[00:00:01] Speaker 03:
Okay, we will hear argument next in number 23 1210 RKW clerks versus United States and First let me thank everybody for your patience Mr.. Reed Your honors may it please the court Patrick Reed for the appellant RKW clerks I

[00:00:31] Speaker 01:
Your Honors, the Court of International Trade committed a reversible error because it applied an incorrect legal standard in determining whether the imported netwrap on its cardboard core is a part of a bailing machine.

[00:00:45] Speaker 01:
This court's legal standard has made it clear that the test for a part is a two-part disjunctive test, an either-or test.

[00:00:55] Speaker 01:
Either the imported netwrap

[00:00:57] Speaker 01:
must be dedicated solely for use with the bailing machine or alternatively it must be integral to the function of the bailing machine necessary to the function so that the bailing machine could not perform its function without the net net.

[00:01:13] Speaker 01:
The lower court erroneously changed the standard into a conjunctive test.

[00:01:19] Speaker 01:
It said that the

[00:01:22] Speaker 01:
Importer needed to satisfy both the Dedicated solely for use test and the integral to the function test that was incorrect because this court's decision in the borrowing case made it absolutely clear that the importer only needs to satisfy one test in that case it was the

[00:01:43] Speaker 03:
You do not dispute that the integral to the function test is not satisfied here?

[00:01:53] Speaker 01:
We do.

[00:01:54] Speaker 01:
We dispute that.

[00:01:55] Speaker 01:
I was going to get to that.

[00:01:57] Speaker 01:
We think that the case is simpler because the lower courts found that the net wrap satisfies the dedicated solely for use test.

[00:02:09] Speaker 01:
And if the court had correctly applied

[00:02:12] Speaker 01:
The disjunctive standard Sure so There are I think a couple of errors that we see in the lower court first was the alternative use of twine instead of netwrap and the cases say that an item is integral to the function and

[00:02:38] Speaker 01:
if it is necessary for one of the functions of the machine.

[00:02:43] Speaker 01:
So that's illustrated by the cases of the, it was a filter adapter for a camera where the filter adapter only was used for color pictures but not for black and white.

[00:02:56] Speaker 01:
And so the camera would still perform its function of taking pictures but black and white, not color.

[00:03:03] Speaker 01:
And then a case of the interchangeable

[00:03:07] Speaker 01:
viewfinders for cameras with interchangeable lenses.

[00:03:11] Speaker 01:
You could use one viewfinder, but that didn't mean that the others were not integral to test because they were integral to function because it was necessary for using one particular lens.

[00:03:29] Speaker 04:
The trade court in the last couple pages of its opinion provided some reasoning that I'm particularly interested in and focused on and it's the notion that

[00:03:42] Speaker 04:
This net wrapping is basically a consumable input of the machine just like the hay is a consumable input and and then the machine takes the inputs and then produces an output and that is a wrapped compressed bale of hay and so

[00:04:03] Speaker 04:
In that way the inputs the hay and the netwrap are not Integral to the function of the machine the machine is capable as is without the netwrap and without the hay of Performing its intended function.

[00:04:20] Speaker 01:
Thank you your honor use the inputs we we do we disagree with that part of the court's ruling as well and

[00:04:30] Speaker 01:
I think the place to the analogy is the MITA copy star case of the toner cartridge for the copying machine.

[00:04:41] Speaker 04:
And the... There's no housing here, right?

[00:04:44] Speaker 04:
Well, there's a cardboard core that holds the...

[00:04:48] Speaker 04:
the Mita and Brother cases, there was some kind of housing for the toner or the ink or whatever it was.

[00:04:56] Speaker 04:
That was structurally compatible with the larger machine.

[00:05:00] Speaker 04:
And so the housings were therefore integrated with the machine to be a delivery system for the things like the toner.

[00:05:08] Speaker 04:
And I just don't see anything the equivalent of that with your merchandise here.

