text:
    William N. BENNETT, Appellant, v. Rudolph M. SEROTA, Appellee.
    Patent Appeal No. 8782.
    United States Court of Customs and Patent Appeals.
    May 24, 1973.

      Morris I. Pollack, attorney of record, for appellant.
    John W. Renner, Charles B. Lyon, Donald D. Jeffery, Cleveland, Ohio, attorneys of record, for appellee.
    Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges.
   ALMOND, Senior Judge.

This is an appeal from the decision of the Board of Patent Interferences awarding priority of invention to Serota, the junior party, as to two counts relating to an apparatus for heating a traveling web of dielectric material such as paper. We affirm that decision.

The senior party Bennett became involved in this interference on his application serial No. 368,455 filed May 15, 1964. Serota became involved on his application serial No. 499,754 filed October 21, 1965, a continuation-in-part of an earlier application, serial No. 385,130, filed July 27, 1964.

At final hearing before the board, the attorney for Bennett stated that Bennett relied for priority solely on the filing of his application. Accordingly, the board restricted him to his May 15, 1964 filing date for both conception and constructive reduction to practice. The board held that Serota, as junior party, had met his burden of proof by showing an actual reduction to practice- in January 1964. The board also held that Serota was entitled to prevail for the reason that Bennett was not an original inventor. In its view, the evidence was sufficient to show derivation of the invention by Bennett from Serota.

The Subject Matter

As originally declared, the interference involved a single count which corresponded to claim 34 of the Bennett application and claim 3 of Serota’s application. Later a second count was added at the instigation of Serota. This count is in some respects broader than count 1. Since it is our view that. Serota was entitled to priority as to count 1, we need not consider his allegation of an even earlier reduction to practice of count 2.

Count 1 reads as follows (subparagraphing ours):

1. Apparatus for heating a traveling web of dielectric material comprising
a grounded metal frame,
a first capacitor plate fixedly mounted on said frame,
a first series of horizontal electrode rods disposed transversely to the direction of travel of said web and carried by said first capacitor plate above the latter and in electrical connection therewith,
a second series of electrode rods interpose between and parallel to said first series of electrode rods and lying in the same horizontal plane, said second series of electrode rods being grounded to said frame,
means for vertically adjusting said frame and thus said electrode rods to .variably position the same relative to said traveling web,
a second capacitor plate mounted on said movable frame below said first capacitor plate, .
said second 'capacitor plate being connected to a source of high frequency electrical energy,
means for vertically adjusting said second capacitor plate relative to said first capacitor plate thereby to vary the current in said first capacitor plate and in said electrode rods.

A basic structure upon which this claim will read is shown in figures 1 and 2 of the Serota application which are reproduced below:

In those drawings rods 40 and 44 are electrodes. Rods 40 are grounded to the frame, whereas rods 44, in the same plane as rods 40, are connected to a fixed capacitor plate 42 which is insulated in its mounting in frame 10. There is also provided a second capacitor plate 46 which can be adjusted vertically to vary the distance between it and plate 42. The adjustable capacitor plate is connected to the ungrounded terminal of a source of high-frequency electrical energy. The frame itself can be raised or lowered relative to the web of dielectric material passing over it.

In operation, a high-frequency voltage is delivered to the adjustable plate which induces voltage in the fixed plate and rods 44. This voltage creates a difference in potential between rods 44 and 40 thereby generating an electric field between them which is in the same plane as a web (not shown) passing over the electrodes. This electric field creates the dielectric heating effect in the web.

Record

The record establishes that Serota began investigating the phenomenon of dielectric heating as early as 1959. During that time he designed a test apparatus for drying continuous webs of dielectric material. This apparatus was used to demonstrate to potential customers the feasibility of using dielectric heating for drying webs. Although not intended for commercialization, this test rig is the basis of Serota’s claim to a reduction to practice of count 2.

This apparatus was in fact a modified conventional dielectric oven. Two sets of electrode rods were assembled so that one set was interposed and in the same plane as the other, as is called for by count 1. The assembled electrodes were inserted in the oven in a way that one set was grounded and the other insulated from the oven which functioned as a frame. The electrode assembly included a capacitor plate located above and parallel to the plane of the electrode rods. It was electrically connected to one set of electrode rods and functioned in the same way as that of the first capacitor plate of count 1. However, it will be noted that in count 1 this plate is below the electrode rods. Above this plate was a second capacitor plate, a part of the oven, which could be energized and adjusted vertically relative to the first plate by means of a pulley arrangement. In operation the web to be dried passed over the electrode rods. The board said of this device:

* * * we find that the structure shown in those exhibits, shown in one exhibit in use with a conventional oven, does not support the counts here in issue. We note, however, that the applicator included a system of alternately grounded and energized electrodes all in a single plane disposed to one side of the web of material to be dried, as in the invention in issue.

In addition, we note that this structure also embodies the concept of a fixed capacitor plate in which a voltage can be induced by a movable capacitor plate. However, of necessity the web had to pass over the rods but under the first capacitor plate. That Serota was indeed the originator of this apparatus was corroborated by testimony of his assistant, Zimmerly.

