[00:00:00] Speaker 02:
Mr. Peterson, whenever you're ready.

[00:00:09] Speaker 00:
Thank you, Your Honor, and may it please the Court.

[00:00:10] Speaker 00:
My name is John Peterson, representing the plaintiff appellant Lockhart Textiles.

[00:00:16] Speaker 00:
The United States Court of International Trade committed three reversible legal errors in holding that the yarns comprising

[00:00:27] Speaker 00:
our clients imported trousers were not metalized yarns for tariff purposes.

[00:00:32] Speaker 00:
I'd like to turn to each of those errors individually.

[00:00:36] Speaker 00:
First, the court disregarded the language of the statute.

[00:00:40] Speaker 00:
In order for something to be classified as a metalized yarn under the harmonized tariff schedule, it has to jump through a lot of hoops.

[00:00:48] Speaker 00:
It has to be a textile yarn of heading 5404 or 5405, which our product is.

[00:00:55] Speaker 00:
It has to be a synthetic polyester monofilament of 67 desitex or more, which we are.

[00:01:02] Speaker 00:
It can't have a cross-sectional dimension exceeding 1 millimeter.

[00:01:06] Speaker 00:
And it must be combined with metal in specific form, form of a thread, strip, or powder.

[00:01:12] Speaker 00:
Now, our product ticks all those boxes.

[00:01:16] Speaker 00:
Our yarn ticks all those boxes.

[00:01:18] Speaker 00:
And the lower court admitted as much.

[00:01:21] Speaker 00:
This should have ended the inquiry, because the starting point for construction of a statute is the language of the statute itself.

[00:01:28] Speaker 00:
And under the statute, the yarns comprising our trousers met the very exacting definition of metalized yarn.

[00:01:36] Speaker 03:
Council, this is Judge Stoll.

[00:01:38] Speaker 03:
As I read the opinion below, I understood it to be focusing on that language, yarn, then combined with metal.

[00:01:48] Speaker 03:
And that this language in the heading, because it says yarn, then it's combined with metal, means that it's yarn that's already been made, and then it's combined with metal.

[00:01:59] Speaker 03:
Whereas in your product, as I understand it, there's materials to make the yarn, and then metal, and then together they're combined, and they make yarn.

[00:02:10] Speaker 03:
As opposed to having a separately constructed piece of yarn, which is then combined with metal.

[00:02:16] Speaker 03:
Am I correct in understanding that that was the ruling?

[00:02:19] Speaker 03:
And if so, why is that wrong?

[00:02:22] Speaker 00:
Well, Your Honor, to the extent that's what the lower court held, it was wrong because there's a very well-established doctrine in tariff law called the pre-existing material doctrine.

[00:02:35] Speaker 00:
And it says when a tariff wants to imply, when a tariff revision wants to imply that

[00:02:43] Speaker 00:
there must be a pre-existing material.

[00:02:45] Speaker 00:
The language of the tariff is very clear and very specific.

[00:02:50] Speaker 00:
And merely saying that something is composed of a substance or it is metalized or has an adjective attached to it is not sufficient.

[00:02:59] Speaker 00:
Now we addressed that in our reply brief when we talked about the Jock Isler case where the question was, was a particular product the hood of felt fur?

[00:03:11] Speaker 00:
And in that particular process, the felt was created in the form of a hood.

[00:03:17] Speaker 00:
And the argument was, well, this is not a hood of fur felt because there was no pre-existing felt.

[00:03:23] Speaker 00:
But the court said, no, no, the language of the tariff item in the Jock Isler case did not implicate the pre-existing material doctrine.

[00:03:31] Speaker 00:
And in fact, the language here does not implicate the pre-existing material doctrine because the language of the statute

[00:03:38] Speaker 00:
is totally silent, and it makes no reference at all to the method by which the metal powder in this case and the yarn are combined.