[00:05:17] Speaker 01:
What corresponds to the housing is the cardboard core that the net wrap is wrapped around.

[00:05:21] Speaker 01:
And so it is the cardboard core with the net wrap ominous that is inserted into the bailing machine.

[00:05:29] Speaker 01:
And so the basic distinction is the toner was inside the cartridge.

[00:05:33] Speaker 01:
Here the net wrap is wrapped around the core.

[00:05:37] Speaker 01:
But the cardboard core and the cartridge are analogous.

[00:05:46] Speaker 04:
the role of the cardboard tube inside of the bailing machine.

[00:05:53] Speaker 04:
My understanding is there's a compartment in the bailing machine where you stick this net wrap roll into it and then you dispense out the amount of wrapping you need to wrap the real product, which is the hay.

[00:06:08] Speaker 01:
Well, the cardboard core holds the net wrap and so the

[00:06:15] Speaker 01:
Netwrap couldn't be used and inserted without being on the core.

[00:06:20] Speaker 04:
It's like... Right, but I guess the point I have is that, you know, when it comes to like the typewriter ribbon spool of decorated metal or these cartridges and these other cases, they're all mechanically interacting with the larger machine in order to

[00:06:43] Speaker 04:
Deliver something whether it's toner or typewriter ribbon across the typing zone and and so these structures whether it's the spool that's Mounted on a shaft in decorated metal or whether it's the cartridge in a printer.

[00:06:59] Speaker 04:
That's Cooperating with the rest of the larger machine.

[00:07:02] Speaker 04:
There's structural mechanical interactions there that

[00:07:08] Speaker 04:
There's no evidence of here in this record that is necessary and essential for this cardboard tube to interact with the larger bailing machine to dispense out this wrapping to wrap the bales of hay.

[00:07:24] Speaker 01:
We think, nevertheless, the cardboard car.

[00:07:26] Speaker 04:
And I don't think you argued the cardboard tube below, did you?

[00:07:29] Speaker 04:
I looked at your summary judgment brief, and I didn't see anything like that.

[00:07:35] Speaker 04:
I didn't see anything about a cardboard tube.

[00:07:38] Speaker 01:
Certainly, it was stated in the facts that the cardboard core was there.

[00:07:42] Speaker 04:
Did you argue this as something being an essential part, component of the larger machine in order to deliver the net wrapping in a way that would produce the final product?

[00:07:55] Speaker 01:
I cannot remember.

[00:07:57] Speaker 04:
It's not a long brief, but I read it and I didn't see it.

[00:08:01] Speaker 04:
So then the next question is, can you make these kinds of arguments here?

[00:08:08] Speaker 01:
I believe that we can, because the issue is whether the net wrap is integral to the function of the bailing machine, and we certainly made that argument.

[00:08:24] Speaker 01:
And it was an undisputed fact that the cardboard core is wrapped on the

[00:08:30] Speaker 01:
the net wrap is wrapped around the cardboard core and that that is necessary in order to have it installed into the bailing machine.

[00:08:41] Speaker 03:
Judge Cunningham earlier I think referred to the fact that the bailing machine obviously doesn't need

[00:08:50] Speaker 03:
Any any tying?

[00:08:53] Speaker 03:
Item to do the bailing and then for tying it doesn't need netwrap because it can use twine So how could this be on this integral to the function?

[00:09:05] Speaker 01:
This is the what I would call in short and the interchangeable part issue the bailing machine has multiple functions and

[00:09:16] Speaker 01:
One of its functions is to wrap the bales with net wrap.

[00:09:20] Speaker 01:
And it cannot perform that function without net wrap.

[00:09:26] Speaker 01:
It's like the camera doesn't need the filter adapter to take black and white pictures.

[00:09:32] Speaker 01:
But in order to take color pictures, it needed the filter adapter to wear.

[00:09:37] Speaker 03:
Where in that situation?

[00:09:39] Speaker 03:
I don't have the case in mind.

