Slip Op. 06-26 UNITED STATES COURT OF I NTERNATIONAL

TRADE

____________________________________ : OPTREX AMERICA, I

NC., :

: Plaintiff, :

: Befor

e: WALLACH, J udge v. : Court No.: 00-08-00382

: UNI TED STATE S, : : Defend ant. : ____________________________________: [Judgment for Defendant.] Dated: February 27, 2006 Sonnenberg & Anderson , ( Steven Patrick Sonnenberg and Michael Jason Cunningham ) for Plaintiff Optrex America, Inc. Peter D. Keisler , Assistan t Attorne y G eneral ; Barba

ra S. Willia

ms , Attorney-in-Char

ge, Inte rnationa l Trade F ield Off

ice; Amy M. Rubin , Trial Attorney, Commerc ial Litigation Branc h, Civil Division, U.S. Department of Justice ( Amy M. Rubin); and Beth C. Brotman , Office of Assistant Chief Coun sel, I

nternat ional Tra de Li tigation , for De fendant

United Sta

tes. FINDINGS OF FAC T AND CONCLUSIONS OF LAW

FINDINGS OF FAC T 1. The Court has jurisdiction over this action under 28 U.S.C. §1581(a). 2. Plaintiff

, Optrex America, Inc . (“Optr ex”), is the

importer of record for th e entrie s in issue. 3. The administrative protests underly ing this action were timely filed and all liquidated duties and fees on the entries in issue have been paid. 4. The articles in issue were imported from Japan, Germany , China and Taiwan into the United States through the Ports of Detroit, Chicago and Los Angeles in 1998 and 1999. 5. The imported merchandise consists of articles refe rred to generally

as “liquid crystal displays,” “liquid cry

stal devices” or “LCDs.”1 Currently, U.S. Customs and Border Protection. 2 6. The United States Customs Service (“Customs”) 1 liquidated the merchandise under various provisions, including subheading 8531.20.00, and subheading 9013.80.70, Harmonized Tariff Schedule of the United States (“HTSUS”). 7. Followin

g discov ery , Defen

dant, the United Sta

tes (“the Government”) a

mended it s answer to assert counterclaims under subheading 9013.80.70, subheading 9013.80.90, and subhe ading 8 537.10.90 , HTSUS. 8. The L CDs in issue are hig h technol ogy

products that utilize

liquid cry

stals that respond t o an electric fie ld by

twisting along their axes, thereby chang ing thei

r optica l qualitie s. 9. The LCDs in issue enable visual char acter display s, dot matrix displays and/or the display of infor mation thr

ough ic ons. 10. Each imported L CD has an i ndium tin oxide

layer depos ited and p atterne d on the g lass. 11. Optrex pre sented e vidence at trial w ith respe ct to thre e ty

pes of L CDs: L CD panels , LCD modules and subassemblies that include an LCD module. The L CD modules in issue include both graphic display modules and character display modules. 12. All part n

umbers be ginning

with the pr

efix “DMC”

describ e chara

cter disp lay

modules. 13. The first three digits of a base part number beginning with “DMC” indicates the number of char acters and the nu

mber of c haract er lines ( e.g. , DMC-40401NY-LY is a 40 charac ter by 4 line cha

racter display module.)Thus, the

following

part numb ers are

all LCD character

display modules capable of displaying more

than 80 characters at a time: DMC-40401NY-LY, DMC-40457N, DMC-40457N-SEW-B, D MC-40457NYJ-LY-D, DMC-40457NY-LY-B. The abov e five pa

rt numbers are sub

ject to De fendant's firs t alterna tive coun terclai m under 9013.80.70, HTSUS. (Second Amended Answer in Court file.) All of the remainin g char acter d isplay modules in

issue disp lay

80 or fewer char

acters

. 14. All part numbers beginning with the prefix “AM” descr ibe segmented character

display modules. 15. All part n

umbers be ginning

with the pr

efix “DMF ” descr

ibe gra phic displ ay

modules.3

16. All part numbers beginning with the prefixes “FRS,” “F SD,” "FSS,” “FTD,” “FTS,” “GTD,” “NRD,” “

NSD,” “NTD,” “N TX,” “VTD,” “VTS,” and “ WSD” describe L CD panels (sometimes referred to as gla ss sandwiches). All of the part numbers subject to the Government's second alternative counte rclaim are LCD pane ls. 17. In the ir conditi on as impor ted, the L CDs can not display

data or a ccept in put. 18. Some of the imported LCDs are “distribution parts” or a re “sold through distribution,” which mea

ns that the

y a re sold th rough s tocking

reselle rs of Optr ex's prod ucts. The se di st ri bu to rs in cl ud e P io ne er , A po ll o, Di gi ke y, N or ve ll an d S ag er . O pt re x d oe s n ot al wa ys know the u

ltimate c ustomer f or distrib ution par ts. 19. For some of Optrex’s products, according to Allen Houc k, Optrex’s witness, “[a] custom product i n Optrex te

rminolog y is a product that we d

o some des ign, some

modifica tion to another product to fit that customer's end application. So we may have another product that's s imilar tha

t we may be make s ome modifi cations to tailor it d irectly to their application.” 20. Th e d ra wi ng s a nd sp ec if ic at io ns pr od uc ed by O pt re x f or it s LC Ds do no t s pe ci fy a particular end use application. 21. Most of Optrex’s “standard” products were orig inally developed a s custom products for particu lar customers. 22. The “ground-up” custom L CDs in issue that were later sold to other customers are not limited, by design, to a single end use application. FINDIN GS RE: CU STOM LCDs A ND/OR LCD s SOLD TO A SING LE CUSTOMER DURING THE TIME PERIOD IN ISSUE 23. AM-50090H-3-(N) is a characte r display module used in Motorola PCS cell phones. 24. AM-50702HU-T-3 is a character display module with 11 characters of 7 segments ea ch plus icons used in Delco Electronics automotive trip odometers. This module has an alternative (Delco) part number - 16227389. 25. AM-50885HU-LA is a cha racter display

module with 11 characters of 7 segments ea ch plus icons

used in De lco Electronics a utomotive t

rip odome

ters. 26. DMC-16230

NYU-L Y-25 is a 1 6 chara

cter by 2 line cha

racter display module use d in Way ne Sy stems cre dit card

scanner s for ga s pumps. 27. DMC-16249N-SEB is a 16 character by 2 line character display

module used in Federal4

Express ha

ndheld te rminals. 28. DMC-50037N-B-7, DMC-50037N-B-5 and DMC-50037N- B-6 are 40 characte r by 2 line charac ter displa y mo dules use d in Avay

a/Lu cent desktop phone s. 29. DMC-50042-1 is a 16 character by 1 line character display

module containing printed circuit c ontacts u sed in Da ta South dot

matrix or in

k jet print ers. The printed c ircuit contact s are use d to contr ol certa in printer function s. 30. DMC-50461 is a 20 character by 4 line character display

module with three indicator light emitting diodes and printed circuit contacts used in L exmark laser printers. The printed circuit c ontacts a

re used t o control certain printer f unctions. 31. DM C- 50 77 7N -A AE , D MC -5 07 77 N- B, an d D MC -5 07 77 N- B- F4 0 a re 16 ch ar ac te r b y 2 line character display

modules containing printed circuit contacts used in L exmark laser printers . The prin

ted circ uit conta cts are used to control ce

rtain pri nter functions. 32. Allen Houck testified that Part N os. DMC-50 461, DMC-5 0777N-AAE, D MC-50777N -B, DMC-50777N-B-F40 and DMC-50042-1 are substantially similar to the articles described in NY Ruling NY 816263. 33. Although the firmware on a particular pr inter which incorporates Optrex LCDs ca n be changed or upgra

ded, it would be changed or upgr aded by a n engineer or the manufacturer. I

n addition, with respect to the printers about which Optrex presented testimony, printing a test pag e executes a fixed program that already resides in the printer. In other word s, in printi

ng a tes t page, the user

is select ing a fu nction tha t is alrea dy b uilt in to the printer. 34. DMC-50293 H-LA is an 8 cha

racter by 2line cha

racter display module use d in Motoro la PCS mobile phones. 35. DMC-50387NYL-L Y-B is a 20 character by

2 line character display

module with a micro-c ontroller

on board used in I BM point o f sale dis

play s. 36. DMC-50513 N-LY -B-1-F 40 is a 24 c haract er by 2 line cha

racter display module use d in Avay a desktop phones. 37. DMC-50553NJL-SLY-10 a nd DMC-50553NJL-SLY-11 a re 12 character by