[00:03:47] Speaker 00:
So to the extent the lower court invoked the preexisting material doctrine, it did so incorrectly.

[00:03:54] Speaker 02:
Well, this is Judge Prost.

[00:03:56] Speaker 02:
My only comment there is that, as you noted, this argument was made in gray.

[00:04:03] Speaker 02:
So I look forward to the government's response when it gets up in a few minutes.

[00:04:08] Speaker 00:
Right, and if one looks at the red brief, Your Honor, you'll notice that the government is inconsistent in its position because the government doesn't argue that you always have to have a pre-existing textile yarn.

[00:04:21] Speaker 00:
The government says, well, you could have a combination of metal with pre-existing plastic film to make lurex.

[00:04:28] Speaker 00:
So we just don't think the pre-existing material doctrine applies here.

[00:04:32] Speaker 00:
It's been a while since the court

[00:04:34] Speaker 00:
applied it, but if you go back to the Jock Isler case, you'll see we fit pretty comfortably into that precedent.

[00:04:41] Speaker 00:
Now, if I may, the second legal error, you know, once the court determined that this product satisfied the requirements of the tariff provision for metalized yarn, the next step would have been to perform a check and to apply the essential resemblance test.

[00:04:57] Speaker 00:
It's a long-established rule of interpretation that an AO nominate product covers all forms of the named article.

[00:05:04] Speaker 00:
including newly developed forms.

[00:05:06] Speaker 00:
Now, the essential resemblance test, it's a judicial check on that.

[00:05:12] Speaker 00:
It prevents me from, say, creating a new type of pocket comb and calling it metalized yarn.

[00:05:18] Speaker 00:
The court will say, well, before I classify it as metalized yarn, I want to see if it has an essential resemblance to the other things known as metalized yarn.

[00:05:26] Speaker 00:
And the lower court here did something very curious.

[00:05:29] Speaker 00:
It said that the essential resemblance test

[00:05:32] Speaker 00:
died with the former harmonized tariff schedule of the United States.

[00:05:36] Speaker 00:
Now, he didn't say why.

[00:05:39] Speaker 00:
Certainly, there are cases where a new tariff statute may contain specific new rules that render obsolete old judicial rules of construction.

[00:05:50] Speaker 00:
For those of us old enough to have practiced with it, in the old tariff schedule, there was a whole judicially constructed doctrine of empires.

[00:05:58] Speaker 00:
It went away with the harmonized tariff schedule, because the HTS had specific rules on how to deal with goods and composite goods and sets.

[00:06:07] Speaker 00:
But there's nothing in the harmonized tariff schedule that would make the essential resemblance test go away.

[00:06:14] Speaker 00:
And in fact, this court has recognized that a NAO nominee provision covers all forms of the article.

[00:06:23] Speaker 00:
It's cited the NUCCA packing decision, which is its seminal decision on this point,

[00:06:28] Speaker 00:
And I'd just like to point out that the case of Decker's court versus the US, this court decided in 2014.

[00:06:35] Speaker 00:
And the court said the EO-nominated provisions in the HTS cover articles which, quote, perform the same essential function as the named exemplar, or which, quote, possess the essential characteristics of the specifically named or enumerated article.

[00:06:52] Speaker 00:
So I would suggest that the lower court erred

[00:06:56] Speaker 00:
in suggesting the essential resemblance test was no longer applicable.

[00:07:00] Speaker 03:
Council, I understand your point, but I just want one, I want to ask you one question for clarification.

[00:07:06] Speaker 03:
I understand you to be saying that the essential resemblance test is still well in alive, but it wouldn't come into play until after I determine whether your product satisfies the heading of metalized yarn being textile yarn combined with metal, right?

[00:07:25] Speaker 00:
That's correct, Your Honor.

[00:07:26] Speaker 00:
I don't think there's any dispute in this case that our products do meet that definition.

[00:07:34] Speaker 03:
Well, I thought that actually that was disputed and that was part of the holding below.

