Opinion
Court No. 74-7-01841.
April 15, 1983.
Fitch, King Caffentzis, New York City (Peter J. Fitch, New York City, at the trial and on briefs), for plaintiff.
J. Paul McGrath, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, New York City, Intern. Trade Field Office, Commercial Litigation Branch (Jerry P. Wiskin, New York City, at the trial and on brief), for defendant.
This action involves merchandise known as "Teaching Typewriters", "Touch to Learn", and "Touch to Match", manufactured in Japan and entered at the port of New York between May 28, 1971 and October 1, 1971.
The pertinent statutory provisions are as follows:
Classified
Schedule 7, Part 5, Subpart E
Subpart E headnotes:
* * * * * *
2. For the purposes of the tariff schedules, a "toy" is any article chiefly used for the amusement of children or adults.
* * * * * * Item Articles Rate of Duty
Toys, and parts of toys, not specifically provided for: * * *
737.90 Other 21% ad val.
Claimed:
Schedule 6, Part 4, Subpart H
678.50 Machines not specially provided for, and parts thereof 6% ad val.Alternatively Claimed:
Schedule 6, Part 5
688.40 Electrical articles and electrical parts of articles, not specifically provided for 6.5% ad val.
The primary issue is whether the merchandise in issue is chiefly used for the education of pre-school children or whether it is used chiefly for the amusement of adults or children and thereby classifiable as a "toy".
At the trial, plaintiff introduced eight exhibits and called one witness. One joint exhibit was introduced by the parties. Defendant called no witnesses nor solely introduced any exhibits.
The following exhibits were introduced in evidence:
Joint Exhibit, Defendant's requests for admissions, and plaintiff's responses thereto.
Plaintiff's Exhibit 1A — An article designated "Teaching Typewriter" (One of the articles at issue).
Plaintiff's Exhibit 1B — A package of pre-programmed cards, used in conjunction with the "Teaching Typewriter".
Plaintiff's Exhibit 2A — An article designated "Touch to Learn" (one of the articles at issue).
Plaintiff's Exhibit 2B — A cassette program used with the "Touch to Learn" article.
Plaintiff's Exhibit 3A — An article identified as "Touch and Match" (one of the articles at issue).
Plaintiff's Exhibit 3B — A series of program cards used with "Touch and Match".
Plaintiff's Exhibit 4 — A list of additional programs available for the "Teaching Typewriter" and for "Touch to Learn".
Plaintiff's Exhibit 5 — A photocopy of the 1971 Childcraft Education Corporation Catalog, "Toys that Teach".
Plaintiff's witness, Mr. Saul Cohen, was at the time of the trial Senior Vice-President of Merchandising for plaintiff corporation. His testimony indicated that he has been employed by plaintiff for twenty eight (28) years. According to the witness, approximately eighty (80) percent of plaintiff's business is generated by sales to schools and other educational systems (R-7).
Mr. Cohen's testimony and actual demonstration indicated that the merchandise known as "Teaching Typewriter" (Exhibit 1A) and the related programmed cards (Exhibit 1B) were designed for educational purposes. According to the witness, the machine functions by introducing a programmed card containing a mathematical, spelling or other educational type problem. The merchandise user then presses one of the typewriter keys that completes a word or answers a mathematical problem. If the user engages the wrong key the programmed card is immobilized and new problems are not presented to the user. If the user selects a correct answer the programmed card advances presenting a new problem. This process is repeated each time the user gives a correct answer.
Subsequently, the witness described and illustrated the "Touch to Learn" merchandise (Exhibit 2A) and its related cassette (Exhibit 2B).
According to the witness, "Touch to Learn" operates in the same manner as the "Teaching Typewriter", except that it uses programmed cassettes (such as those in Exhibit 2B) instead of programmed cards. Basically, when the user engages the machine it presents a problem. If the correct response is made, the cassette automatically moves to the next problem. If the wrong answer is made, the cassette will not present a subsequent problem. The problems on the cassette are in different combinations to teach the child, for example, that two and one equal three, etc. The sequence of problems increases in degree of difficulty as the cassette progresses. The principles behind the "Touch to Learn" and the "Teaching Typewriter" are the same (R. 15-16).
Plaintiff's Exhibit 3A ("Touch and Match") is primarily intended to teach young children reading readiness. Normally a child's awareness starts by identifying objects. Most of the programs for "Touch and Match" are on a very young level, and consist of matching objects, shapes, etc. Programmed cards (such as those in Exhibit 3B) are inserted into the machine thereby presenting the child with a problem to identify what objects or shapes are complementary. When the child gives a correct answer the machine makes a noise and a bulb lights (R. 17-18). Blank program cards are available for teachers, parents and others so that they may insert their own programs for children who may have a particular learning problem.
Mr. Cohen's testimony further indicates that the imported machines could not function without a programmed card or cassette and that the particular programs were progressive in degree of learning difficulty (R. 19-21). Plaintiff sells programmed cards other than those included at the initial purchase for the "Teaching Typewriter" and the "Touch to Learn".
The witness stated that the articles in question were merchandised through a school catalog and through a force of sales representatives who conducted workshops in schools and with teachers to demonstrate the merchandise. Additionally, Childcraft attempted to sell these articles through its stores, a consumer catalog, and by public distribution through retail stores (R. 22-23).
The witness also identified Plaintiff's Exhibit 5 as Childcraft's 1971 Christmas Catalogue, "Toys That Teach", and testified that not all items advertised in the catalog were intended for play or amusement (R. 24). The "Touch to Learn" and "Teaching Typewriter" articles were advertised in the catalog.
The witness testified that he has observed children using the imported merchandise in schools and that the children were enjoying themselves.