4 line charac ter displa y mo dules with

icons use d in Motoro la Id en cell phones. 38. DMC-50593NFJ-SLY-2 is a 12 charac ter by 3 line cha

racter display

module with icons used in a Lucent cell phone.5

39. DMC-50684NJ-SLY-3 is a 12 character by 2 line chara

cter display module with icons used in Mot

orola PCS c ell phone s. 40. DMC-50739 -FW-1 is a 40 chara cter by 2 line cha

racter display module wit

h icons use d in Xerox copiers

. 41. DMC-50799

NYU-SL Y-B is a 16 chara cter by 4 line cha

racter display module wit

h printed c ircuit co

ntacts us ed in Compa

q file ser vers. 42. DMC-50799NYU-SLY-B- COM is a subassembly used in a Compaq file ser ver that incorporates character display module DMC-50799NYU-SLY-B a nd contains printed circuit c ontacts a

nd a rubb er key

pad with p opple dome

switches . The popp le dome switches are not used to control the server or input information to the serve r. 43. DMC-50877

NY-B is a

20 chara cter by 2 line cha

racter display module wit

h a built in microcontroller containing firmware used in NCR point of sale ter minals. The user of the point of sale terminal cannot change or a mend the functions of that device and any change to the firmware would ty pically be made

by NCR. 44. DMC-50922NFJ-SLY-2 is a 12 charac ter by 4 line cha

racter display

module with icons used in Qu

alcomm ce ll phones. 45. DMC-50968 N-B-1- F38 is a 1 6 chara cter by 2 line cha

racter display module use d in Avay a desktop phones. 46. DMC-50980NFJL-SLY is a 12 character by

4 line character display

module with icons and popple dome switches used in Motorola Ide n cell phones. The popple dome switches control the mode an

d menu sel ections. 47. DMC-51039NFJ-SLY is a 12 characte r by 4 line char

acter display

module with icons used in Qu

alcom ce ll phones. 48. DMF-500 20NFU- FW is a 240 by 12 8 pixel gr aphic dis play module wit

h printed circuit contact s used in Pit

ney Bowes sc ales. 49. DMF-50020NFU-FW-1 is a subassembly containing module DMF-50020NFU-FW as well as a rubber k ey pad with c arbon pil ls used in Pi tney Bowes sc ales. 50. DMF-50073NF-FW is a graphic display module supplied with an attached touch screen used in a Xerox document center. This part is subject to Defendant' s third alternative counterclaim under 8537.10.90. 51. DMF-500 82NY-SEW is a 320 x 40 pixel

graph ic display module use d in SPX6

Corpora tion hand held testin

g monitors. 52. DMF-50088NBU-FW is a 640 x 200 pixel graphic display module used in Micros Syst ems resta urant poi nt of sale terminal s. 53. DMF-50190N is a 128 x 64 pixel graphic display module use d in Fisher Rosemont/E

merson f low meters. 54. DMF-50246NB-FW-3 is a 352 x 35 pixel graphic display module used in IPC/Global Crossing s stock ma

rket turr ets. 55. DMF-502 47NB-F W is a 640 x 480 p ixel gra phic displ ay

module use d in Micro s Sys tems restaur ant point o f sale te

rminals. 56. DMF-502 60NFU- FW-23 is a 640 x 480 pixel g

raphic d isplay module use d in Hewle

tt Packard medical equipment such as heart monitors. Hewlett Packa rd may have

allowed Optrex to show and sell the same display to other c ustomers, including Datascope. 57. DMF-502 60NFU- FW-31 is a 640 x 480 pixel g

raphic d isplay module use d in Hewle

tt Packard /Agilen t medical equipmen

t such as heart mon

itors. 58. DMF-502 60NF-F W-32 is a 64 0 x 480 pixel g raphic d isplay module use d in Hewle

tt Packard medical e quipment s

uch as he art monitors. 59. There is nothing in the design of the L CDs that are used in Hewlett Packard medical monitors that limits the

LCDs f rom being

used only

in those e

nd use ap plication s. 60. DMF-50331N-SLY is a 105 x 64 pixel graphic display module used by Primus in GTE airplane telephones. 61. DMF-50375N-SEW is a 120 x 64 pixel graphic display module used in Sy mbol Technol ogies ha

nd held inv entory

scanner s. 62. DMF-50386N-SLY is a 105 x 64 pixel graphic display module used in Primus airplane telephones. 63. DMF-505 21NBU- FW is a 240 x 64 pixel gra phic displ ay

module use d in Way

ne Sy stems credit c ard sca

nners on gas pumps. 64. DMF-50531NF-FW is a 320 x 240 pixel graphic display module used by Crestron Electronics in a to

uch scre en terminal for its Smart Touc

h radio f requenc y wireless control system. This module is not imported with a touch scree n.7

65. DMF-505 62NFU- FW is a 640 x 32 0 pixel gr aphic dis play module use d in Hewle

tt Packard /Philips/Agilent medi cal monitoring eq uipment. 66. DMF-50573NB-FW is a 480 x 80 pixel graphic display module used in IPC/Global Crossing s stock ma

rket turr ets. 67. DMF-50646NFJ-SLY-1 is a 96 x 32 pixels graphic display module with icons, printed circuit c ontacts a

nd a hall e ffect se

nsor used in Motorola

PCS cell phones. 68. DMF-50656NY-T is a graphic display module with two 119 x 16 pixel sections plus icons used in a Motorola pager. 69. DMF-507 72NCWJU-FW is a 240 x 128 pixel color g raphic d isplay module use d in Garmin I nternat ional avi ation GPS de

vices. 70. DMF-50796H-LAR is a 45 x 28 pixel graphic display module used in Delco Electronics automotive

messag e cente

rs. 71. DMF-50824N-SLY and DMF -50824N-SLY-2 are 240 x 128 pixel graphic display modules us ed in Hew

lett Pack ard exter nal defi brillators. Allen H ouck was unable to identify the diffe rences betwee n these two modules. 72. DMF-508 31NJ is a 265 x 65 pixel gr aphic dis play module wit

h printed circuit c ontacts used in Square D re

mote powe

r switchi ng systems. 73. DMF-508 86NF-F W is a 640 x 200 p ixel gra phic displ ay

module use d in Psion Te klogix vehicle mount term

inals. 74. DMF-50897NFJ-SEB is a 192 x 272 pixel graphic display module containing a touch screen used in Motorola PCS cell phones. Any module with the base number 50897 would contain a touch screen. 75. DMF-50988NF-SLY is a 128 x 32 pixel graphic display module used in Sims Deltec infusion p

umps. 76. DMF-509 95N-1 is a 240 x 112 pixel g

raphic d isplay module wit

h printed circuit c ontacts used in Avaya Communications business telephone s. The design of the LCDs that a re used in Avaya te lephones does not limit their use only to that end use. 77. DMF-50998NFJL-SL Y-1 and DMF-50998NFJL-SL Y-3 are 96 x 48 pixel graphic display modules wi

th icons us ed in Motor

ola I den cell

phones. 78. DMF-51070NFJ-SLY and DMF- 51070NFJ-SLY-AC are 96 x 32 pixel graphic display8

modules with icons, a hall effect sensor and either popple dome switche s or printed circuit contacts used in Motorola PCS cell phones. The popple dome switches and printed circuit contacts would be under the key pad and would control the operations of the cell phone. 79. DMF-51097NFJL-SL Y DMF-51097NFJL-L

Y-AC, and DMF-51097NFJL-SL Y-AD are 96 x 48 pixel g

raphic d isplay modules wi

th icons us ed in Motor

ola I den cell

phones. 80. F-51159NYJ-SEW-AA is a 120 x 64 pixel graphic display module used in Sy mbol Technol ogies ha

nd-held s canners. 81. FRD-115 55AAH is a n LCD p anel with

9 seven- segmen

t chara cters plu s icons use d in Land is & Gy r/Siemens test equipment. 82. FRD-14181ABH-CD is an L CD panel with 3 fourteen-segment characters, 6 sevensegmen t chara cters a nd icons us ed in L andis & G yr /Siemens v oltage

measurin g meters. 83. FRS-10813AB and FRS-10813AB-CD are L CD panels with 5 seven-segment charac ters used by Red L ion Control s. 84. FRS-1228 0AC-CD is a n LCD p anel with