[00:07:38] Speaker 03:
The court below said that your product was not made of metalized yarn, right?

[00:07:45] Speaker 00:
Well, no.

[00:07:45] Speaker 00:
The metal is there.

[00:07:46] Speaker 00:
I mean, it's not disputed.

[00:07:48] Speaker 00:
I mean, the lower case was decided on a summary judgment motion.

[00:07:53] Speaker 00:
So both parties, I think, agree that there's metal in the... I mean, metalized yarn for tariff purposes.

[00:08:00] Speaker 00:
Right.

[00:08:00] Speaker 03:
I think you're repeating very precise.

[00:08:02] Speaker 03:
You might refer to it as metalized yarn, but I'm saying for tariff purposes under, you know, the 5605 provision.

[00:08:13] Speaker 00:
If the lower court disputed it, it was likely because it was either applying a pre-existing material doctrine or

[00:08:22] Speaker 00:
probably because of what we say is the third legal error, which is the court improperly read the explanatory notes to create an exception to the coverage of the tariff language.

[00:08:34] Speaker 00:
And that's what the court did.

[00:08:35] Speaker 00:
Now, the court focused on an explanatory note that said that the 5605 provision for metal yarn did not cover, quote, yarn composed of a mixture of textile material and metal fibers conferring an anti-static effect.

[00:08:52] Speaker 00:
That's not a derogation or exception from the statutory language, because that's talking about yarns with metal fibers.

[00:09:00] Speaker 00:
And something with metal fibers couldn't be a metalized yarn, because the language of the tariff limits us to thread, strip, and powder.

[00:09:08] Speaker 00:
So that was just my way of explanation.

[00:09:10] Speaker 00:
Now, this court had suggested back in the Midwest of Cannon Falls case in 1997

[00:09:19] Speaker 00:
that you don't read the particulars of the explanatory notes as a limitation on the language of the statute.

[00:09:26] Speaker 00:
But more to the point, about a month after the lower court issued its decision in this case, this court came out in the case of Apple Inc.

[00:09:34] Speaker 00:
versus the United States and said it in plain words, quote, explanatory notes cannot create an exception to an HTS heading.

[00:09:43] Speaker 00:
And that's all there is.

[00:09:45] Speaker 00:
Now, one of the real problems here

[00:09:48] Speaker 00:
is if a trial court can take a look at an explanatory note.

[00:09:52] Speaker 00:
And mind you, that explanatory note talked about yarns and metal fibers for anti-static purposes.

[00:09:59] Speaker 00:
If a court can read out from that and expand that and say, well, then it doesn't cover a combination of yarn with metal powder for ultraviolet protection purposes, then the entire scheme of harmonized tarot schedule construction becomes unmoored.

[00:10:18] Speaker 00:
You know, the law means whatever a judge feels at a particular time.

[00:10:22] Speaker 00:
And all we're asking here is for the court to follow the rule that we interpret something according to the language of the tariff, follow the longstanding rule that the AO nominate provision covers all forms, including subsequently developed forms, apply the essential resemblance test, which the lower court failed to do.

[00:10:46] Speaker 00:
I think when you do that,

[00:10:47] Speaker 00:
Your Honor, you will reverse the lower court and classify our products as being trousers of other fabrics because they are made of metalized yarns.

[00:10:57] Speaker 00:
And I'll reserve any further time for rebuttal if I may.

[00:11:00] Speaker 02:
Thank you.

[00:11:04] Speaker 02:
Ms.

[00:11:04] Speaker 02:
Powell.

[00:11:08] Speaker 05:
Good morning.

[00:11:10] Speaker 05:
My name is Marcella Powell.

[00:11:11] Speaker 05:
I represent Appellee of the United States.

[00:11:14] Speaker 05:
May it please the court.

[00:11:16] Speaker 05:
The trials of that issue are properly classifiable in subheading 6114.63.21 because they are not made with metalized jar.