[00:09:41] Speaker 03:
But where in that situation is the equivalent of a twine?

[00:09:45] Speaker 01:
Swine is the absence of the filter for black and white.

[00:09:58] Speaker 03:
And does it matter here that while I gather it is either agreed or found or that this netwrap is never used except

[00:10:12] Speaker 03:
in conjunction with its delivery by one of these machines.

[00:10:18] Speaker 03:
But it is, of course, used for a long period after it emerges from the machine.

[00:10:24] Speaker 03:
So it's not under what Bauerlin, it's not like the canopy and the car seat, I think that's what that was, where the use is for all time in conjunction with the thing of which it is a part.

[00:10:40] Speaker 03:
This is just

[00:10:42] Speaker 03:
you need to deliver it, but after that, it's going to sit out in the field or wherever these bales sit.

[00:10:48] Speaker 01:
Well, there we think that the net wrap is analogous to the toner from the copying machine, so that the toner is imprinted onto the paper, and the paper is discharged.

[00:11:00] Speaker 01:
And the image created by the toner stays on the paper as long as the paper lasts, just in the same way that the net wrap remains wrapped around the bale.

[00:11:10] Speaker 04:
The toner is part of the machine?

[00:11:13] Speaker 01:
The toner in the cartridge is, the toner cartridge, the cartridge containing the toner is part of the copying machine.

[00:11:19] Speaker 04:
I thought the analysis was really more focused on the cartridge and how the cartridge cooperates with the other part of the machine to create the larger machine to perform its intended function, which is to deliver ink onto paper so that you have documents.

[00:11:40] Speaker 01:
The alternative classification in the copy star case was based on the classification of the toner not the cartridge and so our Position is that the the cartridge is analogous to the cardboard core the toner is analogous to the netwrap and So the netwrap like the toner and the paper is analogous to the head

[00:12:05] Speaker 04:
What if there was no cardboard tube?

[00:12:07] Speaker 04:
Would you still say that your role of netwrap is part of the bailing machine?

[00:12:15] Speaker 01:
That would be a much more difficult issue, which I haven't fully considered.

[00:12:19] Speaker 01:
But let's assume that it might not be.

[00:12:25] Speaker 04:
OK, so it comes down to the cardboard tube.

[00:12:28] Speaker 01:
Right.

[00:12:30] Speaker 01:
That is, of course, we've been discussing the integral to the function

[00:12:34] Speaker 01:
branch of the legal standard.

[00:12:37] Speaker 01:
It is undisputed that that draft satisfied the other dedicated solely for use test, and the court, I think, correctly reached that result.

[00:12:49] Speaker 01:
It clearly determined

[00:12:50] Speaker 01:
that the sole use of the net wrap.

[00:12:52] Speaker 04:
What would be wrong if we said, well, it's not quite dedicated solely for use with this machine because it's got another, maybe even more important use, which is when it's wrapped around the bales of hay out in the field or on the truck to deliver the bales of hay from point A to point B. And that's really the ultimate important role of this wrap.

[00:13:16] Speaker 01:
we think this analogous to the function of the toner in the toner cartridge that creates the image that stays on the paper just and the perhaps the other point to make in the under the cases on the dedicated solely for use test the there the the court distinguished the

[00:13:44] Speaker 01:
will be case of the tripods.

[00:13:48] Speaker 01:
And one important point was that tripods were using private support to the counter.

[00:13:55] Speaker 01:
And the court mentioned in Willoughby that similarly, a piano bench supports the pianist, but is not part of the piano.

[00:14:03] Speaker 01:
The typewriter table supports the typewriter, but is not part of the typewriter.

[00:14:10] Speaker 01:
And so the entire distinction that

[00:14:13] Speaker 01:
This is not this is a separate and commercial entity doesn't apply because that's really limited to the commercial to the support function as in the For the tripod and also tripods good So it is that

[00:14:42] Speaker 01:
It is dedicated solely for use with the bailing machine.