The record further reveals that Serota traveled to the Fitchburg Paper Co., the assignee of the Bennett application, at its request to discuss the acquisition by Fitchburg of some radio frequency generating equipment from Young Brothers Co., Serota’s employer and assignee of his application. This trip took place on April 10, 1963.

Serota testified that on this visit he met Bennett, his adversary in this case, and learned that Bennett was constructing some sort of dielectric heating apparatus for Fitchburg that required the generating equipment referred to above. When it was learned that Young Brothers could not provide this equipment, Serota was engaged to be a consultant for Fitchburg.

Serota further testified that Bennett’s apparatus, which he saw on this or a later trip, was the same as that illustrated in a patent Bennett later acquired, U.S. 3,266,164 (Exh. 7). This device is quite different from that which is involved in this interference. In particular, the electrode rods do not lie in the same plane. Instead, they are in parallel rows and offset from each other. Because of this arrangement, the web to be dried had to pass between the rows of electrodes rather than over them. We also note that this apparatus did not use a pair of capacitor plates, one of which is movable relative to the other. That Bennett was engaged at this time in building such an apparatus is corroborated by the testimony of Bennett’s witness LaBlanc.

The record further reveals that Serota made numerous visits to Fitchburg after his retention as a consultant. LaBlanc testified that Serota went to Fitchburg over the years 30 or 40 times, and that their first meeting was in 1963. Serota testified that, as a result of his association with Fitchburg, it was decided that Serota and Young Brothers would “design and build” a unit to replace the one he had seen at Fitchburg, for the reason that the parties had been unable to make the Bennett apparatus work successfully.

Although Serota was unable to say precisely when this decision was made, he submitted various documents (Exhs. 11-15, 17, 18) to substantiate this claim and which indicate that an apparatus was eventually shipped to Fitchburg. The board summarized these exhibits as follows:

(1) A letter directed to Fitchburg, dated October 2, 1963, signed by Serota, confirms discussions had previously with respect to an applicator system with price quotations. (Exh. 15). This letter indicates that Young Brothers Company was
“to design and build an applicator which will have all electrodes under the paper —. Applicator to have variable output control Bottom section shall be capable of lowering —.”
(2) A purchase order No. 18485 by Fitchburg, (Exh. 13) dated October 22, 1963, directed to Young Brothers Co., referring to the above-noted letter of October 2, 1963, listing various items and finishing:
“All in accordance with your letter and discussion between our Mr. Bennett and your Mr. Serota.”
This bears an indication of receipt by Young Brothers Co. on October 25, 1963.
(3) and (4) Two sales orders (Exhs. 11, 12) on Young Brothers Co. forms, dated October 26, 1963, relating to the work to be done under the above-noted order,
(5) A letter (Exh. 17) dated December 24, 1963, from Serota to Schreiber of Fitchburg with respect to shipping a unit on Monday, December 30, 1963, to be delivered January 2, 1964
(6) Another letter (Exh. 18) from Brigham of the Traffic Department of Young Brothers Co., dated December 27, 1963, to Fitchburg referring to their order number 18485 and indicating shipment to be on December 30.
(7) An invoice (Exh. 14) from Young Brothers Co., No. 7063 dated December 31, 1963 referring to Fitchburg’s order, indicating that shipment had occurred.

Serota also testified regarding a drawing (Exh. 21) prepared by one Williamson and dated October 31, 1963. He identified the drawing ás “an assembly drawing of the prototype electrode system designed and built for Fitchburg Paper.” He further stated that it was a drawing of the apparatus shown in photographs taken before and after shipment from Young Brothers and installation at Fitchburg (Exhs. 16, 19, 20).

The board characterized this drawing as being identical to that of figures 1-3 of Serota’s application but for a minor omission and said:

We find further that the structure shown in detail in those figures of the Exhibit 21 drawing clearly and adequately support the language of both counts to the same extent that the structure illustrated in the application drawings does and we note that no question as to Serota’s right to make the counts in issue has been raised in this case.

It was after its review of the record, a more extensive one than our summary, that the board held that Serota had proved by a preponderance of the evidence that he had reduced the invention to practice in January 1964 and that Bennett had derived the invention from him. Appellant attacks this decision on the grounds that (1) Serota failed in his burden of proof in the sense that there was insufficient corroboration of his own testimony, (2) Serota failed to prove conception and reduction to practice, and (3) there was no basis for the board’s conclusion that Bennett had derived the invention from Serota.

Opinion

Inasmuch as we agree with the board that Serota proved a reduction to practice in January of 1964, we do not find it necessary to reach the question of derivation.

Appellant’s principal attack on the board’s decision is that it relied too heavily on Exhibit 21, the drawing by Williamson. It is apparently his view that the board regarded that drawing as proving Serota’s reduction to practice. We believe that this misconstrues the board’s decision.

We first note that the board referred to the reduction to practice as occurring in January 1964 and it is our opinion that there was clearly a reduction to practice at that time embodied in the unit installed and tested at Fitchburg. In fact, appellant’s preliminary statement relied upon that unit as a reduction to practice on his behalf and thus constitutes an admission that the unit supported the count, thus corroborating Serota’s testimony and exhibits notwithstanding the fact that appellant later chose to rely solely upon his application for priority.