[00:11:28] Speaker 05:
So the central issue on this appeal is the interpretation of the scope and meaning of heading 5605.

[00:11:38] Speaker 05:
And appellant pointed out and argued that the trial court meets three

[00:11:45] Speaker 05:
fundamental errors, we disagree.

[00:11:48] Speaker 05:
The trial court here used all of the tools of statutory interpretation.

[00:11:56] Speaker 05:
As established, as well established, that GRI 1 is paramount, which means the first thing you do is to look at the language of the heading.

[00:12:06] Speaker 05:
And that's what the court did.

[00:12:09] Speaker 05:
It looked at the language of the heading, and it's reflected in its decision.

[00:12:13] Speaker 05:
And the heading here

[00:12:14] Speaker 05:
says, metalized yarn, whether or not gimped, being textile yarn, or strip, or the like, of headings 54 or 5405.

[00:12:26] Speaker 05:
Then it's combined with metal in the form of thread, strip, or powder, or covered with metal.

[00:12:34] Speaker 05:
The trial court then used additional tools to determine the meaning and scope of that heading.

[00:12:42] Speaker 05:
Council, this is just gold.

[00:12:44] Speaker 03:
Yes.

[00:12:45] Speaker 03:
You know, I see where the court specifically on page A8 identifies your argument for how to interpret heading 5605 specifically as what you've just said.

[00:12:56] Speaker 03:
And I appreciate that argument.

[00:12:59] Speaker 03:
Where is it in the court's opinion that it specifically says that it agrees with the defendant on that or says that

[00:13:05] Speaker 03:
specifically that there's two distinct requirements of Heading 5605, namely a product of yarn that is combined with metal.

[00:13:16] Speaker 03:
Where would I find that?

[00:13:19] Speaker 05:
I don't think the court actually stated that there were two distinct products.

[00:13:26] Speaker 05:
But what the court did find was that it did not cover all combinations of textile, yarn, and metal.

[00:13:36] Speaker 05:
And what it did was it looked at the industry definitions to confirm its understanding of the plain language of the statute as well as looked at the explanatory notes.

[00:13:51] Speaker 03:
And where does it talk about the plain language of the heading?

[00:13:55] Speaker 03:
Is it really just at page 8?

[00:13:57] Speaker 03:
Is there someplace else I should be looking at?

[00:14:07] Speaker 05:
No, no, it's not on page eight.

[00:14:10] Speaker 05:
This trial court did not, the trial court looked at the language of the heading, but did not, you know, we'll concede did not do an in-depth analysis of the heading.

[00:14:20] Speaker 05:
So no, the trial court decision doesn't expressly state that it followed the plain language of the heading, but that's exactly what it did.

[00:14:29] Speaker 05:
It confirmed that the heading does not cover all textile and yarn combinations.

[00:14:36] Speaker 05:
It confirms that understanding or interpretation is consistent with the industry definitions and consistent with the explanatory notes.

[00:14:47] Speaker 05:
So while the trial court's decision isn't, as some say, a model of clarity, that's exactly what the trial court did.

[00:14:54] Speaker 05:
It used the tools of statutory interpretation.

[00:15:00] Speaker 02:
Ms.

[00:15:01] Speaker 02:
Powell, this is Judge Gross.

[00:15:03] Speaker 02:
As we mentioned talking to your friend, he raised the pre-existing material doctrine in gray for the first time.

[00:15:11] Speaker 02:
So would you care to respond to the argument he made in gray?

[00:15:16] Speaker 05:
Sure.

[00:15:17] Speaker 05:
The pre-existing material doctrine, similarly to the essential resemblance doctrine, those were concepts under the two sets.

[00:15:28] Speaker 05:
In the gray brief,

[00:15:29] Speaker 05:
There are no decisions applying those concepts to the HTSU Act, because we actually have GRIs, which weren't in existence for the TUSIS.