7 seven- segmen

t chara cters a nd icons us ed in NCR scale s. 85. FRS-13810AAPH-CD is an LCD panel with 3 seven-se gment characters and icons used in Johnson Con

trols temp eratur

e-humidit y se nsing ins trumenta

tion produ

cts. 86. FSD-15130AAPH-CU is an LCD panel with 8 four teen-segment characte

rs and icons used in Ma

tsushita Co mmunicati ons car a udio systems. 87. FSD-15205AAF-CDA is an L CD panel with an attached flex cable, 8 seven-seg ment charac ters on 2 l ines (tota

l of 16 sev en-seg

ment cha racters) and ic ons used in Infi nity Informatica

Inc . cell phones. 88. FSD-15740AAH-CU is an LCD pane l with 3 seven-segment characters, 1 two-segment character and icons used in L owrance digital depth monitors. 89. FSD-16455AGPH-CU is an LCD panel with 10 seve n-segment characters a

nd icons used in Visteon trip odom eters. This panel has an al ternate (Vis teon) part nu mber - F8FF10D922AB. 90. FTD-11 501AGFH and FTD -11501AC FH are differe nt revision levels o f the same LCD panel that has 4 seven-segment char acters and icons and they

are used in Visteon Corporation automotive message centers. This panel has a n alternate (Visteon) part9

number - F6RF-1 0D922-BB. 91. FTD-12613ABH-CU is an L CD panel with 8 fourteen-segment char acters and icons used in Visteon car audio systems. T his panel h as an alternat e (Visteon) p art number - F5R F18B955B C. 92. FTD-13069AAPH-CU is an LCD pane l with 4 seven-segment characters and icons used in Matsush

ita Communic ations ca

r audio sy stems 93. FTD-13180AGH is an LCD pa nel used in Visteon automotive audio systems. This panel has an al ternate (Visteon ) part nu mber - 95 GP-18B5 5-AC. 94. FTD-13201AEFH-CUA is an L CD panel with 10 seven-segment charac ters, icons, and a transflective color filter used in Visteon odometer/messag e centers. This panel has an alternate (Vi steon) part n umber - F5RF-10 D922-AB. 95. FTD-13366ABPH-CU is an L CD panel with 3 seven-segment charac ters, 1 two-segment character and icons used in Delco c ar audio systems. This pane l has an alternate (Delco) part number - 16197564. 96. FTD-14021ACPH-CU is an LCD panel with 4 seve n-segment characters, 1 two- segment character and icons used in Matsushita Communications/Panasonic car audio sy stems. 97. FTD-14171ABPH-CU is an L CD panel with 4 seven-segment charac ters, 1 two-segment character and icons used in Delco c ar audio systems. This pane l has an alternate (Delco) part number - 16210571. 98. FTD-15 286AAPH is an LC D panel w

ith 3 seve n-segment char

acters and icons

used in Delco automotive message centers. This par t has an alternate (Delco) part number - 16235274. 99. FTD-15491AAPH-CU is an LCD pane l with 4 seven-segment characters, 1 two-segment charac ter and i cons used

in Panason

ic car a udio systems. 100. FTD-15664 is an LCD panel with 9 cha racters of vary

ing numbers of segments plus icons used in Delco car audio systems. This panel has an alternate (Delco) par t number - 16232895. 101. FTD-15 979ABP H is an LCD pane l wit h icon s used in Vi steon autom otiv e mess age centers. Thi s part has an al ternate (Vis teon) part nu mber - 98BP-10 D922-BB 102. FTD-16420ACD-CD is an LCD pane l with a graphic area of 80 x 7 pixels, 4 sevensegmen t chara cters a nd icons us ed in Motor

ola pag ers.10

103. FTD-16 455AAPH is an LC D panel w

ith 10 seve

n-segment char

acters and icons

used in Visteon automotive trip odometers. This panel has an alternate (Visteon) par t number - F8FF-10D922-AA. 104. FTD-16766ABPH is an LCD pa nel with 6 seven-segment characters, icons and a color filter used in Visteon automotive trip odometers. This panel has an alternate (Visteon) part number - F8FF-10D922-B D. 105. FTD-17029AAPH is an LCD pane l with 10 seven-segment characters and a color filter used in a V

isteon/F ord Electronics c ombination automotive

clock an d odomete

r. This panel has an alternate (Visteon) part number - 98-BP-10D922-AC. 106. FTS-10813AA is an LCD panel with 5 seve n-segment characters use d by Red L ion Controls. 107. GMF-51048NFJ is an graphic display module used in the Home Wireless Networks portable telephone handse

t portion o f a house

wireles s network

sys tem. 108. GMF-510 76N-S is a n 95 x 7 pixel ch

ip on gla ss graphic displa y mo dule with a

flexible cable a nd icons us ed in Amer

ican Tel ecom pag ers. 109. IM-50888NF and I M-50888NF-1 are charac ter display modules with 12 fourtee n-segment charac ters use d in Hewle

tt Packar d/Agile nt measur ement an d test equ ipment. 110. NSD-1276 6AAD-CL is a 320 x 200 p ixel LCD panel use d in Lowrance

Electronics fish finders. Nothing in the design of the L CDs used only in L owrance fish finders limits the LCDs to that end use application. 111. NSD-14379AA is a 64x128 pixel graphic LCD glass pane l with icons used in Telxon Corpora tion hand held inven

tory scanner s. 112. NSD-15129AAD-CL is a 160 x 160 pixel LCD panel used in a Lowrance Elec

tronics handheld marine global positioning system (“GPS”) navigational device. 113. NSD-15319AB is an LCD panel that wa s sold to Ultratec, Inc. for TTY cellular telephones. 114. NSD-15334AAD-CL is a 65 x 100 pixel LCD panel used in a Lowrance Elec

tronics handheld GPS navigational device. 115. NSD-1592 0AAD-CL and NSD- 15920AB D-CL are 160 x 16 0 pixel L CD panels used in Lowr ance fi sh finders.11

116. NSD-1592 1ABD-CL is a 240 x 240 p ixel LCD panel use d in Lowrance

fish finde

rs. 117. NSD-16595AED-CL is a 160 x 160 pixel LCD panel used in a G armin fish finder. Nothing in the des ign of the LCD s used only in Garmin

fish finde

rs limits the

LCDs t o that end use application. 118. NSD-1659 8AAD is a 64 x 128 pixel LCD panel u sed in L owranc e fish fin ders. 119. NSD-1685 3AAD-CL is a 104 x160 p ixel LCD panel use d in Lowrance

handheld GPS navigational devices. 120. NSD-1694 8ACD-CL is a 240 x 240 p ixel LCD panel use d in Garmi

n fish find

ers. 121. NSD-17010ABD-CD is an LCD pane l with 60 x 28 pixels configured into 12 character x 4 lines plu s icons use d in Metro Electronics cel l phones. 122. NSD-1702 4ABD-CL is a 320 x 200 p ixel LCD panel use d in Lowrance

fish finde

rs. 123. NSD-1740 3ABD-CL is a 64 x 128 pi

xel LCDpanel use d in Tech sonic fish finders

. 124. NSD-7399CXD-CD is a 128 x 112 pixel LCD panel used in Ametek construction machine ry informat ion cente rs. 125. NSD-7551 and NSD-7551AGD-CD are 128 x 128 pixel LCD panels used in Telxon micropro cessor- driven ha nd held inv entory

terminal s. 126. NTD-13787AXD-CL is an LCD panel with two 119 x 16 pixel graphic display are as and icons use d in Motoro la page rs. 127. NTD-15504AEHD-PCU is a 240 x 80 pixel LCD panel used in Garmin aviation transpon ders. 128. NTD-162 10AB is a n LCD p anel with

two 119 x 16 pi

xel graphic displa

y a reas, hologra phic filte rs and ic ons used in

Motorola pagers. 129. NTX-15505AGH-QCD and NTD-15504AEHD-PCU ar e LCD panels which are individua l cells of a double s

uper twis ted nema

tic displa y us ed in Gar

min aviati on GPS devices. NTX-15505AGH-QCD is a “dummy ” cell and NTD-15504AEHD-PCU is an “active ” cell. 130. VTS-8 A80BGF HJ-C U is an LCD pane l wit h icon s used in Vi steon autom otiv e mess age centers. This panel has an alternate (Visteon) part number - F0OF-10D922-AA.12

131. WSD-14219AIPH-CU is an L CD panel with 6 seven-segment charac ters and icons used in Yazaki a

utomotive t

rip odometers. 132. WSD-14282BGPH-CU is an LCD panel with 6 seven-se gment characters and icons used in Denso Tennessee automotive trip odometers. This panel has an alterna te (Denso) part number - TN461000-1280. 133. WSD-14282B APH is an LCD panel w ith 6 seve n-segment char

acters and icons

used in Nippon Denso Tennessee automotive trip odometers. This part is a differe nt revision level with a minor design change fr om WSD-14282BGPH-CU. This panel has an alternate (Denso) part number - TN461000- 1190. 134. WSD-15550ABPH-CU is an LCD panel with 6 seven-se gment characters and icons used in Americ an Yazak

i automotiv e trip odo meters. 135. WSD-16071AAPH-CU is an LCD panel with icons used in Nippon Denso automotive thermometers. This panel has an alternate (Nippon De nso) part number - TN 461000- 1450. 136. WSD-16770ACPZ-CD is an LCD panel with 6 seven-seg ment characters used in Delco Electronics odometers for Harley Davidson. This panel has an alternate (Delco) pa rt number - 16242996. 137. WSD-17304A CPZD is a n LCD p anel with

11 dot matr

ix characters and

icons use d in Delphi au tomotive a

udio equipment. 138. DMC-24227N-B-24-F38, DMC-24227N-B-24- F38(I) and DMC-24227N -B-24-T are 24 character by