It is our view that unlike the usual interference ease the question to be resolved is not whether there was a reduction to practice but whether the reduction to practice was Serota’s. Of course, for Serota to prevail this must be shown by a preponderance of the evidence and where that evidence relies upon Serota’s testimony, it must be corroborated. Rodin v. Spalding, 297 F.2d 256, 49 C.C.P.A. 870 (1962); Hasselstrom v. McKusick, 324 F.2d 1013, 51 C. C.P.A. 1008 (1963).

The evidence, when seen in perspective, we think is sufficient to meet appellee’s burden of persuasion which is to show by a preponderance of the evidence that the reduction to practice in January 1964 was of his invention. The record shows that Serota was early involved in the design of dielectric heating equipment and devised an apparatus similar in many respects to that shown in the drawings of his application. When Bennett arrived on the scene at a later date, the only device which the record shows to be his own was of a significantly different type from that involved in the counts.

The record further shows that Serota’s employer was requested to “design and build” an apparatus for Fitchburg when Bennett’s device could not be made to operate successfully. This request was followed by the reduction to practice already discussed above.

Corroboration included the testimony of Zimmerly and LaBlanc, the documents discussed by the board, and Williamson’s drawing. Appellant objected that Williamson himself was not called to corroborate the drawing. However, we note that there was no challenge to the authenticity of the drawing. Thus, considering the purpose for which the drawing was used in the evidentiary scheme, testimony by Williamson would be cumulative at best, and we consider this omission to be of no consequence.

From this evidence we think it was logical and, therefore, proper to infer that Serota was the inventor of the January 1964 device. Appellant argues that the corroboration is insufficient. However, this court observed in Hasselstrom, supra,

* * * the purpose of corroborative evidence is to confirm and to strengthen the testimony of the inventor. Obviously the amount and quality of corroborative evidence that is necessary in any given ease will vary with the facts of that ease. [Citation to footnote omitted.]

We are satisfied that were it not for the vendor-vendee relationship of the parties, the evidence produced by Serota would without question support his claim to priority. We see no reason to reach a different result merely because of that relationship. For his part, appellant, as noted by the board, has not put forth a case to contradict that put forth by Serota even though if contrary evidence existed it was peculiarly within his province to produce it. Furthermore, any additional corroborative evidence for Serota would no doubt have to come from appellant who is his adversary in this contest. A degree of corroboration that is impossible is not required. Hurwitz v. Poon, 364 F.2d 878, 53 C.C.P.A. 1502 (1966).

The “law” on what constitutes sufficient corroborative evidence is a rule of reason. Anderson v. Pieper, 442 F.2d 982, 58 C.C.P.A. 1221 (1971) and cases cited therein. We believe that application of that rule of reason to the facts of this case requires the conclusion that the evidence discussed above is sufficient corroboration of the testimony of Serota.

In view of the foregoing, we conclude that the board did not err in awarding priority to Serota. Accordingly, that decision is affirmed.

Taxation of Costs

Appellee in this case requested that the brief for Bennett before the Board of Patent Interferences be added to the record with the praecipe making the request. We do not believe that addition to the record was necessary for a fair understanding and consideration of the issues presented in this ease. Accordingly, the cost of printing this brief and praecipe is assessed against the party Serota.

Affirmed.

      . Dielectric material is defined as “A material that can serve as an insulator because it has poor electrical conductivity. * * * A dielectric undergoes electric polarization when subjected to an electric field.” J. Markus, Electronics and Nucleonics Dictionary (3d ed. 1966).

      . Dielectric heating is defined as “The heating of a nominally insulating material by placing it in a high-frequency electric field.” Id.


source: Caselaw Access Project

author: MARKEY, Chief Judge.

license: Public Domain

text:
    Application of Daniel D. ROTH and Robert M. Hall.
    Patent Appeal No. 8968.

    United States Court of' Customs and Patent Appeals.
    June 7, 1973.

      Eugene F. Buell, Pittsburgh, Pa., Buell, Blenko & Ziesenheim, Pittsburgh, Pa., attorneys of record, for appellants.
    S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Jere W. Sears, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   MARKEY, Chief Judge.

This appeal is from the decision of the Board of Appeals affirming the rejection of claims 1-6 of appellants’ application serial No. 328,772, filed November 20, 1968, entitled “Surgical Drills.” We affirm.

Appellants’ invention relates to an air-powered surgical turbine or drill. In particular, a brake means stops rotation of a turbine shaft upon release of an air valve lever controlling the driving of the drill. The details of the invention have been described in a previous interference with a patent to DeGroff, DeGroff v. Roth and Hall, 412 F.2d 1401, 56 CCPA 1331 (1969). The disclosure of DeGroff described in that opinion is substantially the same as the applicable portions of appellants’ present specification.

Claim 1, with pertinent portions underlined, is representative of the claims on appeal.

