Texas Instruments Inc. v. United States, Court No. 80-10-01666.

• Decision Date: 17 April 1981
• Docket Number: Court No. 80-10-01666.
• Citation: 518 F. Supp. 1341,1 CIT 236
• Parties: TEXAS INSTRUMENTS INCORPORATED, Plaintiff, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

518 F. Supp. 1341

1 CIT 236

TEXAS INSTRUMENTS INCORPORATED, Plaintiff, v. The UNITED STATES, Defendant.

Court No. 80-10-01666.

United States Court of International Trade.

April 17, 1981.

Frederick L. Ikenson, Washington, D. C., on the brief and at the oral argument, for plaintiff.

Thomas S. Martin, Acting Asst. Atty. Gen., Washington, D. C., Joseph I. Liebman, Atty. in Charge, International Trade Field Office, Commercial Litigation Branch, New York City (Jerry P. Wiskin, New York City, on the brief and at the oral argument), for defendant.

BOE, Judge:

The merchandise which is the subject of the above-entitled cause of action consists of solid state electronic watch modules and solid state electronic watches entered at Lubbock, Texas in June 1980. Upon liquidation the Director of Customs at Dallas-Fort Worth, Texas classified the solid state electronic watch modules under item 716.18, TSUS (1980), providing Schedule 7, Part 2, Subpart E Watch movements, assembled, without dials or hands, or with dials or hands whether or not assembled thereon * * * * * * * Having no jewels or not over 17 jewels Not adjusted, not self-winding (or if a self-winding device cannot be incorporated therein), and not constructed or designed to operate for a period in excess of 47 hours without rewinding Having no jewels or only 1 jewel * * * * * * * 716.18 Over 0.6 but not over 1.77 inches in width ....... 67¢ each.

The solid state electronic watches were classified under item 715.05, TSUS, providing:

715.05 Watches ...........The column 1 rates applicable to the cases, plus the column 1 rates applicable to the movements, if such cases and movements were imported separately.

The plaintiff, protesting the liquidated classifications, claims the imported merchandise, the solid state modules as well as the solid state watches, are properly classifiable under item 688.45, TSUS (1980) (2nd supp. 3/28/80), providing:

Schedule 6, Part 5 Electrical articles and electrical parts of articles, not specially provided for: Electrical articles using pre-programmed digital integrated circuits to produce sound .................. 688.45 Other ................5.3% ad val.

The solid state modules which are a part of the imported entries consist of a substrate on which are affixed an integrated circuit chip, a capacitor, a quartz crystal and a digital display, more specifically referred to as a liquid crystal display (LCD). Included as a part of the module are certain additional stationary parts such as a clip to contain batteries and electrical connections between the substrate and the digital display.

The solid state electronic watches, comprising the remaining balance of the imported entries, consist of plastic cases into which the solid state electronic modules, aforedescribed, are fitted and retained.

The plaintiff in seeking a determination herein by its motion for summary judgment relies principally upon the prior decisions of this court and the affirming decisions of our appellate court in the cases of United States v. Texas Instruments, Inc., 620 F.2d 269 (Cust. & Pat.App.1980), aff'g. 82 Cust.Ct. 272, 475 F.Supp. 1183 (1979) and United States v. Texas Instruments, Inc., 620 F.2d 272 (1980), aff'g. 82 Cust.Ct. 287, 475 F.Supp. 1193 (1979).

The defendant in its opposition to plaintiff's motion for summary judgment contends that the foregoing decisions are not controlling in the instant action and that genuine triable issues of fact exist herein, thereby precluding the entry of summary judgment.

It is undisputed that the imported merchandise in the instant action is not the same as the imported merchandise which was the subject matter in the prior Texas Instruments decisions, aforecited. In the first Texas Instruments case cited supra, the imported merchandise consisted of an encapsulated integrated circuit without a digital display affixed thereto and without a capacitor or a quartz crystal affixed to the module in the space which had been provided therefor. Notwithstanding the difference with respect to the specific identity of the merchandise in issue existing in the instant case and the prior Texas Instruments decisions, the court is of the opinion that the inclusion of the components (capacitor, quartz crystal and digital display) as a part of the imported solid state electronic module in no manner serves to remove the same from the rationale of the prior determinations of this court and our appellate court.