2 line character display

modules. Although these particular modules are used in Avaya de sktop telephones, all of the “24227” modules are very similar. 139. DMF-50036NF-FW is a 640 x 200 pixel graphic display module sold to Spectra Electronics, whic

h repairs test equ

ipment. 140. DMF-50036NF-FW-4 is a 640 x 200 pixel graphic display . Although no customers appeared on the shipped order detail for this par t in plaintiff's Exhibit 1, Allen Houck testified that, to his knowledge, it was only sold to Toledo Scale, a company that makes scales. However, the base part, 50036, is sold throug h distribution. Also, the “dash-4” suffix indicates the addition of a Mitsumi connector, but such an addition would not cause this module to be dedicated for use in a scale. 141. DMF-50036NFU-FW-4 is a 640 x 200 pixel graphic display module sold to Toledo Scales. T he “-4” version i s “essen

tially the same as the ba se part n

umber exc ept it has a13

different type

connector.” 142. DMF-5005NYJ-SLY-28 is a 240 x 64 pixel graphic display module. This module was sold through distribution and was used by Daniel Instruments for an industrial applica tion. Alle

n Houck te stified that he did n ot know if t

his module

was sold only

to Daniel I nstrumen ts. 143. DMF-50260NY-SFW is a 640 x 480 pixel graphic display module. This module was so ld to Ap ol lo Di sp la y wh ic h t he n s ol d i t t o E li te En tr y Ph on e C om pa ny. FINDINGS RE: LCDs ORIGINALLY DEVELOPED FOR A PARTICULAR CUSTOMER IDENTIFIED AT TRIAL BUT ULTIMATELY SOLD TO OTHERS 144. DMC-50070N-B-2 is a character display module. Although it was a custom module used in Avay a/Lu cent desktop phone s, it was a lso sold to G eneral

Dy namics. 145. DMF-5005NF-SEW is a 240 x 64 pixel graphic display module. A lthough the original customer for this module was Datascope, which is a medical monitoring equipment company, it is sold through distribution. 146. DMF-502 60NF-F W-15 is a 64 0 x 480 pixel g raphic d isplay module. Although t

his module wa s designed in conj unction with Hewle tt Packar d (“HP”) , it would not work in HP's medical monitors and was eventually sold to many other customers. 147. DMF-50834NFJ-SEB is a 119 x 73 pixel graphic display module. Although the original design of this module was created for Sy mbol Technologies, it was also sold to Hand Held Products. These modules are used in hand held inventory scanners. 148. DMF-651ANB-FW-14 is a 640 x 200 pixel graphic display module. The original customer for this part was Datascope, which make s medical monitoring equipment. Allen Houck testified that there were some distribution parts in the “DMF- 651 series” but did not know

whether the “dash-14” ve

rsion was one of the

m. 149. DMF-50174NFL- SFW-11 is a 320 x 240 pixel transflexive graphic display module. Although this module was originally intended to be used in Garmin GPS devices, it has been sold to several customers as well as through distribution and could be use d for multiple applications. All of the modules with part numbers containing “50174” are “basically the sa

me” and the differences with the modules discussed at trial involved suc h characteristics as the cable leng th and the background color. FINDIN GS RE: LCD s THAT ARE SOLDTHROUGH D ISTRIBUTION AND/OR TO MULTIPLE CUSTOMERS14

150. DMF-50 840NB- FW-AK is a 32 0 x 24 0 graph ic dis play modu le tha t was s old t hrough distribution to Pioneer Standard which, in turn, sold it to a company ca lled Checkmate. Checkmate makes credit card rea der terminals. This module has a black bezel which was added at Checkmate's request. Allen Houc k does not know whether Pioneer Standard sold this module to customers other than Checkmate but he did state that it is not limited by d esign f or use onl y in a touch sc

reen te rminal. 151. DMF-508 40NB-F W is essenti ally identica l to DMF-5 0840NB- FW-AK exc ept that th is module has a silver bezel. This module is sold to multiple customers, including Check mate a nd Aut otot e. Acco rding t o All en Hou ck, “Au toto te's pr oduct is, i n a way, it 's a POS system. They

do -- they do the - - not the gambling machines themselves, but they do the register sy stem where somebody's going to go trade in their chips or they ar

e the gambling machines at the horse trac ks, those types of products a re what they

do.” 152. DMF-502 62NF-F W-ME is a 64 0 x 400 pixel g raphic d isplay module. Although t

his module wa s co-dev eloped with Marquette Ele ctronic s for med ical monit

ors, it wa s sold to Marquet te throug h a distrib utor, Pione er Standa

rd. Ther e is nothin

g about the spec ific design t hat limits th

is module to

being u sed only

in medica

l monitors. 153. DMC-24227

N-SEW-B- 11 is a 24 c

haract ers by 2 line cha

racter display module sol d through distributi on. Althou

gh this mo dule may

be used in

Luce nt busines s telephones, it has no physical cha

racteristics that would commit it to that use and may be used in other applica tions. 154. DMC-2 4227N -B is a 2 4 chara cters by 2 line c haract er dis play modu le sol d thro ugh distribution. 155. DMC-50747NF is a 16 character by 2 line character display

module with a mounted controlle r chip sol d throug

h distribut

ion to multip le custome

rs. 156. DMF-500 1NF, DMF -5001NY -LY a nd DMF-5 003NB- FW are 16 0 x128 pixel g raphic display modules sold through distribution. 157. DMF-50 036NF U-FW i s a 640 x 200 pix el graph ic dis play modu le sol d thro ugh distribution to multiple customers. One of the customers is Remanco, which uses the module for a resta

urant poi nt of sale (POS) ter

minal. Ac cording

to Allen H ouck, “s ome so rt of mi cr op ro ce ss or ” w ou ld be re qu ir ed to op er at e t hi s d is pl ay. 158. DMF-500 36ZNB U-FW is a 6 40 x 200 pixel g raphic d isplay module tha

t was sold t

o Nautilus, which makes exercise equipment, and also sold through distribution. 159. DMF-50 036ZNFU -FW is a 640 x 200 pi xel gr aphic disp lay modul e sold throu gh distributi on. One of

the appli cations is

Drason- Stadler c linical a udiomete rs.15

160. DMF-500 5N-EW is a 2 40 x 64 pixel g raphic d isplay module use d by

Agilen t/Hewlet t Packard for medical monitors and also sold through distribution. 161. DMF-5005N is a 240 x 64 pixel graphic display module sold throug h distribution to a very large number of

customers. 162. DMF-5005NYJ-LY is a 240 x 64 pixel graphic display module sold through distribution. One customer, Daniel industries, used it for a fuel measure ment device but it could be used in other appli cations. 163. DMF-5005NY-LY is a 240 x 64 pixel graphic display module sold through distribution. 164. DMF-50081ZNB-FW and DMF -50081ZNB-FW-12 are 320 x 240 pixel graphic display modules so ld throug

h distribut

ion to multip le custome

rs. 165. DMF-50 081ZNF- FW is a 320 x 240 pi xel gr aphic disp lay modul e sold throu gh distributi on to multipl e custome rs. 166. DMF-5010NB-FW and DMF-5010NB U-FW are 240 x 64 pixel graphic display modules sold throu

gh distr ibution. One of the c

ustomers f

or DMF- 5010NB- FW is Novometrics, which use s them for

medical m

onitoring equipmen

t. The only

differe nce between thes e modules is the viewing angle. 167. DMF-50174ZNB-FW is a 320 x 240 pixel transmissive graphic display module that was sold to Tri ton S ystems fo r use i n an in dust rial c ontro ller a ppli catio n as wel l as th rough distribution. 168. DMF-50 174ZNF- FW is a 320 x 240 pi xel gr aphic disp lay modul e sold prima rily thro ugh distribution. 169. DMF-50260NY-SFW is a 640 x 480 pixel graphic display module. Although one of Optrex' s custome

rs for thi s module is D elphi Engineerin g, it is a lso sold by

Apollo Display , which is a

distributor. Allen H ouck.did not know to

whom Apoll o Display

sold this module and was not certain of the Delphi Engineering application. However, according to Mr. Houck, this ty pe of a display would be used with “microprocessor-based products.” 170. DMF-503 16NF-F W-1 is a 240 x 64 pixel gr

aphic dis play module sol d to Apollo Displays, a distributor. 171. DMF-503 83NF-F W is a 640 x 480 p ixel gra phic displ ay

module sol d to sever

al speci fic customers as well a s throug h distribut

ion for mu

ltiple use s.16

172. DMF-50 426NY J-S LY is a 12 8 x 32 pix el graph ic dis play modu le sol d thro ugh distribution. 173. DMF-50 773NF -FW is a 240 x 128 pi xel gr aphic disp lay modul e sold throu gh distribution. 174. DMF-50840NF-FW-3 is a 320 x 240 graphic display module that is imported with a touch scr een. Alth ough it w as orig inally