1. A surgical drill comprising an elongated housing, a shaft journaled axially in the housing, turbine means on said shaft within said housing, inlet means in the housing receiving air pressure from a source of high pressure air, valve means between said inlet means and said turbine means for regulating the flow therebetween, chuck means at one end of the shaft adapted to removably frictionally receive the shank of a cutting tool, brake means acting on the shaft normally engaging said shaft when the air valve is closed, valve operating means on the housing and cam means operated by the valve operating means to release the brake means substantially simultaneously as the .valve means is opened.

The pertinent portion of count 2 of the interference (claim 2 of the DeGroff patent) is:

a normally applied brake for said shaft, * * * [a valve] control lever upon initial depression cooperating with said brake to release the same and thereafter upon further pressure to open said control valve in proportion to the degree of pressure applied to said control lever * * *.

We determined in that interference, wherein the issue was originality, that appellants had disclosed to DeGroff the use of a hand-operated valve control lever as a throttle for the drill and had made “the suggestion that a brake be provided.” We further stated:

However, the disclosure was of such lever as a throttle only and not as a control for a brake also, much less as a means for providing the particular cooperative relationship of throttle and brake defined in the counts.

The sole issue determinative of this appeal is whether the DeGroff patent is available as a reference under 35 U.S.C. § 102(e). The board so held, giving as its reasoning:

-x- * * appellant has brought before us no claim which recites the brake means in terms sufficiently broad to be consistent with what the court held to be the scope of the invention which appellants transmitted to DeGroff. We agree with the examiner’s position in effect that all of the appealed claims recite the brake means in such details as to bring these claims within the scope of the court’s reasons for finding priority in DeGroff as to the interference counts.

OPINION

Appellants contend that they “were the first to conceive the generic invention involved in the claims here on appeal and that Roth et al. disclosed all of the generic invention to DeGroff.” As evidence that the subject matter of the appealed claims antedate the DeGroff patent, appellants assert that:

* * * the testimony and decisions of the Board of Interference Examiners and the Court of Customs and Patent Appeals and the Preliminary Statement of Applicants are equivalent for the purposes here involved of a Rule 131 Affidavit.

The solicitor states that “[t]he appealed claims do not recite a brake broadly in any ‘generic’ sense.” That is manifestly correct. Not only do the appealed claims recite a specific relationship between the “valve operator means” and a specific “brake means acting on the shaft normally engaging said shaft means,” but they additionally recite a “cam means” to effect this relationship.

The evidence in the previous interference was held to be insufficient to show appellants were the first to invent any specific brake details such as recited in the counts. In the present case we again find no factual showing that the specific brake details of the appealed claims were invented by appellants prior to the filing date of the reference patent. Appellants’ reliance on selected portions from the record of the previous interference plainly does not amount to the required factual showing. Accordingly, the disclosure of the DeGroff patent is available as a reference under 35 U.S.C. § 102(e) and as such, it anticipates the appealed claims.

The decision of the board is affirmed.

Affirmed.

      . Patent No. 3,128,070, filed March 4, 1963, issued April 7, 1964.


author: BALDWIN, Judge.

text:
    60 CCPA
    Wayne WITHROW and Conrac Division of Giannini Controls Corp., Appellants, v. The UNITED STATES, Appellee.
    Customs Appeal No. 5482.
    United States Court of Customs and Patent Appeals.
    May 24, 1973.
    Glad & Tuttle, Los Angeles, Cal., attorneys of record, for appellants. Robert Glenn White, Los Angeles, Cal., of counsel.
    Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Gilbert Lee Sandler, New York City, for the United States.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   BALDWIN, Judge.

This appeal is from the decision and judgment of the Customs Court overruling appellants’ protest against the classification of merchandise comprising certain television picture tube glass bulbs, imported in 1965, 1966 and 1967, under item 547.37, TSUS, as glass envelopes, without fittings, for vacuum tubes. Appellants claim classification either as parts of cathode ray tubes under item 687.50, TSUS, when imported prior to December 5, 1965, the effective date of the Tariff Schedules Technical Amendments Act of 1965, Section 2(a), (Pub.L. 89-241) or as parts of other electronic tube^, under item 687.60, TSUS, when imported after the effective date of that amendment.

The pertinent statutory provisions are:

The pertinent statutory provisions are:
Classified under:
Tariff Schedules of the United States: Schedule 5, Part 3, Subpart C:
Glass envelopes (Including bulbs and tubes), without fittings, designed for electric lamps, vacuum tubes or other electrical devices:
* * * * * *
Item 547.37 Other ............25% ad val.
Claimed under:
Tariff Schedules of the United States: Schedule 6, Part 5:
Electronic tubes (except X-ray tubes); photocells; transistors and other related electronic crystal components; mounted piezo-electric crystals, all the foregoing and parts thereof:
Item 687.50 Cathode-ray tubes, and parts thereof ..........12% ad val.
Tariff Schedules of the United States: Schedule 6, Part 5, as amended by the Tariff Schedules Technical Amendments Act of 1965, T.D. 56511:
Electronic tubes (except X-ray tubes); photocells; transistors and other related electronic crystal components; mounted piezo-electric crystals; all the foregoing and parts thereof:
Television picture tubes
* * * * * *
Item 687.60 Other ...........12V2% ad val.

