exert control over a device or system.