develope d for use

in a rec eptionist' s telephone, it is a distribution part and could be used in other ty pes of devices. This module is subject to defendant's third alternative counterc laim. 175. DMF-50840NF-FW is a 320 x 240 graphic display module sold to Space Labs, Burdick and also t hrough distributi on to other

customers. The ap

plication s for whic

h this module is used inc lude ele ctrical

chemica l analy sis multimet

ers and e lectroc ardiog

raph mac hines. 176. DMF-50840NFL- SFW is a 320 x 240 graphic display module sold to severa l customers including Garmin, T echsonic , I-C on, and a lso sold thr

ough dis tribution. Althoug h this module is u sed in GPS de vices, it may

be used in

others a s well. 177. DMF-508 87NCJU-FW- 1 is a 256 x 64 f ull color g

raphic d isplay module. Although i

t was originally

designed for an automotive message center application, it is sold to various customers, includi

ng distr ibutors. 178. DMF-50 961NF -FW is a 640 x 480 pi xel gr aphic disp lay modul e sold throu gh distribution. 179. DMF-612NF-FW-9 is a 480 x 64 pixel graphic display module sold through distribution. Although Allen Houck testified that it is used by Amtote International, which makes gambling totalizer machines, he stated that it is possible that it is also sold by the distributor to other

end customers. 180. DMF-660NK-EW is a 240 x 128 pixel graphic LCD display module sold to Datascope for medical monitoring equipment and also through distribution, possibly for applications other tha n medica l equipme nt. 181. Although Optrex Part Nos. DMC-20434 and DMC-20434N-B are identified in Volume 2 of plaintiff's Exhibit 1 and Part Nos. DMC-20434HE, DMC-20481NY-LY, DMC-2 0481N Y-LY-B and DMF-68 2ANF-E W are i denti fied i n Volu me 9 of Plai ntiff 's Exhibit 1, Op trex had a

bandone d any

claims wit

h respec t to these p art numbe

rs prior t o trial.17

182. Prior to trial, Optrex agreed to abandon its claims with respect to the following part numbers: C-5 114 8NU -SL

Y-A A, C BL 500 73B -UNIT , CCT -50 081 UNI T-S 1, C MF- 510 48N

FJ, COB-50796-C, COV-50739A, DMC-16105NY-L Y, DMC-16106C, DMC-16117AN , DMC-16128NY-LY, DMC-16129, DMC-16129H, DMC-16129N-B , DMC-16129U, DMC-16188NY-LY, DMC-16202N-L Y-B, DMC-16202N-LY- D, DMC-16202NYJ-LY-D, DMC-16202NY-L Y, DMC-16202NY-LY1, DMC-16203NJ-D, DMC-16204N-LR-B, DMC-16205NY- LY, DMC-16207, DMC-16207N, DMC-16207N-B, DMC-16207N-EB, DMC-16230, DMC-16230H, DMC-16230N, DMC-16230NU-EB, DMC-16230NYJ-LY-D, D MC-16230NY-LY, DMC-16230NY-LY-B, D MC-16230NYU-LY, DMC-16433, DMC-16433H, DMC-16433 N, DMC-164 33N-SEW-B, DMC-20171 , DMC-2020 3NY-LY-B, DMC-20215A, DMC-20261ANY-LY-B , DMC-20261NYJ-LY-D, DMC-20261NY-L Y, DMC-20434 , DMC-2043 4HE, DMC-20 434N, DMC- 20434N-B, DMC-20481 NYJ-LY-D, DMC-2 0481NY-LY, DMC-2 0481NY-LY-B, DMC-20481 NY-SLY-B-5, DMC-20 481NYU-LY-B, DMC-2 074NY-LY-B, DMC-40202 NY-LY-B, DMC-40218 N-B, DMC-402 18N-SEW-B, DMC-40267NB-LY-B -8, DMC-40267NY-LY, DMC-40267NY- SLY-B, DMC-40401NY-LY, DMC-40457N, DMC-40457N-SEW-B, D MC-40457NYJ-LY-D, DMC-40457NY-LY-B, D MC-50218, DMC-50218N-B, DMC-50292NYJ-LY-D-1, DMC-50292 NY-LY-B, DMC-50448 N, DMC-504 54NJ-SLY, DMC -50603NY-S LY-B, DMC-50697NFU-SLY-1, DMC-50697NFU-SLY-2, DMC-50787N, DMC-50995N-1, DMC-5 1008N

FJ-SL A, DM C-510 99N, DMF- 50248 N-SE W, DMF -503 75N- SFW, DMF-503 83NG-F W, DMF-50 427NYJ-SL Y, DMF- 5064NFJ-SL

Y-1, DMF -50796-L

AR, DMF-50893NYJL-SL

Y, DMF-50980NFJL-SL

Y, DMF-51026NYU-L

Y, DMF- 51120 GNFJ- AA, D MF-6 05NY -SEB -2, D MF-6 104N B-EW , DMF -610 4NB- FW, DMF-651ANY-EB, DMF-682AN-EW , DMF-682ANF-EW , DMF-682ANY-E B, DXC-NYU -SL, DXC-50799 NYU-SL Y-B, EL-161060- C, EL- 16106C-C, EL-1 6117-C, EL-16433-W, F-51138NF- S-AA, GMF-51094NFHU-S, HL D-6116SPC-ED, L11-50-023, L G-50980A, LG-950980A, LGP-50980A, M-50888NF, S-12562-5M, TSW-50138B 183. The functions that can be performed by the end use devices for the L CDs in issue that were identified at trial are set by the manufacturer; the user of the end use de vice cannot add functions after sale. 184. A car owner would not be able to chang e the features of an odometer that incorpor ates any of the L

CDs in issue. 185. Allen Hou

ck did not b elieve that any of the en d use devices tha

t incorporate the

LCDs i n issue, other than computer servers, are ca pable of accepting new softwa re applications that allow the end user to manipulate data.18

186. Other than the computer servers, the end use de vices for the LCDs in issue run off operating sy stems that perform the specific function for the specific device. 187. None of the following features, standing alone and in the absence of contractua l obligations, would predestine an LCD f or a particular end use application: the color of the bezel, the viewing angle, the backlig ht color, the impact resistance, the temperature se ns it iv it y. 188. All of the LCD modules in issue whose end use applications wer e discussed at trial, other than those with permanently e tched icons, could be used for other applications if the end use device were designed so tha t the module fit in it. That is what is done by the customers who purc

hase fr om Optrex' s distribut

ors. 189. The ma

jorit y of the grap hic di splay mod ules i n iss ue are p rinci pally use d for s ignali ng. 190. When dete

rmining if an impor

ted artic le is clas sifiable

under He ading 8 471, Custom s applies the legal notes and the Explanatory Notes(“ENs” ) and al so con sider s the a rticl e's design, architecture and function. Customs only considers machines with a principal function of processing data to be “automatic da ta processing machines” of Hea ding 8471. Accord ing to Cus toms Natio nal I mport Spec ialist (“

NIS” ) Eileen

Kaplan, in confor

mity with the lo gical s tructure

of the HT SUS, if the

principa l function of an ar ticle is something

other tha n proces sing dat

a, it can not be classified in

Heading 8471, eve

n if, in accomplishing its intended purpose, it happens to process data. Examples of provisions that encompass articles with principal functions other than data proce ssing but which articles may pr

ocess data in accomplishing their principal functions are the provisions that cover line telephony

apparatus, radio telephony apparatus, radio navigational appara tus, meas uring a nd checking ap

paratus , fuel pum

ps, cash r egiste rs, point o f sale appara tus, and c opiers. U

nder Customs' inte

rpreta tion, Note 5(a) to Chapter 84

is used to exclude those artic les that should be cl assified in these o ther pro visions ra ther tha n in Heading 8471. 191. In explaining the basis for Optrex's position that the unknown end- use devices into which the “distribution parts” in issue satisfy Note 5( A)(a) to Chapter 84, HTSUS, Allen Houck stated: “the way

we would operate with a standard ty pe product is, you know, if we have a product that we k

now can go into cer

tain ty pes of pr oducts, w e will sell

them to multiple customers. We will sell them through distribution. However, looking at the interface structures, we’ve got a pretty g ood idea what it has to do to operate that product and, in the

vast major

ity o f these c ases, y

ou are g oing to ne ed a micr oproces sor system to perform any

type of pra

ctical solution to this.” 192. A microprocessor is a semiconductor chip, and a semiconduc tor chip is an integrated circuit.19

193. Microcontrollers are mic roproce ssors. 194. The microprocessor to which the L CD display would be connec ted acts as a central pr oc es si ng un it (" CP U" ) f or th e d ev ic e i nc or po ra ti ng th e d is pl ay. 195. In int

erpret ing and apply ing Note 5(A)(a ) to Chapte

r 84, Custo ms conside

rs the “u ser” to be the end user, i.e. , the person who purchases and/or uses the device , not the manufacturer or seller of the device