The merchandise consisted of funnel-shaped glass bulbs used to produce cathode-ray tubes used in the television industry. Fused in the funnel part was a button-sized piece of metal, known as an “anode button” and serving to permit passage of voltage into the cathode ray tube to supply an anode to be provided therein.

The sole issue is whether the imported bulbs were “without fittings” as required by the prefatory heading to Item 547.37.

Neither party has alleged that a commercial definition of “fittings” as used here either exists or controls. Nor is there any evidence in the legislative history of Item 547.37 of a particular meaning for the term. The common or dictionary meanings are relatively uninformative as evidenced by the following examples:

fitting la: something used in fitting up * * * b: a small often standardized part (as a coupling, valve, gauge) entering into the construction of a boiler, steam, water, or gas supply installation or other apparatus— usu. used in pi.; see GAS FITTING, PIPE FITTING * * *. [Webster’s Third New International Dictionary (1961).].
fitting n. 1. The act of adjusting or connecting properly. 2. Any article of permanent equipment or adjustment: used generally in the plural, as including fixtures and apparatus; as, gas-fittings; steam-fittings * * *. [Funk and Wagnalls New Standard Dictionary (1965).].

Each party called one witness. More-land, for appellant, was an official of the company who had wide experience with cathode ray tubes and their uses. Appellee’s witness, Steierman, was manager of the television products division of Owens-Illinois, a large producer of cathode ray tube bulbs, and was thoroughly experienced in his field. Both substantially agreed that completing the imported envelopes into cathode ray tubes included cleaning out the bulb; applying a phosphor to the inner face of the tube; applying a coating of aluminum over the inside; putting a conductive coating from the button down through the neck of the tube; assembling the electron gun structure into the neck of the tube and sealing it; and evacuating it.

In response to questioning concerning the anode button and the term “fitting,” Moreland testified:

Q. In the cathode ray tube industry is there anything on a cathode ray tube known as a fitting? A. There are on some tubes more than one thing. This is always called a fitting, this button. Sometimes the tubes have bases which are placed on them later and which is also considered a fitting.
Q. What do you consider a fitting to be in the electronic tube industry? A. A connecting means of some kind.
Q. What function does the button on Plaintiff’s Exhibit 1 serve? A. It connects, serves as a means of making an electrical connection through the glass of high voltage which is generated external to the tube to get that inside the tube.
Q. Will you tell me, is the purpose of that connection for means of manufacturing or for means of use with a tube after it’s completed? A. For the means of use of the tube after it’s completed.
Q. Have you had any experience with glass envelopes for electronic tubes other [than] cathode ray tubes? A. No direct experience. I have visited many plants where these tubes of various types are made and observe them. I have not been actually myself engaged in the manufacture of tubes other than cathode ray tubes.
Q. One last question: in your knowledge, your personal knowledge and experience in the industry, is the button on Plaintiff’s Exhibit 1 known as a fitting ? A. Yes.

Steierman expressed the opinion that the anode button is not “a fitting on a glass bulb,” giving as one reason that it is an “intrinsic portion” of the bulb itself. As examples of what he would consider fittings used in cathode ray tubes, the witness referred to a connector on the end of a wire for making contact with the outside of the button, “the kind of plastic cap which is frequently used to protect the lead of the electron gun” and a “glass panel cemented to the front surface to serve * * * the function of protection against implosion.” He further testified that the anode button is not known “as a fitting in the glass envelope industry” and that “the term fitting is [not] used as a word of art in the glass envelope industry.”

The Customs Court

The Customs Court found the testimony of both witnesses to be “couched in such diffident tones of unfamiliarity with the term ‘fittings’ in the glass bulb and cathode-ray tube industries as to be of little weight.” It further stated:

* * * Neither witness was able to identify, definitively or otherwise, the kinds of products that would or would not be considered fittings in the industry producing glass bulbs for cathode-ray tubes and in the industry producing cathode-ray tubes. Furthermore the testimony of the two witnesses is conflicting and, with respect to the term “fittings”, the testimony of one witness has the effect of negativing the testimony of the other witness.
* * * * * *
* * * But something which is integral to production of an article which is a part of the whole (as is the anode metal button fused into the glass bulbs in this case designed for cathode-ray tubes), in our opinion, is not per se a fitting in the tariff sense. The principal parts of a cathode-ray vacuum tube are an electron gun, the bulb, and a luminescent screen. Without evidence or technical expertise, we could not speculate as to whether those parts would be, as to each other, fittings. By the same token we cannot in the case at bar speculate that the metal button is or is not a fitting.