[00:15:41] Speaker 05:
In the GRI state, you look at the language of the heading.

[00:15:44] Speaker 05:
There's no need to look at an essential resemblance.

[00:15:47] Speaker 05:
There's no need to look at pre-existing material.

[00:15:50] Speaker 05:
The GRIs take care of that.

[00:15:52] Speaker 05:
You go through GI 1, and if you can't classify it,

[00:15:56] Speaker 05:
of product under GI-1, then you go to GI-2, you go to GI-3.

[00:16:00] Speaker 05:
There's no need to go to these sort of older Q-SYS concepts to classify merchandise.

[00:16:13] Speaker 05:
One of the other... I know.

[00:16:14] Speaker 01:
I know.

[00:16:14] Speaker 01:
I'm sorry.

[00:16:14] Speaker 01:
This is Judge Clavinger.

[00:16:15] Speaker 01:
I don't think you're really responding to the question that Judge Prost was asking you, which is whether you're arguing that raising the issue in the grade group was too late.

[00:16:28] Speaker 05:
Oh, I'm sorry.

[00:16:29] Speaker 05:
Yes, it was too late.

[00:16:34] Speaker 05:
Yes, it was too late.

[00:16:36] Speaker 05:
And the court, you know, reading the court's decision, we disagree that the court even applied that doctrine.

[00:16:48] Speaker 01:
You disagree that the court applied the doctrine?

[00:16:51] Speaker 05:
Yes, the court didn't apply the pre-existing material doctrine that's in the two sets.

[00:16:57] Speaker 05:
looked at the plain language of the heading.

[00:17:02] Speaker 05:
It actually, just like with the essential resemblance doctrine, if it's something from the twosys, it's not necessarily carried over into the HTS-USB.

[00:17:11] Speaker 01:
This is Judge Clevinger.

[00:17:12] Speaker 01:
Can you read me the language of the heading and then explain to me why the heading does not cover all?

[00:17:21] Speaker 01:
What are the specific words you're talking about?

[00:17:26] Speaker 05:
The specific words as it pertains to this case is our textile being, being textile yarn combined, meaning you have to be a yarn, textile yarn of heading 5404 or 5405 combined with metal in the form of thread strip or powder or covered with metal.

[00:17:49] Speaker 01:
So you have to be- Your argument is that the words of the statute, in essence, create a pre-existing material.

[00:17:59] Speaker 05:
Yes.

[00:17:59] Speaker 05:
It says it must be a pre-existing material.

[00:18:03] Speaker 05:
Also, we can't also ignore that the first two words in the statute are a metalized yarn.

[00:18:10] Speaker 05:
So we're metalizing yarn.

[00:18:12] Speaker 05:
So it's consistent with the words being textile yarn.

[00:18:18] Speaker 05:
or strip or the like of heading 5404 or 5405, combining that with metal.

[00:18:27] Speaker 05:
And so that's how the plain language should be interpreted.

[00:18:33] Speaker 05:
And again, it's consistent with the definitions, consistent with the explanatory notes.

[00:18:40] Speaker 05:
It also is consistent with the notion that we don't read statutes in a vacuum.

[00:18:45] Speaker 05:
We don't read statutes to

[00:18:47] Speaker 05:
in a way that reads out other provisions, right?

[00:18:51] Speaker 01:
On your reading of the heading itself, you don't need the explanatory notes and you don't need existing practice, right?

[00:19:02] Speaker 05:
No.

[00:19:03] Speaker 05:
No.

[00:19:04] Speaker 05:
We don't.

[00:19:04] Speaker 05:
But those are additional... That's additional support.

[00:19:08] Speaker 05:
I think I'll state.

[00:19:11] Speaker 05:
Yes.

[00:19:12] Speaker 05:
Right.

[00:19:13] Speaker 05:
It's to confirm.