In his closing testimony the witness stated that it is necessary to interest or amuse children to a certain extent, if possible, to motivate them to use any article.
A review of the evidence of record, including trial testimony and illustrative samples, indicates that defendant should have judgment in this action.
Plaintiff has failed to demonstrate by the evidence of record that the imported merchandise is chiefly used for educational purposes and not chiefly used for the amusement of children. B. Shackman Company, Inc. v. United States, 67 Cust.Ct. 372, C.D. 4300 (1971); Globemaster Midwest, Inc. v. United States, 67 Cust.Ct. 539, R.D. 11758, 337 F. Supp. 465 (1971). Plaintiff has also failed to overcome the presumption of correctness which favors customs' classification. Atlantic Aluminum Metal Distribution, Inc. v. United States, 47 CCPA 88, C.A.D. 735 (1960); J.E. Bernard Co. v. United States, 81 Cust.Ct. 60, C.D. 4766 (1978).
Under TSUS, a "toy" for the purposes of the tariff schedules is any article chiefly used for the amusement of children or adults (schedule 7, part 5, subpart E, headnote 2 (1971)). Thus, plaintiff's burden is to prove that the chief purpose of the merchandise in issue is not amusement. United States v. New York Merchandise Co., Inc., 58 CCPA 53, C.A.D. 1004, 435 F.2d 1315 (1970). Plaintiff's case ultimately relies upon the theory that the chief utilitarian purpose of the imported merchandise is that of education of children and, that any amusement derived therefrom is merely incidental to its chief use. When amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utilitarian purpose incidental to the amusement. Ideal Toy Corp. v. United States, 78 Cust.Ct. 28, C.D. 4688 (1977).
Plaintiff's only witness at the trial did not have a background as an educator or in educational psychology although he did indicate that he worked with teachers and educational consultants as well as people who are engaged in the field of education of pre-school children. Although it has been held that executives concerned with selling, distributing, ordering and promoting an article have to know the article's chief use and may properly give testimony as to such chief use, Novelty Import Co. v. United States, 60 Cust.Ct. 574, C.D. 3462, 285 F. Supp. 160 (1968); B. Shackman Company, Inc. v. United States, supra, and the uncontradicted testimony of a single, competent, and credible witness may be sufficient to discharge the burden of proof on a chief use issue, Davis Products, Inc. v. United States, 59 Cust.Ct. 226, C.D. 3127 (1967), the court in the present case finds that the testimony of Mr. Cohen is insufficient to rebut the strong presumption that favors the government classification.
While the testimony of the witness indicated that in his belief the main purpose of the merchandise in issue was to teach children he also stated that he had observed children using the merchandise in school and that the children were enjoying themselves. He explained his interpretation of the term enjoyment to be:
. . . Young children, unless they are really new, have ideas, and the environment [sic] around them every day is an adventure and anything at all might be — it the driest subject — an amusement to a child. But, I guess, as we grow older, we begin to be influenced [sic] by things that happen to us, and so maybe we learn to hate mathematics or we learn to — whatever. The fact is that anything mechanical would certainly `amuse' somebody. It moves. Certainly, a young child — Well, there is nothing funny about it, nothing dances and there are no cymbals that are played, no music response. It was not a toy that you could turn into other things. It did simply one thing: it taught or attempted to teach a child a very rudimentary fact or facts for which it was intended, and anything will amuse a child, but I think that is a rather broad definition. (R. 30).
Thus, the witness admitted that the basis of the merchandise was amusement of a young child with the hopeful purpose that the child would learn something while being amused. An article that has some incidental educational value or is used in school does not remove it from the toy category, United States, v. Meier Frank Co., 5 Ct. of Cust.Appl. 208, T.D. 34330 (1914); B. Shackman Co., Inc. v. United States, supra.
Moreover, in toy cases especially, a sample is a potent witness, Wilson's Customs Clearance, Inc. v. United States, 59 Cust.Ct. 36, C.D. 3061 (1967). The court in viewing a demonstration of the merchandise at trial and reviewing the exhibits in chambers is of the solid conclusion that the main effect thereof is the amusement of children and any educational value is merely incidental thereto. Moreover, if plaintiff's position were sustained then almost any toy could be deemed educational in nature as most experiences are new to the young child's receptive mind and he learns by the new experiences.
Exhibit 5 is a copy of plaintiff's 1971 catalog which is entitled "Christmas Catalogue Toys that Teach". The merchandise in issue, "Touch and Match" is listed on page 29 and "Touch to Learn" is listed on page 30. The merchandise "Teaching Typewriter" is not listed in this catalog. A review of this forty seven (47) page catalog indicates that it is essentially a toy catalog the like of which is sent to retail outlets such as Gimbels and F.A.O. Schwarz Co., famous toy stores. Articles listed in this catalog appear to be only for the basic purpose of the amusement of children. The fact that the articles were marketed as toys, while not determinative, is of obvious probative value. Montgomery Ward Co. v. United States, 62 Cust.Ct. 718, C.D. 3853 (1969).
In conclusion, the court in reviewing the testimony given at trial and the samples submitted therein finds that plaintiff has failed to sustain its burden of proving that the defendant's classification is in error and that its own claimed classification is correct. Hawaiian Motor Company v. United States, 82 Cust.Ct. 70, C.D. 4790, 473 F. Supp. 787 (1979), aff'd., 67 CCPA 42, C.A.D. 1241, 617 F.2d 286 (1980); Merry Mary Fabrics, Inc. v. United States, 1 CIT 13 (1980).
Accordingly, the classification of the district director at the port of New York is sustained and the complaint of plaintiff is dismissed.