Opinion

We are not convinced that the Customs Court erred in finding that the record here did not rebut the presumptively correct classification of the merchandise by customs officials as glass envelopes “without fittings.” In addition to the conflicting testimony referred to by the court, questioning of both witnesses failed to bring to light the existence of any commercial cathode ray tube bulbs that did not have anode buttons or their metallic equivalent, as a wire providing a similar function. Appellee points out that it is stated that item 547.37 covers “Glass envelopes for * * * television tubes” in Tariff Commission, Tariff Classification Study, (1960), Schedule 5, Part 3, p. 144. It also notes that both witnesses clearly accepted that cathode ray tubes are used as the principal tubes in television sets. Appellee’s ultimate argument on this point is that exclusion of the present tube bulbs from item 547.-37 would mean that any commercial cathode ray tube bulb would be similarly excluded, a result it regards as inconsistent with the express intention of Congress.

This argument of appellee is not adequately answered by appellants. It is true that the record does not establish that the same conditions as regards commercial cathode ray tube bulbs necessarily existed in 1960 when the Classification Study, supra, was published as well as the later time when the testimony was given. However, the burden is on appellants to overcome the presumption that the classification was wrong and we agree with the Customs Court that it has not done so here.

The judgment of the Customs Court is affirmed.

Affirmed.

      . 67 Cust.Ct. 219, C.D. 4277 (1971).


author: LANE, Judge.

text:
    60 CCPA
    ALUMINUM COMPANY OF AMERICA, Appellant, v. The UNITED STATES, Appellee.
    Customs Appeal No. 5501.
    United States Court of Customs and Patent Appeals.
    May 24, 1973.

      Barnes, Richardson & Colburn, New York City, attorneys of record, for appellant; Joseph Schwartz, James S. O’Kelly, New York City, of counsel.
    Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, James Caffentzis, New York City, for the United States.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   LANE, Judge.

This appeal is from the judgment of the United States Customs Court, 67 Cust.Ct. 400, C.D. 4303 (1971) overruling the importer’s protest against the classification of certain imported merchandise under item 522.21 TSUS as fluorspar containing not over 97% by weight calcium fluoride. The importer claims the merchandise is properly classifiable under item 522.24 TSUS as containing over 97% by weight of calcium fluoride. We reverse.

The fluorspar was imported from Spain in shipments entered at Point Comfort, Texas on September 6, 1967, and December 26, 1967. The record reveals that the importer had samples of the fluorspar taken from both shipments, which samples were subdivided into lots, identifiable as “Manisa” and “Allegra” shipments after the importing vessels. Some lots were sent to customs for laboratory analysis, while others were retained by the importer. Classification under 522.24 resulted from the customs laboratory analysis under Customs Method 207.1 reporting that both shipments contained close "o, but not over, 97 % of calcium fluoride.

In support of its protest, appellant introduced evidence to show the merchandise included over 97% calcium fluoride before being exported and that analyses made of the sample lots in its behalf showed over 97% calcium fluoride. Appellee countered with evidence regarding the customs laboratory tests.

The Evidence

Appellant’s first witness was Manuel Rodriguez, the director of the mines and mills of the Spanish producer of the imported fluorspar. He testified that fluorspar it produced and shipped to the United States is always produced under specifications requiring in excess of 97% calcium fluoride, that the mill employs numerous controls and tests and, if material is found to be running under 97% calcium fluoride, steps are taken to elevate the content before the material leaves the plant.

Walter Frederick, a chemical research technician in appellant’s laboratories, testified to analyzing two samples from each shipment following Customs Method 207.1. In the case of the Manisa shipment, Frederick found a calcium fluoride content of 97.32% and 97.48%, His results for the Allegra shipment were 97.79% and 97.25%.

Donald Maryak, a chemist employed by Booth, Garrett & Blair, Inc., commercial chemists, samplers and analysts, testified to analyzing samples of the importation by a modified Bureau of Standards testing method which he considered reliable and which had been used by the firm for over 15 years. His analyses showed a calcium fluoride content of 97.-37% for the Allegra shipment and 97.-14% for the Manisa shipment. Maryak also analyzed samples using Customs Method 207.1 with the results showing 97.11% for the Manisa shipment and 97.14% for the Allegra shipment.

Russell Eakin, a chemist employed by a company engaged in sampling and analyzing fluorspar and other materials, testified that he personally analyzed samples by Customs Method 207.1 and found a calcium fluoride content of 97.-32% for the Allegra shipment and 97.-05% for the Manisa shipment.

Paul Pittman and Harold P. Pastor, chemists at the customs laboratory, testified to conducting analyses by Customs Method 207.1. Pittman reported finding 96.58% and 96.51% calcium fluoride in samples from the Manisa shipment and 96.92% and 96.86% in samples from the Allegra shipment. Pastor testified he found 96.72% and 96.60% calcium fluoride for the Manisa shipment and a customs report in evidence shows an average of 96.87% for the Allegra shipment based on four tests, two by Pittman and two by Pastor.