. 196. Customs interprets the requirement in Note 5(A) to Chapter 84, HTSUS, that an “automa tic data p rocessi ng mach ine” must b e “capa

ble of” “ being f reely progra mmed in accordance with the requirements of the end user” as meaning that the desig n and architecture of the device is such that it can be programmed to perform functions that correspond to the requirements of the user for the usable life of the machine, not just at the point of sale or distribution. The machine should be able to be progra mmed to do whatever the user wants it to do, within that machine's capa bilities, e.g. , to do taxes , to prepare a spreadsheet or a financial report, to play

video games or to do word processing. The fact that an automatic data processing machine may be come obsolete does not alter its status a s an ADP ma

chine. Cu stoms uses t

he phras es “cap able of b eing fr eely programmed” and “fre ely prog rammable” interchangea

bly. By contrast, according to the opinion of Optrex’s witness, Allen Houck, a device would satisfy this requirement just by having been pro gramme d by

the manuf

acture r, seller or distrib utor, eve n if the pr ograms could not be varied according to cha nging requirements of the end user . In addition, Allen Houck, testified about end-use devices being “freely programmed,” the term “freely ” had no significance and he mea nt that the device could be “programmed.” 197. Cust oms cl assif

ies ma chine s wit h mul tipl e funct ions , one o f whic h is d ata pro cessi ng, according to that machine's “ principal function.” 198. With respect to the requirement in Note 5(A)(a) to Chapter 84, HTSUS, that an “automatic data processing machine” must be “capable of” “performing arithmetical computations specified by the use r,” Customs does not look to machine functions when referring to “arithmetical computations,” but, ra ther, to standard computations that the machine 's user

would wan

t to perform such a s addition and subtr action. Cu stoms would look to see if the machine can accept applica tions, such as a calculating progra m or a tax progra m, that wou

ld allow th e user to

perfor m arithmetical com

putations

. 199. If any

of these Findings of Fact are more properly

denominated Conclusions of Law they shall be deemed to be so.20 IV CONCLUSIONS OF LAW 1. Optrex has effectively abandoned its claims with respect to any and all part numbers encompa ssed by

the entr ies at issu e for wh ich no evi dence w as prese nted at tr ial. 2. At the time relevant to this action, subheading 8531.20.00 encompassed: 8531 Electric sound or visual signaling appara tus (for example, bells, sirens, indicator panels, burglar or fire alarms) , other th an those o f headin g 8512 or 8530; parts thereof: 8531.20.00 Indic ator panels incor porating liquid cry

stal devic es (LCD's) or lig

ht emitting diodes (LED's)

. 3. At the time relevant to this action, subheading 8537.10.90 encompassed: 8537 Boards, panels, consoles, desks, cabinets and other bases , equi pped w ith t wo or m ore app aratus of head ing 8535 or 8536, for electric control or the distribution of electricity, including

those incorporating instruments or apparatus of chapter 90, and numerica l control apparatus, other than switching apparatus of heading 8517: 8537.10 For a voltage not exceeding 1,000 V: 8537.10.90 Other. 4. At the time relevant to this action, subheadings 9013.80.70 and 9013.80.90 encompassed: 9013 Liquid crystal devices not constituting articles provided

for more specifically

in other headings; lasers, other than laser diodes; other optical appliances and instrumen ts, not spe cified or include d elsewh ere in th is chapter; parts and accessories ther eof: 9013.80 Other de

vices, a ppliance s and instr

uments: 9013.80.70 Flat panel displays othe r than for articles of heading 8528 9013.80.90 Other.2 Heading 8471 covers: “Automatic data proc essing machines and units thereof;

magnetic or optical readers, mac hines for transcribing data onto data media in code d form and machines for processing such data, not else where specified or included.” 21 5. At the time relevant to this action, subheading 8473.30.50, HTSUS encompassed: 8473 Parts and accessories (other than covers, carry ing cases and the like) suitable for use solely or principa

lly with machines of hea

dings 8469 to 8472: 8473.30 Parts and accessories of the machines of hea ding 8471[ 2 ]: 8473.30.50 Other. 6. According to the General Rules of I nterpretation (“GRI” ), HTSUS relevant to this action: Classification of goods in the tariff schedule shall be g overned by the following principle s: 1. The table of contents, alphabetical index, and titles of sections, chapters and sub-chapters are provided for e ase of reference only ; for legal purposes, classification shall be determined according to the terms of the headings and any

relative section or chapter notes and, provided such headings or notes do not otherwise require, ac cording to the following provision s:

* * * 3. When, by application of rule 2( b) or for any

other reason, goods are prima facie , classifiable under two or more headings, c lassification shall be effec ted as fo llows: (a) The heading which provides the most specific desc ription shall be preferred to headings providing a more general descr

iption. However, when two or more heading s each refer to part only of the materials or substances contained in mixed or composite goods or to part on ly o f the item s in a set p

ut up for r

etail sal e, those heading s are to b e rega

rded as e qually

specific in relati on to those goods, e ven if one of them gives a mor

e complete or pre cise descrip tion of the

goods.

* * *22

7. Additiona

l U.S. Rule o f Int

erpret ation 1(c ) provide s: In the absence of

special language or c ontext which otherwise requires - - a provisi on for pa

rts of an article covers products s olely

or princ ipally

used as a part of such articles but a provision for “parts” or “ parts and accessories” shall not prevail over a specific provision for such par t or accessory ; . . . 8. Section X

VI, H TSUS, inclu

des Chapt ers 84 an d 85. Note

2(a) to Se ction XVI

provides , in relev ant part : Subject to Note 1 of this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of he ading No. 84.84, 85.44, 85.46 or 85.47) are to be cla ssified a

ccordin g to the f ollowing rules: (a) Parts which are goods included in any of the headings of Chapters 84 and 85 (other than head

ings Nos . 84.85 an

d 85.48) a re in all c ases to be

classifi ed in thei

r respective headings; . . . 9. Note 5 to Chapter 84 , HTSUS, pr ovides, in releva nt part: (A) For purposes of heading 8471, the expression “automatic da ta processing machine s” means : (a) Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary

for execution of the program; (2) being fre ely prog rammed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the

user; and (4) executing, without human intervention, a processing program which r equires them to modify their e xecution, by logical decision during the processing run;

* * *23

10. Note 2 to Chapter 90 , HTSUS, pr ovides, in releva nt part: 2. Subjec t to Note 1 a

bove, pa rts and a ccessor ies for ma chines, a pparatu s, instruments or articles of this chapter are to be classified a ccording to the following rules: (a) Parts and accessories which are g oods included in any of the he adings of this chapter or of chapter 84, 85 or 91 (other than he ading 8485, 8548 or 9033) ar e in all ca ses to be c lassifie d in their r especti ve head ings;

* * * Pl. Ex. 6, 90-1. 11. The Explanatory Notesare the official interpretation of the scope of the Harmonized Commodity Description and Coding Sy stem (which served as the basis of the HTSUS) as viewed by the Customs Cooperation Council, the international or ganization that drafted that international nomenclature. While the ENs “do not constitute controlling legislative history,” they

“nonetheless are intended to clarify the scope of HTSUS subheadings and to offer guidance in interpreting its subheadings.” Mita Copystar America v. United States , 21 F.3d 1079, 1082 (Fed. Cir. 1994). 12. The Explanatory Notesto Chapter 84, HTSUS, provide, in pertine nt part:

* * * Heading No. 84.71 does not c over mac hines inc orporat

ing or w orking i

n conjunct ion with an

automatic

data pro cessing

machine and perf orming a specific function . Such mac

hines ar e classif ied in the heading s appropr

iate to the ir respective functions or, f

ailing that, in re sidual he adings. Pl. Ex. 7, 1136. 13. The Explanatory Notesto Headin g 8471, H TSUS, prov

ide, in pe rtinent pa rt: (I) AUTOM

ATIC DATA

PROCESSIN G MACHI NES AND UNITS THEREOF Data processing consists in handling information of all kinds, in pre-e stablished logical sequences and for a spe cific purpose or purposes. Automatic

data pro cessing

machine s are ma

chines w hich, by logica lly interrelated operations performed in acc ordance with pre-established instructions (program), furnish data which ca n be used as such or, in some cases, serve in turn as data f or other data pro cessing

operati ons.24

This heading covers data processing machines in which the logical sequences of the operations can be change d from one job to another, and in which the operation can be automatic, that is to say with no manual intervention for the duration of the task. . . . They may

be self-contained, all the elements required for data processing being combined in the same housing, or they may be in the for

m of systems consisting of a var iable num ber of se parate units. Such machines are described as digital, a nalogue or hy

brid (analogue/digital), according to the method of processing the data. This head