In the prior Texas Instruments decision 620 F.2d 269, supra, affirming the decision of the trial court our appellate court determined that an integrated circuit, a component of a solid state electronic module, was not classifiable under item 720.75, TSUS (1976), as "other assemblies and subassemblies" for "watch movements." The appellate court found that in accordance with the common and commercial meaning of the term "movement" at the time the Tariff Schedules of the United States were adopted, a "watch movement" as used in the Tariff Schedules of the United States requires a mechanism possessing moving parts to which or from which motion is transferred. The court further found that neither the Tariff Classification Study nor the Congressional Record indicate that solid state electronic modules, having no moving parts, was intended by the Congress to be included within the tariff schedule provisions for "watch movements." The lexicographic and dictionary definitions as well as the testimony adduced, all with respect to the common and commercial meaning of the term "movement" at the time of the enactment of the Tariff Schedules of the United States, satisfied both the trial court as well as the appellate court that "mechanism," "works" or "body of parts" to which or from which motion is transferred is a requisite identifying characteristic of a "watch movement."

The government in an effort to bring itself within the foregoing definition of a "watch movement" again urges that an acknowledged vibration existing within the quartz crystal, a component of the solid state module, constitutes a motion sufficient to satisfy the intended requirement. The trial court as well as the appellate court, without reservation, rejected this contention by the government when urged in the prior Texas Instruments cases, supra. In referring to the quantum or magnitude of the alleged motion within the quartz crystal as roughly one angstrom or one tenbillionth of a meter, our appellate court formerly characterized such motion as "essentially molecular vibration" neither transmitting nor transferring mechanical energy or motion to or from any other part.

Suffice it to say, this court is satisfied that the solid state electronic module, as imported, does not bear an essential resemblance to a "watch movement" as contemplated by the Tariff Schedules of the United States. Davies Turner & Co. v. United States, 45 CCPA 39, C.A.D. 669 (1957).

As our appellate court has stated in United States v. Texas Instruments, Inc., 620 F.2d 269, supra:

The criteria established by the TSUS for classification as a watch movement are: (1) A timepiece movement, (2) less than 1.77 inches wide and 0.5 inch thick. Though the dimensional requirements are met by the imported article, it does not bear an essential resemblance to a timepiece movement because the imported article is not and does not contain a movement.

The remaining balance of the imported merchandise consists of solid state electronic watches in which the solid state electronic modules, as hereinbefore described, are fitted and encased. In contending that these watches are properly classified under item 715.05, TSUS (1980), the government fails to recognize the underlying criteria requisite to the classification of an imported article as a watch under subpart E, part 2 of schedule 7. Headnotes to subpart E provide in part:

Subpart E headnotes:

1. This subpart covers watches and clocks, time switches and other timing apparatus with clock or watch movements, and parts of these articles. * * *.

2. For the purposes of this subpart —

(a) the term "watches" embraces timepieces (including timepieces having special features, such as chronographs, calendar watches, stopwatches, and watches designed for use in skindiving) suitable for wearing or carrying on or about the person, whether or not the movement therein is within the definition of "watch movement" in headnote 2(b), below; (b) the term "watch movement" means a timepiece movement measuring less than 1.77 inches in width and less than 0.50 inch in thickness; * * *.

3. (a) The complete citation for watches covered by item 715.05 and clocks covered by items 715.15 and 715.16 shall be each of such item numbers, followed by the appropriate item numbers for the respective movements and cases comprising such watches or clocks. Emphasis supplied.

From the foregoing it appears implicit that subpart E, in which item 715.05 is included, embraces only watches possessing "watch movements." From the aforequoted headnote 2(a) the term "watches" embraces timepieces—whether the movements therein may or may not fall within the dimensional requirements provided for in the subsequent headnote 2(b). Thus, pursuant to headnote 3(a) the classification of a watch under item 715.05 includes the tariff rate applicable to the case of the watch plus the rate applicable to the movement contained therein in the same manner as if the case and the movement were imported separately. Inasmuch as no enlightenment is provided by the tariff schedules as to what constitutes a movement, except as to its size and association with a "timepiece," it has been necessary for the courts to determine the common meaning and understanding of that term in the horological industry. As this court has previously indicated herein, the solid state electronic module, having no mechanism possessing moving parts from which or to which motion is transferred, was not within...