The Customs Court’s Decision

The Customs Court observed that the customs chemists used Method 207.1, “a concededly reliable and accurate method when properly conducted,” to make their analyses. It further stated that the results they obtained, if not rebutted, áre presumed to be correct, citing Consolidated Cork Co. v. United States, 54 Cust.Ct. 83, C.D. 2512 (1965). It then noted that the customs chemists’ description of their tests omitted some steps and deviated from others that are prescribed in Customs Method 207.1. However, it found that appellant had not brought out evidence, either by cross-examination or rebuttal, to enable it to determine whether the omissions or deviations amounted to critical departures from Customs Method 207.1. It then concluded:

Since we find no evidence which rebuts “the reliability of the government’s methods and, in particular, its accuracy in these analyses”, T. H. Gonzalez v. United States, 54 CCPA 104, 107, C.A.D. 918 (1967), the presumption of correctness which attaches to the customs classification has not been overcome, and the protest is overruled.

OPINION

The Customs Court reached its decision on the basis of whether appellant had proved that the analysis made by the customs chemists were erroneous. Finding that it had not, the court ruled that the presumption of correctness attaching to the customs classification was not overcome. We think the court misapplied the reasoning of the Consolidated Cork case upon which it relied. In Consolidated Cork, the Customs Court correctly set forth the law applicable in cases like the present as follows:

It is well settled that the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct, United States v. Gage Bros., 1 Ct.Cust.Appls. 439, T.D. 31503; United States v. Lozano, Son & Co., 6 Ct.Cust.Appls. 281, T.D. 35506; Draper & Co., Inc. v. United States, 28 Cust.Ct. 136, C.D. 1400. However, this presumption may be rebutted by showing that such methods or results are erroneous. Sears, Roebuck & Co. v. United States, 3 Ct.Cust.Appls. 447, T.D. 33035; Gertzen & Co. v. United States, 12 Ct.Cust.Appls. 499, T.D. 40697; Pastene & Co., Inc. v. United States, 34 Cust.Ct. 52, C.D. 1677. Furthermore, the presumption does not have evidentiary value and may not be weighed against relevant and material proof offered by the plaintiffs. If a prima facie case is made out, the presumption - is destroyed, and the Government has the burden of going forward with the evidence. United States v. Edson Keith & Co., 5 Ct.Cust.Appls. 82, T.D. 34128; Hawley & Letzerich et al. v. United States, 19 CCPA 47, T.D. 44893; United States v. Magnus, Mabee & Reynard, Inc., 39 CCPA 1, C.A.D. 455; James Bute Company v. United States, 33 Cust.Ct. 130, C.D. 1644. [54 Cust.Ct. at 85.]

Appellants here submitted evidence of analysis they applied to the merchandise which gave a result different from that claimed by the Government. That evidence was sufficient to establish a prima fade case and require the Government to go forward with the proof. The Government did so. The issue then comes down to weighing the evidence, recognizing that the original presumption in favor of the appraisement does not have evidentiary value and may not be weighed against the proofs offered by appellant. Consolidated Cork, supra; United States v. Magnus, Mabee & Reynard, Inc., 39 CCPA 1, C.A.D. 455 (1951).

We think the preponderance of the evidence is in favor of the appellant’s position that the imported fluorspar contained over 97% calcium fluoride. The testimony that the producer always produced fluorspar for the United States under specifications calling for such a calcium fluoride content and that fluorspar was a stable material that would not change in that respect during importation is significant evidence in appellant’s favor. Also, the analyses on behalf of appellant were five in number for each shipment, were made in three different laboratories by two or three different methods by three different operators, and all showed over 97% calcium fluoride. The Government’s analyses showing less than 97% calcium fluoride totaled four on each shipment and all were made in the same laboratories by the same method, although two chemists participated. Moreover, the testimony of the customs chemists indicates that they omitted certain steps described in Customs Method 207.1 and deviated from others.

The Customs Court found that the record offered no basis on which it could “evaluate and weigh the customs chemists’ testimony vis-a-vis what they did in following Customs Method 207.1.” It stated:

What we must weigh is whether the customs chemists’ testimony of what they did in following Customs Method 207.1 for analyses of fluorspar affected the accuracy of the results stated in the laboratory reports. Plaintiff [appellant] did not cross-examine the customs chemists on any of the alleged omissions or deviations pointed up in its brief, nor is there any testimony that the alleged omissions or deviations constituted critical departures from Customs Method 207.1.
Cross-examination or testimony in rebuttal might have established that critical steps in Customs Method 207.1 were, indeed, omitted or significantly deviated from in the customs analyses. Customs Method 207.1 is a technical set of instructions for sampling fluorspar. The customs chemists described what they did following those instructions. Plaintiff [appellant], if inclined to challenge, could have cross-examined the customs chemists and tested what they testified to, paragraph by paragraph, and line by line, with the instructions set forth in Customs Method 207.1. Plaintiff [appellant], in the absence of a relevant searching cross-examination now asks us to evaluate and weigh technical testimony against technical instructions and determine that the instructions were not followed.

That approach of the Customs Court was clearly erroneous. The testimony of the customs chemists was Government evidence offered in rebuttal of the prima facie case of appellant. It was the responsibility of the Government to show that any deviation from Customs Method 207.1 did not impair the accuracy of the results. While we, like the Customs Court, find the record unconvincing on the question, the deficiency lessens the strength of the Government’s case. It does not weaken the case of appellant.