ing also covers s eparat

ely present ed consti tuent units

of automa

tic data processing sy stems described above. However, the heading excludes machines, instruments or a pparatus incorporating or working in conjunction with an automatic da ta processing machine and performing a spec ific function. Such machines, instruments or apparatus are classified in the heading s appropriate to their respective functions or, faili ng that, in residual headi

ngs (Se e Part (E ) of the G eneral Explanator

y N ote to this Chapter). (A) DIG ITAL MACHI

NES

* * * The digital data processing machine s of this heading must be capable of fulfilling simultane ously

the condi tions laid d

own in Note

5 (A) (a ) to this Chapter. That is to say, they must be capable of: (1) Storin g the pr ocessing progra m or prog rams and at least t he data i mmediate ly necessa ry for the e xecution of

the prog ram; (2) Being freely

programmed in accordance with the requirements of the user; (3) Performing arithmetical computations specified by the user; and (4) Executing, without human intervention, a processing prog ram which requires them to modify their execution, by logical decision during the processing run. Thus machines which operate only on fixed programs, that is programs which cannot be modified by th e user, a

re exclud ed even though the user ma

y be able to choose b etween

a number of such f ixed prog rams. Part of the data and program or prog rams may be te

mporarily stored in auxiliary storage units such as those using magne tic discs or drums, magnetic tapes, etc. But these machines must have a main storage which is directly ac cessible for the execution of a par ticular progra

m and whic

h has a ca pacity at least s ufficie nt to store tho se parts

of the pr ocessing and tran slating

progra ms and the

data immediately nece ssary for the current processing run. Digital data pro cessing

machine s usually

consist of

a number of separ ately25

housed interconnected units. They then form a “sy stem”. A complet

e digita l data pr ocessing sys tem must comprise, a t least: (1) A central processing unit which g enerally inc orporates the main storage, the arithmet ical and logica l element s and the c ontrol ele ments; in some case s, however , these e lements ma y be in the for m of sepa rate uni ts. (2) An input unit which receives input data and converts them into signals whic h can be processed by

the machine. (3) An ou tput unit wh

ich conve rts the sig nals prov ided by the mach ine into intelligible form (printed text, graphs, display s, etc.) or into coded data for further use (processing, control, etc.)

* * * This head

ing also excludes:

* * * (c) Electronic integrated circuits and microa ssemblies, used as central processing units (known as “microprocessors” ), memories, etc. (heading 85.42).

* * * Pl. Ex. 7, 1297-1298, 1302. 14. The Explanatory Notesto Headin g 8473, H TSUS, prov

ide, in pe rtinent pa rt: Subject to the general provisions regar ding the classification of parts (see the General Explanatory

Note to Section XVI), this heading covers parts and accessories suitable for use solely or principally with the mac hines of heading 84.69, 84.70, 84.71 or 84.72. Pl. Ex. 7, 1304. 15. The Explanatory Notesfor Hea ding 853 1, HTSUS, provide, i n pertine nt part: With the exception of signalling apparatus used on cy cles or motor vehicles (heading 85.12) a nd that for traff

ic contr ols on roa ds (head ing 85.3 0), this he ading c overs al l electrical apparatus used for sig nalling purposes, whether using sound for the transmiss ion of the

signal ( bells, buzze

rs, hoote rs, etc. ) or using

visual ind

ication ( lamps, flaps, illuminated numbers, etc.), and whether operated by hand (e.g. door bells) or automatically (e.g . burglar alarms).26 * * * This heading includes, inter alia :

* * * (D) Indic ator panels and th e like. These are used (e. g., in of

fices, hotels and

factor ies) for calling personnel, indicating whe re a certain person or service is required, indicating whether a room is free or not . . .

* * * Pl. Ex. 7, 1381. 16. The Explanatory Notesfor Hea ding 901 3, HTSUS, provide, i n pertine nt part: This head ing incl udes: (1) Liquid cry

stal devices consisting of a liquid crystal layer sandw iched between two sheets or plates of glass or plastics, whether or not fitted with ele ctrical connections, presented in the piece or cut to special sha pes and not constituting articles described more specifically in other headings of the Nomenclature

* * * Pl. Ex. 7, 1478. 17. For an LCD to be a “ part” of an “automatic data processing machine,” the LCD must be dedicated for incorporation into a device that is, itself, an “a utomatic data processing machine.” 18. “Automat

ic data processi

ng mach ines” ar e classif iable in H eading

8471 of the

HTSUS. 19. In determining whe ther a good is classifiable under Hea ding 8471, HTSUS, the classifier must apply the L egal Notes to Section XVI and Chapter 84, HTSUS. Specifically , an imported article cannot be classified under Hea ding 8471 if it does not satisfy all of the criteria of Note 5(A)(a) to Chapter 84. T he classifier may

also be guided by

the relevant ENs. 20. For most of the LCDs in issue, the basis for Optrex's c laim that the LCDs in issue are classifiable as “parts” of “automatic data pr ocessing machines” in Heading 8473 is that each L CD has an i

nterfa ce that w ill conne ct the L CD to a micr oproces sor in an e

nd-use device and the microprocessor satisfies the four c riteria of Note 5(a) to Chapter 84,27

HTSUS. 21. All microprocessors process data (Tr. I I 790). However, the

microprocessors that interface with the LCDs in issue and a ct as CPUs are not “automatic data processing machines” under Heading 8471. Tr. I I. 878-879; Pl. Ex. 7, 1302. Such microprocessors (integrated circuits) are spe cifically provide d for in Heading 8542, HTSUS. See EN 84.71. 22. Because the microprocessors c ontained in the end-use devices for the L CDs in issue are not themselves, “automatic data processing machines,” and Optrex has provided no other basis to fi nd that the

end use d

evices, other tha

n the comp

uter ser vers, ar e “automatic data process ing machines” of

Heading 8471, none

of the en d use devices cou

ld be cla ssified in that tariff provision. 23. None of the descriptions of the specific end-use de vices provided by A

llen Houck demonstrates that these devices, other than the computer ser vers, satisfy the c

riteria of Note 5(A)(a) to Chapter 84, as explained below. 24. While there may be multiple definitions of the term “ program,” (as well as the var iations “programming,” “prog

ramming,” and “progra

mmable”), for purposes of determining whether a particular machine satisfies Note 5( A)(a) to Chapter 84, Customs interprets that term as r eferr ing to an “applic ation-ty

pe” prog ram that has been w

ritten to d o a speci fic function . Customs wo

uld not, for example, consider progra mming a v

ideo cas sette record er to be “ progra mming” in

the Hea ding 847 1 sense be cause th e “prog ram” is “fixed” and already

exists on firmware in the VCR and the user merely selects different aspect of that program from a menu or enters data into the machine. 25. Under Cus toms' inte rpreta tion of the

releva nt ENs, a machine t

hat is limite d to a spec ific function and does not handle “information of all kinds” is not an ADP machine. For example, a business telephone is not an ADP machine because it is not used to process or handle “information of all kinds.” 26. In accorda

nce with the ENs to Heading 8471, machines which oper ate only on fixed programs, that is programs which ca nnot be modified by the user, a re excluded from that heading even though the user ma y be able to c

hoose between a number of such fixed progra ms. 27. Applicat

ion prog rams are not “fixed

” becau se they

can be in stalled or

deleted from a machine. 28. All of the

end use d

evices i dentifie d at trial

except, pe

rhaps the computer

server s, opera

te on programs that are fixed by the manufacturer and cannot be cha nged by the user of that device. Tr. II

672, 679. Thus, these devices would, if imported, be excluded from28

classification in Heading 8471. 29. Customs' manner of determining the classification of a rticles of Heading 8471 is correct as a matte r of law a nd fact. 30. The req

uiremen t in Note 5(

A)(a) t o Chapter 84, HTSUS, that an “ automatic data processing machine” must be “capa ble of” “performing arithmetical c omputations specified by the

user” is not satisfied if the device in question only performs mathematical calculations automatically w hen the user engage s a particular feature of the devic e but does not actually spec ify the arithmetica l computations to be performed. 31. The Court finds that the imported articles are not parts of automatic data pr ocessing machines because none of the identified end use de vices into which the LCDs will be incorpor ated sat isfies the tariff d efinition of “automatic dat

a proce ssing ma

chines” in Note 5(A)(a) to Chapter 84. Specifically , none of these products can satisfy the require ment that a

n ADP mach

ine must be

“capab le of” “

being f reely progra mmed in accordance with the requirements of the user” and, while Optrex has demonstrated that each of the ident ified end use devices per

forms ar ithmetica l computa tions in accompl ishing its

principa l purpose , it faile d to demons trate tha t any of the en d use devices other than perhaps the computer serve rs, are capable of perfor

ming arithmetical computations specified by the use r. 32. Even if the end use devices could satisfy the tariff definition of ADP machine, however, Optrex's claim that all of its LCDs are “pa rts” of ADP machines would still fail since, under various legal notes and Additional U.S. Rule of I nterpretation 1(c), the claimed “parts” provision