[00:14:47] Speaker 01:
It's not a separate and distinct commercial entity, because that is the distinction made at Bauerlein Incorporated, the Willoughby case, where it said that the tripod was a separate and distinct commercial entity, because it could support other things other than the camera.

[00:15:10] Speaker 01:
And here, the netwrap is used

[00:15:12] Speaker 01:
Solely with the with the veiling machine just in the way that the the Cannabis in the borrowed in case we use solely with the child seats Do you agree we don't need to reach your prevailing classification issue

[00:15:38] Speaker 01:
If I understood your question you're asking if you disagree with the parts classification Then we don't you don't need to reach the competing because you only reach that if you're comparing you to I Think you're your time is up.

[00:15:58] Speaker 03:
We'll restore some rebuttal time.

[00:16:00] Speaker 03:
We should hear from Mr.. Make it.

[00:16:03] Speaker 03:
Thank you

[00:16:20] Speaker 02:
Good afternoon, your honors.

[00:16:22] Speaker 02:
Luke Mathers for the United States.

[00:16:24] Speaker 02:
Netwrap is not a part of a hay baling machine.

[00:16:27] Speaker 02:
It's a warp-knit textile that's consumed by a hay baler to create a product, baled hay.

[00:16:34] Speaker 02:
That makes Netwrap a separate and distinct commercial identity from a hay baler.

[00:16:38] Speaker 02:
It's a consumable material, not a part, just as a roll of film isn't part of a camera.

[00:16:45] Speaker 02:
This court's predecessor in the Customs Court have held that the most analogous materials to netwrap bail ties and bail twine are also not parts of hay balers.

[00:16:59] Speaker 02:
Yeah, absolutely.

[00:17:00] Speaker 02:
Meade is probably their best case, but I think it actually helps the government's position here.

[00:17:04] Speaker 02:
The first point is one that Judge Chen brought up as well, which is that Meade is classifying the toner cartridge and not just the toner within it.

[00:17:11] Speaker 02:
That's an important distinction that the trade court picked up on as well.

[00:17:14] Speaker 02:
The toner cartridge is a delivery system for toner within the copier.

[00:17:19] Speaker 02:
And the other important point there, too,

[00:17:21] Speaker 02:
is that the toner cartridge stays within the machine, the copier, throughout its useful life.

[00:17:27] Speaker 02:
The toner cartridge isn't expelled every time you print a piece of paper out.

[00:17:31] Speaker 02:
But that's not like what we have here with the net wrap.

[00:17:34] Speaker 02:
It's being cut, fit over a bale of hay, and then ejected to serve its useful purpose of protecting the hay for storage and transport.

[00:17:42] Speaker 00:
Actually, I took it away from something I was interested in.

[00:17:43] Speaker 00:
You were talking about twine.

[00:17:45] Speaker 00:
Can you go back to that?

[00:17:46] Speaker 00:
I don't want to forget that part, too.

[00:17:48] Speaker 02:
No, absolutely.

[00:17:49] Speaker 02:
Thank you, Your Honor.

[00:17:50] Speaker 02:
You know, twine's an analogous material.

[00:17:52] Speaker 02:
Netwrap was, I think it was created back in the 80s to replace twine as a material in baling hay.

[00:17:57] Speaker 02:
It's performing the same exact function that it was performing in George William Ruff, which is the Customs Court case from 1952.

[00:18:05] Speaker 02:
So it's really just a consumable input is the way that we would put it, just like a spool of thread.

[00:18:11] Speaker 02:
And just to address the cardboard core point, we do think that that argument is forfeited.

[00:18:16] Speaker 02:
It wasn't raised below.

[00:18:18] Speaker 02:
But even if you were to address that, I just want to point out that note 1C to section 16, which covers heading 8433,

[00:18:27] Speaker 02:
specifically excludes cores and similar supports of any material from classification under heading excuse me any heading in chapter 16 which would include heading 84 33 and so if that stop it from being apart because it was separate from being classified within heading 84 33 it

[00:18:50] Speaker 02:
Meaning it would be outside of the scope of the parts section of the provision that council's relying on.

