Applikon Biotechnology, Inc. v. United States

• Decision Date: 12 December 2011
• Docket Number: Slip Op. 11–154.Court No. 07–00364.
• Citation: 807 F.Supp.2d 1323,33 ITRD 2355
• Parties: APPLIKON BIOTECHNOLOGY, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

33 ITRD 2355

807 F.Supp.2d 1323

APPLIKON BIOTECHNOLOGY, INC., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 11–154.Court No. 07–00364.

United States Court of International Trade.

Dec. 12, 2011.

Law Offices of George R. Tuttle, A.P.C. (Carl D. Cammarata), for the plaintiff.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney–In–Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Beverly A. Farrell and Justin R. Miller, Blue Bell, PA), Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection (Michael W. Heydrich), of counsel, for the defendant.

OPINION

MUSGRAVE, Senior Judge:

Plaintiff Applikon Biotechnology, Inc. (“Applikon”) challenges U.S. Customs and Border Protection's (“Customs”) classification of “BioBundle Cell Culture Bioreactor Systems” and “ez-Control Cell Culture BioBundle Bioreactor Systems” imported from the Netherlands (both referred hereafter as the Bioreactor Systems). Proper administrative protest procedure having been undertaken and all liquidated duties, taxes and fees having been paid,¹ see 19 U.S.C. §§ 1514, 1515, jurisdiction is proper pursuant to 28 U.S.C. § 1581(a).

I. Description of the Merchandise

A “bioreactor” is “a device or apparatus in which living organisms and esp [ecially] bacteria synthesize useful substances (as interferon) or break down harmful ones (as in sewage).” Merriam Webster Collegiate Dictionary (10th ed. 1996). As their names imply, Applikon's Bioreactor Systems maintain an aseptic and homogenous environment in which to culture cells. See Def. Ex. F (Autoclavable BioBundle 3L Manual) at 3–4. The homogeneous environment is accomplished by continuous mixing or stirring of the cell culture, and mixing is routinely utilized when operating the Bioreactor System.² The principal function of the Bioreactor is to grow cells in an aseptic, homogeneous environment, and that homogeneous environment is maintained by the mixing function. Pl's Stmt. of Facts ¶¶ 16–17.

The cells are grown in the Bioreactor System for various applications in research or process development, such as for use in biopharmaceuticals, antibodies, enzymes, vaccines, antibiotics, vitamins, food additives, alcoholic beverages, biofuels, for commercial or organic waste treatment, or plant cell technology, all of which are referred to as the “cell culture process.” A typical use is in the development of biopharmaceuticals where the bench-size Bioreactor Systems serve as smaller research and test environments before upscaling for production in larger bioreactors used in production. Pl's Stmt. of Facts ¶ 31.

In their imported condition, both of the Bioreactor Systems consist of three major components. They are the Bioreactor, the Controller, and the Actuator. In the BioBundle System the Controller and Actuator are housed in separate cabinets, and in the ez-Control System they are both housed in one cabinet. In both Bioreactor Systems the principal component, in which the cell culture process occurs, is the bioreactor vessel. This consists of a dish-bottomed glass vessel configured with a stirring mechanism that is integral to sealing the vessel in set-up and the maintenance of the aseptic environment necessary for the cell culture process. The bioreactor stirrer motor and stirrer assembly rest on the bioreactor headplate so that the stirrer assembly shaft and impeller extend into the bioreactor vessel to continuously mix the liquid cell culture at a set rate of agitation to both prevent the cells from settling on the bottom of the bioreactor vessel and to uniformly expose them to the desired environment. Pl's Stmt. of Facts ¶ 18. “[O]nce the vessel is sterilized, the vessel is sealed to maintain the sterile environment, and the stirrer assembly is a critical part of that sealing function.” Pl's Reply to Def's Resp. to Pl's Statement of Material Facts Not in Genuine Dispute (“Pl's Fact Reply”) at 46.