(Headin g 8473)cannot pr

evail ove r specif ic provis ions such a s those for “liquid crysta

l devices” (Heading 9013), “c ontrol panels” (Heading 8473), or “signaling apparatus” (H eading 8531). 33. In determining whe ther an article is classifiable under subheading 9013.80, which covers liquid crystal devices, not constituting a rticles provided for more specifically in other headings, Customs first looks to see if the article is more specifically described by another provision . With respe ct to gr aphic dis play modules, Cu stoms would first consider whether the module

is classif iable as an ADP disp lay

in Headin

g 8471 or as a visual sig naling a pparatu s in Head

ing 8531 . If t

he artic le is clas sifiable

in either of these other headings, that is where Customs would classify it; if not, the article would be classified in Heading 9013. 34. Customs relied on the decisions in Sharp Microelectronics Technology , Inc. v. United States , 20 CIT 793, 932 F. Supp. 1499 (1996), aff'd , 122 F.3d 1446 (Fed. Cir.1997) (“ Sharp ”) to classify L

CD panels and, based on that decision, such panels would be classified in subheading 9013.80.90, which provides for, among other things, “other” “liquid crystal device s not constituting articles provided for more specifically in other29

headings.” Sharp confirms Customs' position that the provision for liquid crystal device s was more specific than a “parts” provision. More over, the existence of etched icons would not alter Customs' analy sis because the icons would not change the fa ct that the articles are liquid cry stal devices in accordance with the definition provided in the Explanatory Notes

. 35. The Optrex LCD panels are the sa me type of mer

chandise as was at issue in Sharp

. Specifically, as in Sharp , each of Optrex's L CD panels contain two rectangular ultra f lat glass su bstrates ; the inter

ior of the glass be tween the substrate s is filled

with liquid cry stals, the

glass su bstrates have inne

r surfa ces that have be en coate d with indiu m tin oxide and etched, the interior of each glass substrate is covered with a processed alignment layer which causes the liquid crystal molecules to align in a fixed direction, the substrate s are he

rmetica lly s ealed to gether

and, for many of the pa nels, whe n the gla ss subst rate s are joine d, the

electrode s are

perp endi cula

r to e ach o ther , cre ating

a mat rix. 36. As here, the plaintiff in Sharp claimed that its LCD panels were c lassifiable as “parts of ADP machines” of Heading 8473 rather than as “liquid crystal de vices not constituting articles provided for more specifically in other headings” in Heading 9013. 37. In Sharp , the court stated: When dete

rmining relative specific ity, the cour

t looks at the provisi on with “requir ements wh

ich are more diff

icult to sa tisfy and which descri

be the ar ticle with the greatest degree

of accuracy

and certainty .” . . . As added guidance, additional U.S. Rule of Interpretation 1(c) provides that “a provision for ‘parts and accessories’ shall not prevail over a spec ific provision for such part or accessory .” The court finds that Heading 9013 contains a spec ific provision for liquid crystal devices and thus is more specific than the part provision under He ading 8473. 932 F. Supp. at 1507 (citation omitted). 38. The Court

of Appea ls for the Feder al Circui t affirm ed this co urt's r elative s pecific ity analysis in Sharp , which concluded that the claimed parts provision was less specific than Heading 9013. 39. With respect to the Optrex LCDs that are “g lass panels” and not “modules,” the Sharp case is directly

on point because Optrex's complaint claims only that the glass panels (and all of the other ar ticles in i ssue) ar

e classif iable as “parts” of ADP mac

hines, the same claim discussed at length in both Sharp decision s. 40. Because, under Sharp , basic LCD glass pane ls are classifiable under Heading 9013, the imported articles identified by Allen Houck as LCD panels ar e classifiable in that heading . Moreove

r, beca use they do not fal l within an

y of the more specific ally30

descrip tive subhe adings ( e.g. , perisc opes, las ers) an d are not sufficie ntly advanc ed to constitute “flat pa nel displa ys, ” “mag nifiers” or “door viewers ,” they

are pro perly classifiable as “other” “Other devic es, appliances and instruments” in subheading 9013.80.9 0, HTSUS. 41. In order for a

n LCD module to be eligible for c lassification as an indicator panel incorporating a liquid crystal device under subheading 8531.20.00, HTSUS, Customs has consistently taken the position that the module must belong to a c lass or kind or mercha ndis e that is pri ncipa lly used a nd/o r lim ited b y design to signal ing. 42. To be classifiable as an indicator panel incorpora ting a liquid crysta

l device under subheading 8531.20.00, HTSUS, the articles must belong to the class or kind of mercha ndise tha t is princi pally used to dis

play limited inf

ormation t

hat is ea sily understood by the person viewing it. 43. With respect to the classification of character display modules, Customs has developed a guideline for determining if a cha racter display

module is principally used for sig naling. In accorda

nce with this guideline, which has been dubbed the “80 c haracter rule,” if a character display

module can display no more than 80 characters, then, in the absence of any informat ion to the c ontrary

, it is deemed to belong to the class or kind of me

rchandi se that is principally used for sig naling. 44. The “80 character rule” is entitled to some deference as reasonable unde r Skidmore v. Swift & Co. , 323 U.S. 134 (1944) , since it has been c onsistentl y a pplied since the e arly 1990s and provides rationa l and usef ul guida nce in de termining whether a partic ular L CD module is classifiable in Heading 8531 or in, for example, Heading 9013, which, at the time of the entries in issue, carried a higher duty rate. 45. Customs' position with respect to the characteristics of articles classifia ble in Heading 8531 is in ha

rmony with the examples in the ENs to He ading 8 531, which states, in pertine nt part: With the exception of signaling apparatus used on cy cles or motor vehicles . . . and that for traffic controls on roads . . ., this heading covers all electrical apparatus used for signaling purpose s, whether using sound for the transmission of the sig nal (bel ls, buzzers, hooters, etc.) or using vis ual indic ation (la

mps, flap s, illuminated numbers, etc.), and whether operated by hand (e.g. door bells) or automatically (e.g . burglar alarms). This heading includes, inter alia :

* * *3 E.M. Chemi cals was decided under the Tariff Schedule s of the United States (“TSUS”)

which, unlike the HTSUS, had no express provision for liquid crysta l displays such as Hea

ding 9013, and the issue in that ca se was whether imp orted liqu id crystals wer

e classif iable as “parts of indica tor pane ls” or as

a chemic al mixture. Thus, although the definition of “indi cator pa nel” applied in that case is useful, the Court of Appeals determined, in effe ct, that all LCDs that were not incor porated within spe cific en

d-use pr oducts suc

h as “wa tches, c lock rad

ios, calc ulators, computers, gas pumps, meters, various medical and scientific instrumentation, toys, and aut om obi le d ash boa rds ” (9 20 F .2d at 9 11) at t he t im e of im por tat io n we re “ in di cat or p ane ls .” In enactin g the HT SUS, which

does con tain a spe cific pr

ovision for liquid cr

yst al display s, Congre ss recog

nized that s

uch arti cles ar

e not all u sed as ind

icator p anels. 31 46. Customs’ position with respect to the characteristics of articles classifiable in Hea ding 8531 also comports with the court's interpretation of the term “indicator panel” in E.M. Chemicals v. United States , 920 F.2d 910, 913 (Fed Cir. 1990): 3

. . . a n i nd ic at or pa ne l i s p ro pe rl y cl as si fi ed un de r It em 68 5. 70 if it me re ly c on ve ys information. A & A Int' l, Inc. v. United States , 5 CIT 183, 187- 89 (1 983) . We agree with this interpretation of I tem 685.70. An LCD, as a signaling device or an indicator panel, may

simply convey informat ion or noti fy

the user of a spec ific event. An LCD may

operate in this manner in normal or abnormal circumstance s. . . The terms “indicator panels” or “signa ling devices” simply

denote objects that “indi cate” o r “sign al” . . . We t herefo re hol d, as a matt er of l aw, th at the langua ge “indicator panels ... [or] other ... visual signaling apparatus,” in I tem 685.70, includes devices that signal or indicate ge nerally . . . 47. Optrex has failed to demonstrate that Customs’ position with respect to the characteristics of artic les class ifiable i

n Headin g 8531 is incorre ct.32

48. With respect to part numbers DMF-50073NF-FW and DMF- 50840NF-FW-3, which are graph ic display modules th at are im

ported with touch s creens attache d, beca

use these “touch screen” modules possess the charac teristics of control panels of Heading 8537, defendant's third alternative counterc laim is granted. 49. If any

of these Conclusions of Law are more properly

denominated Findings of Fact they shall be deemed to be so.

Dated this _27_ day of F ebruary , 2006. _/s/ Evan J. Wallach____ Evan J . Wal lach, Judge United States Court of International Trade