[00:19:14] Speaker 05:
It's to show that, okay, that

[00:19:17] Speaker 05:
that reading, that interpretation is correct.

[00:19:21] Speaker 05:
So no, you don't need the explanatory notes or the industry definitions, but they are consistent with that reading and, like I said, consistent with the notion that you read all the HTSUF provisions together so that you don't make this provision so broad that it reads out other provisions.

[00:19:46] Speaker 05:
Any other?

[00:19:48] Speaker 05:
Sure.

[00:19:49] Speaker 05:
I wanted to touch on the fact that counsel had mentioned the Apple case.

[00:19:55] Speaker 05:
The Apple case, we agree that the court did hold that and it held the same thing in Midwest, that you can't use an explanatory note to create an exception or a limitation in a heading.

[00:20:10] Speaker 05:
But we submit that that didn't happen here.

[00:20:13] Speaker 05:
The court did not create an exception or a limitation.

[00:20:16] Speaker 05:
What the court did with the explanatory notes is both parties brought up the explanatory notes.

[00:20:22] Speaker 05:
So the court had sort of an obligation to address them.

[00:20:25] Speaker 05:
And that's what the court did.

[00:20:27] Speaker 05:
And with respect to appellant's assertion that the trial court read in a limitation regarding the anti-static

[00:20:40] Speaker 05:
yarn and fibers mentioned in the explanatory notes, that's not what the court did.

[00:20:46] Speaker 05:
The court looked at those three or four, I would say, exclusions, but not necessarily exclusions, and looked at it in the terms and said, okay, there are other provisions in the HTS US that cover metal and textile yarn combinations.

[00:21:05] Speaker 05:
That's the purpose of that note, is to inform

[00:21:10] Speaker 05:
the judge to inform the court on the scope of the heading.

[00:21:14] Speaker 05:
So it didn't really read those limitations into the heading.

[00:21:18] Speaker 05:
It just used those limitations to inform the scope of the heading so that the scope of the heading wouldn't be interpreted so wide that it would subsume other provisions.

[00:21:33] Speaker 05:
And I think the last thing I wanted to mention was the Lorex reference.

[00:21:40] Speaker 05:
There was the assertion that customs has sort of been inconsistent in that it classified Lorex as a metalized yarn under 5605.

[00:21:52] Speaker 05:
That is correct.

[00:21:54] Speaker 05:
Lorex is a metalized yarn under 5605.

[00:21:57] Speaker 05:
It is made with plastic, sandwiching aluminum between two sheets of plastic.

[00:22:04] Speaker 05:
And the plastic falls under the phrase

[00:22:09] Speaker 05:
strip or the like of heading 5404 and 5405.

[00:22:13] Speaker 05:
And it's also consistent in that it's a multi-component way of metalized yarn.

[00:22:21] Speaker 05:
So there's no inconsistency on customs' behalf in classifying Lorex as metalized yarn.

[00:22:30] Speaker 05:
And last, the court did note that there were some disagreements in terms of

[00:22:37] Speaker 05:
Some of the facts below, we don't think it should preclude, it didn't preclude summary judgment.

[00:22:43] Speaker 05:
It shouldn't preclude this court from affirming the trial court's decision, but I just wanted to touch on that.

[00:22:51] Speaker 05:
And in closing, we submit that the trial court's decision regarding the classification of the trial is correct.

[00:23:01] Speaker 05:
It used the tools of statutory interpretation.

[00:23:04] Speaker 05:
and the decision should be affirmed.

[00:23:07] Speaker 05:
Thank you.

[00:23:08] Speaker 02:
Thank you.

[00:23:10] Speaker 02:
Mr. Peterson, I think you have a few minutes left.

[00:23:16] Speaker 00:
Thank you, Your Honor.

[00:23:17] Speaker 00:
A couple of brief points.

[00:23:19] Speaker 00:
First, my learned colleague indicated that Judge Borden and his decision had relied on industry definitions.