[00:18:58] Speaker 02:
So nothing that is a core or similar support of any material can be classified under Heading 8433.

[00:19:04] Speaker 02:
And so you could just think of that as it's not considered a part or it's excluded, even if it were a part from being classified.

[00:19:10] Speaker 04:
What if this netwrap was on a spool?

[00:19:13] Speaker 02:
That would be the same outcome.

[00:19:14] Speaker 02:
It would also be excluded.

[00:19:16] Speaker 04:
With those big,

[00:19:18] Speaker 04:
circular discs on the end of the spool kind of holding the net wrap in place and then the spool is mounted on some shaft and then and Then the net wrap is coming off, but the spool then becomes something akin to a delivery system wouldn't that then the the spool of net wrap be considered a part of the bailing machine and

[00:19:44] Speaker 04:
If the spool just like in decorated metal where the spool of typewriter ribbon was deemed to be a part of the typewriter

[00:19:52] Speaker 02:
Well, I'll deal with typewriter ribbons in a second, because there's a point I want to make about that.

[00:19:55] Speaker 02:
But if it were more than just to support, then I would agree that it would be doing something, you know, mechanically interacting with the machine, as you put it.

[00:20:02] Speaker 02:
That would be a different case.

[00:20:04] Speaker 02:
It's not the case that we have here, because I believe the only interaction that the cardboard core has with the hay baler is it's being attached with claws, or it's being mounted like a paper towel, wood on a paper towel holder.

[00:20:16] Speaker 02:
But just to the typewriter ribbon point, I would also point out that note 1Q to section 16 explicitly says that typewriters or similar ribbons, whether or not in spools or in cartridges, are classified according to their constituent material.

[00:20:29] Speaker 02:
So they're also excluded from classification as a part of a typewriter.

[00:20:33] Speaker 02:
And I think it's one of the dangers of relying on some of these analogies.

[00:20:36] Speaker 04:
Are you saying decorated metal is no longer good law?

[00:20:39] Speaker 02:
If it classified a typewriter ribbon as a part of a typewriter, then yes, it's no longer good law.

[00:20:43] Speaker 04:
What if it's a spool?

[00:20:45] Speaker 02:
the same problem.

[00:20:47] Speaker 02:
If it's a spool, if it's just a spool... I mean, that was the portal in decorated metal.

[00:20:51] Speaker 04:
Whatever that merchandise was, it was a spool of typewriter ribbon and it was deemed to be a part of the typewriter.

[00:20:58] Speaker 02:
To the extent that the spool is driving the classification and the spool were just a support, then it would be excluded.

[00:21:03] Speaker 02:
But if it were more than that, it's possible that it would be correctly classified as a part.

[00:21:07] Speaker 02:
But you don't have to get into any of that here, because again, the cardboard core is just performing this passive function.

[00:21:12] Speaker 02:
It's what the netwrap is being wrapped around.

[00:21:15] Speaker 02:
And there wasn't, again, any of this argument below as to the cardboard core.

[00:21:19] Speaker 02:
So it's all forfeit anyway.

[00:21:25] Speaker 02:
And just to talk about Baueran briefly, I think the trade court reasonably read Baueran, that you have some cases that fall on the Willoughby line and some cases that fall more along the lines of Pompeo.

[00:21:37] Speaker 02:
We have obviously Wilbur Ellis and George William Ruff, which both follow that Willoughby line and classify the most analogous materials that we have to the material here.

[00:21:47] Speaker 02:
But again, you don't need to delve into any of that.

[00:21:50] Speaker 02:
Get into disjunctive conjunctive the bottom line point is that the netwrap is a consumable material that becomes Incorporated within the product of the machine.

[00:22:00] Speaker 04:
Well if there's two available tests Then don't we have to?