In addition to the bioreactor (consisting of the bioreactor vessel and the mechanical bioreactor mixing equipment), both Bioreactor Systems include equipment used to control mixing and optional functions, such as control of pH, dissolved oxygen, level/anti-foam and temperature. Pl's Stmt. of Facts ¶ 15. These functions are configurable using a combination of eight digital and five analogue outputs, and twelve actuators incorporating various devices (pumps, valves, solenoid valves, motor speed controller, thermal mass flow controllers, rotameters, et cetera ) which maintain the selected parameter set-points. The controller measures the process variables and calculates corresponding controller outputs in order to keep process conditions on set point. The controller's functions are integrated into and complete the Bioreactor System. They are operated by adjusting the controller's setpoints for the desired parameters, switching on the “thermocirculator,” stirrer motor, acid and/or base pumps and gas flow, and when the parameters reach their desired setpoints, the bioreactor is ready for inoculation. See Def. Ex. B (Autoclavable Bioreactor User Manual) at 3–2.

Utilization of the functions for control of pH, dissolved oxygen, or temperature, is optional and dependant on the type of cell culture being grown. However, when utilizing any of these optional functions, the mixing function must still be used in order to effectively control the optional functions. Pl's Stmt. of Facts ¶ 33. Cells will die without mixing operations. Pl's Stmt. of Facts ¶ 35. The continuous mixing or stirring of the liquid cell culture ensures that all cells will have equal access to the contents of the medium in which they are suspended. The mixing of the medium provides the cells with proper exposure to dissolved culture medium components, dilutes harmful cell waste products, and is necessary to effectively control other parameters, such as the pH, dissolved oxygen, or temperature. Pl's Stmt. of Facts ¶ 34.

Mammalian cell culture, for which the Bioreactor Systems are mainly sold, requires a temperature of approximately 37 degrees Celsius ( i.e., human body temperature), which is normally well above ambient room temperature. Pl's Stmt. of Facts ¶ 37, and Def. Response thereto. The merchandise as imported includes temperature control features but does not include the electric heating blanket, which is procured separately in the U.S. by Applikon and packaged with the devices after importation. Pl's Stmt. of Facts ¶ 26. The electric heating blanket is plugged into the actuator, and is not a permanent part of the Bioreactor System. Def's Resp. to Pl's Stmt. of Facts ¶ 38. The heating blanket function is triggered when the medium's temperature drops by as little as 0.1 degree Celsius. Def. Ex. A at 4. The BioBundle literature describes the heating blanket “as an alternative for a thermocirculator” to maintain a desired temperature when wrapped around the bioreactor vessel containing the medium.

“For an optimum performance [ sic ] of any biological system, it is necessary to keep the environment of the micro-organisms at optimal conditions. Apart from temperature and medium composition, the two most important factors that effect [ sic ] this environment are the degree of mixing and aeration[,]” according to Applikon's literature. See Def. Ex. B at 2–1. Optimal temperature can be maintained by placement of the bioreactor vessel in a temperature-controlled room or an external temperature-controlled medium (such as hot water).

It is not the customary practice (although it can be done) for the user to add cold medium to the bioreactor vessel and then use the heating blanket and temperature control to raise the temperature of the medium to the desired set point; the medium is almost always pre-warmed in a water bath or warm room overnight before starting the experiment in the bioreactor and the combination of pre-warmed medium and cells are then added to the bioreactor. Pl's Fact Reply ¶ 39. The Bioreactor Systems are not apparatus that only or principally function to control temperature automatically. Def's Resp. To Pl's Stmt. of Facts ¶ 41. A Bioreactor System is normally only used when the mixing function is required and utilized. Pl's Stmt. of Facts ¶ 46.

II. Applicable Legal Standards

Proper tariff classification is determined by the General Rules of Interpretation (“GRIs”) of the Harmonized Tariff System of the U.S. (“HTSUS”) and the Additional U.S. Rules of Interpretation. Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998). The GRIs are applied in numerical order. BASF Corp. v. United States, 482 F.3d 1324, 1326 (Fed.Cir.2007). It is a question of law requiring ascertainment of proper meaning in relevant tariff provisions and determining whether the merchandise comes within the description of such terms. Pillowtex Corp. v. United States, 171 F.3d 1370, 1373 (Fed.Cir.1999).

Interpretation of the HTSUS begins with the language of the tariff headings and subheadings of the HTSUS and their section and chapter notes, and may also be aided by the Explanatory Notes published by the World Customs Organization. Trumpf, supra, 34 CIT at ––––, 753 F.Supp.2d at 1305 & 1306 n. 20. The chapter and section notes are not optional interpretive rules but statutory law. Libas, Ltd. v. United States, 193 F.3d 1361, 1364 (Fed.Cir.1999).

Both parties move for judgment pursuant to USCIT Rule 56, which is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” USCIT R. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant bears that burden, see, e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970), and a...