[00:23:26] Speaker 00:
While she was speaking, I reread the decision, and I didn't see any reference to industry definitions there.

[00:23:32] Speaker 00:
So I don't think that he applied that he relied on those.

[00:23:36] Speaker 00:
Secondly, with regard to the pre-existing material document, we raised it in the Gray brief because it was responsive to the argument contained at pages 13 and 19 of the government's brief.

[00:23:47] Speaker 00:
And it wasn't too late.

[00:23:48] Speaker 00:
I think what the court should bear in mind is in a tariff case of this kind, where there's no dispute of fact, it's a pure question of law.

[00:23:57] Speaker 00:
And this court decides the issue de novo.

[00:24:00] Speaker 00:
without regard to the CIT's decision.

[00:24:02] Speaker 00:
So consequently, if the government in its brief was urging this court to apply the pre-existing material doctrine, it was certainly proper and in fact necessary for us to address that in the reply brief.

[00:24:16] Speaker 00:
Now, with regard to the pre-existing material doctrine, counsel makes a very new argument here and says, well, that too died with the harmonized tariff schedule.

[00:24:27] Speaker 00:
She says that's because we have general rules of interpretation in the HTS.

[00:24:32] Speaker 00:
And that may well be, but she never indicated what rule of interpretation in the HTS might have addressed the question of pre-existing material.

[00:24:42] Speaker 00:
Under this court's precedent, you always looked to the language of the tariff.

[00:24:47] Speaker 00:
So if something said, you know, flitches made from

[00:24:55] Speaker 00:
pine trees or something, that would have a pre-existing material connotation.

[00:25:00] Speaker 03:
She also said that the lower court... Council, this is Judge Stahl just really quickly.

[00:25:06] Speaker 03:
What about the language where it says metalized yarn being textile yarn combined with metal?

[00:25:13] Speaker 03:
Why isn't the idea of yarn, that's one thing, combined with metal, that's the second thing.

[00:25:20] Speaker 03:
Why isn't that language alone clear enough?

[00:25:23] Speaker 03:
I believe that's what the government's relying on.

[00:25:26] Speaker 00:
Well, two reasons, Your Honor.

[00:25:28] Speaker 00:
First of all, the government itself doesn't take the position that you have to combine the metal with the pre-existing textile yarn.

[00:25:37] Speaker 00:
She just gave the example of Lurex.

[00:25:39] Speaker 03:
No, I think you're wrong on that.

[00:25:41] Speaker 03:
I actually think she does think that it's two separate things, and that's their main point.

[00:25:48] Speaker 03:
But anyway, and I think her point was that Lurex is a material that is then combined with metal.

[00:25:58] Speaker 03:
But anyway, go ahead.

[00:25:59] Speaker 00:
OK.

[00:26:00] Speaker 00:
Well, the other point is that at no point does heading 5605 say that the yarn has to pre-exist the combination with metal.

[00:26:11] Speaker 00:
You have to have a textile yarn.

[00:26:13] Speaker 00:
The existence of Lurex tells us that's not the way to interpret the law.

[00:26:17] Speaker 00:
But also there's nothing that says where or how or when the metal can be combined.

[00:26:22] Speaker 00:
So what we have here is a new technology where we create the yarn and the metalized yarn in the same operation.

[00:26:31] Speaker 00:
Precisely what happened in the Schott-Isler case, they created the felt and they created the hood made from the felt in the same operation.

[00:26:40] Speaker 00:
They came into existence simultaneously.

[00:26:43] Speaker 00:
There's nothing in the language of heading 5605

[00:26:47] Speaker 00:
that precludes that result in this case.

[00:26:51] Speaker 00:
And if that is all, Your Honor, I conclude it.

[00:26:57] Speaker 00:
Thank you.

[00:26:58] Speaker 02:
Thank you.

[00:26:59] Speaker 02:
We thank both sides and the case is submitted.