[00:22:05] Speaker 04:
Consult both of them to see whether or not this particular merchandise qualifies as a part.

[00:22:10] Speaker 02:
I think you do yes absolutely so

[00:22:14] Speaker 04:
But you can satisfy either one of them, and then you'll be considered a part.

[00:22:19] Speaker 02:
Yes.

[00:22:21] Speaker 02:
But dedication for use isn't the end of the inquiry.

[00:22:25] Speaker 02:
I appointed this court's decision in Baxter Health Care Corp, which came two years after Bauer.

[00:22:32] Speaker 02:
It concluded that it was a monofilament at issue in that case that was being incorporated into oxygenators.

[00:22:38] Speaker 02:
The monofilament was dedicated for use in the oxygenators, but that wasn't the end of the inquiry.

[00:22:43] Speaker 02:
The court still said that's actually still a material because it hasn't been cut to size yet, basically.

[00:22:49] Speaker 02:
So it's not the end of the inquiry.

[00:22:51] Speaker 02:
under the HDSES whether there is dedication for a particular use.

[00:22:55] Speaker 02:
And as pointed out, the life of this netwrap continues outside the machine as well.

[00:23:04] Speaker 02:
So it's, yes, you're never gonna use the netwrap without a hay baler, but its life, its use continues beyond its containment.

[00:23:10] Speaker 03:
You're never gonna use it without having used the hay baler.

[00:23:14] Speaker 02:
Correct, exactly.

[00:23:15] Speaker 03:
This business about connection with is a word that is doing

[00:23:21] Speaker 03:
a number of different things, some of which are probably applicable and some of which are not.

[00:23:25] Speaker 02:
Right.

[00:23:25] Speaker 02:
And I think maybe we were less than precise in formulating it below and in our briefs.

[00:23:29] Speaker 02:
But I think that's the bottom line conclusion that you should reach here.

[00:23:33] Speaker 02:
Unless there were further questions, we'll ask you for them.

[00:23:38] Speaker 03:
Thank you.

[00:23:44] Speaker 03:
Three minutes.

[00:23:45] Speaker 03:
There we go.

[00:23:51] Speaker 01:
Thank you, your honor.

[00:23:52] Speaker 01:
I will just take a couple of minutes.

[00:23:54] Speaker 01:
First, I wanted to respond to the point about the Baxter case.

[00:24:00] Speaker 01:
One of the issues is whether the monofilament was finished article.

[00:24:04] Speaker 01:
And that's not in dispute here.

[00:24:06] Speaker 01:
It's not disputed.

[00:24:07] Speaker 01:
The net wrap is a finished good.

[00:24:10] Speaker 01:
It doesn't need further processing.

[00:24:11] Speaker 01:
In Baxter, the monofilament needed further processing, and that is why it was not a part.

[00:24:19] Speaker 01:
The government council also mentioned

[00:24:21] Speaker 01:
The old cases of the bailing wire and the bailing twine.

[00:24:26] Speaker 01:
And those are distinguishable because of the change in technology on the bailing machines.

[00:24:33] Speaker 01:
In the original case of the bailing wire, the bailing machine simply held the bale in place.

[00:24:40] Speaker 01:
And it had to be attached manually by the farmer.

[00:24:43] Speaker 01:
Here is the machine itself that wraps the net wrap around the bale.

[00:24:50] Speaker 01:
And so the netwrap and the bailing machine together contribute to the function of wrapping the bail with the netwrap.

[00:25:01] Speaker 01:
And then simply to conclude, we reiterate that the lower court committed reversible error by applying the incorrect two-part test, applying both standards, where we only needed to satisfy the first standard, the dedicated solely for use test,

[00:25:19] Speaker 01:
which the lower court determined that the importer did satisfy.

[00:25:25] Speaker 01:
Thank you.

[00:25:27] Speaker 03:
Thank you for your argument.

[00:25:27] Speaker 03:
Thanks to all counsel.

[00:25:29] Speaker 03:
The case is submitted.