The Government does assert that there were some deviations from Customs Method 207.1 in Frederick’s analysis, particularly that he did not try to pass it through an 80 mesh screen. The importance of this seems minimal, however, since the record shows that the imported material was ground to 100 mesh in production. Overall, the absence of any substantial basis for questioning the accuracy of the analyses made on behalf of appellant, along with the uniform results (over 97% calcium fluoride) from analyses in different laboratories by different persons using different methods makes out a persuasive case for appellant.

The protest should have been allowed and the merchandise classified under item 522.24 TSUS. Accordingly, the judgment of the Customs Court is reversed.

Reversed.

      . All references hereinafter to percentage of calcium fluoride will be by weight, whether or not so specified.

      . A method of analysis fully described in a document of record,


author: ALMOND, Senior Judge.

text:
    60 CCPA
    The UNITED STATES, Appellant, v. HOWARD HARTRY, INC., also known as Howard Hartry Co. and Howard Hartry, Appellee.
    Customs Appeal Nos. 5490, 5491.
    United States Court of Customs and Patent Appeals.
    May 17, 1973.
    Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Patrick D. Gill, for the United States.
    Robert Glenn White (Glad & Tuttle), Los Angeles, Cal., attorney of record, for appellee.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE, Judges, and ALMOND, Senior Judge.
   ALMOND, Senior Judge.

These are appeals from the decisions and judgments of the United States Customs Court, 67 Cust.Ct. 284, C.D. 4286 (1971) and 67 Cust.Ct. 352, C.D. 4296 (1971). The two cases involved three protests which were consolidated for trial but thereafter one protest (67/60386) was severed from the others (protests 67/62901 and 67/65030), for reasons not material here, and decided as C.D. 4286.

The decision in C.D. 4286 sustained the appellee’s protest of the classification of merchandise invoiced as ALBIN Marine Diesel Engine type AD-2 with reverse and reduction gears, under item 696.15, Tariff Schedules of the United States (TSUS), as parts of yachts or pleasure boats and dutiable at 12 percent ad valorem. The court held the merchandise to be dutiable at 10 percent ad valorem under item 660.42, TSUS, as compression-ignition engines. The lower court subsequently held the decision in C.D. 4286 to be controlling in C.D. 4296 involving the two severed protests, since the marine engines involved in each case “are the same in all material respects.”

The pertinent portions of the statutes involved are:

Tariff Schedules of the United States:
Classified under-.
Yachts or pleasure boáj£ regardless of length or tonnage, whether motor, sail, or steam propelled, owned by a resident of the United States or brought Into the United States for sale or charter to a resident thereof, whether or not such yachts or boats are brought Into the United States under their own power; and parts thereof:
Yachts or pleasure boats:
* * * * * *
Item 696.15 Parts ..............12% ad val.
Claimed under:
Internal combustion engines and parts thereof:
Piston-type engines:
* * * * * *
Other:
Item 660.42 Compression-Ignition engines ............10% ad val.

Appellant contends that the imported engines with marine transmissions are more than engines and, therefore, the original classification should have been sustained.

The Customs Court held that classification under item 696.15 as parts of pleasure boats was improper as a matter of law. Its reason was that classification under that provision “is limited in its application to parts of yachts or pleasure boats which are either owned by a resident of the United States or are brought into the United States for sale to a resident of the United States.” Since, in its view, the merchadise was an article of commerce per se, the court held that the merchandise did not meet the requirements for classification under item 696.-15, citing its decision in Eaton Manufacturing Co. v. United States, 66 Cust.Ct. 293, C.D. 4207 (1971). The portion of that decision pertinent here was reversed by this court in Eaton Manufacturing Co. v. United States, 469 F.2d 1098, 60 CCPA -, C.A.D. 1076 (1972).

We adhere to our decision in Eaton. Therefore, the only issue remaining in this case is whether the imported engines with marine transmissions are “more than” engines as urged by appellant. The lower court held that they were not. We reverse as we agree with appellant that classification within item 660.42 would be improper.

The record here reveals that the engines in issue are used as marine auxiliaries, i. e., their normal use is to power sailboats in and out of channel and when there is no wind to afford propulsion. They are equipped with a component described as a marine transmission which is a forward, neutral and reverse clutching mechanism including forward and reverse gears. The transmission is joined to the engine in a housing and can be removed without affecting the operation of the engine by plugging up the oil sump to prevent loss of oil caused by the removal of the transmission. This removal, though possible, is not a practical operation.

The record also reflects that the involved engines could be used for purposes other than providing motive power for a boat. The gears serve to give higher torque at low vehicle speed or to give a change in torque but do not affect the horsepower or actual running of the engine. From the record we are convinced that a transmission, though in this case an integral part of the engine as imported, is not an essential part of an engine.

This court in Servo-Tek Products Co. v. United States, 416 F.2d 1398, 57 CCPA 13, C.A.D. 969 (1969), held that an item consisting of an electric motor and a gear train, fastened together to form a single operating suit, was “more than” a motor. More recently, in United States v. ACEC Electric Corp., 474 F.2d 1009, 60 CCPA -, C.A.D. 1091 (1973), a similar result was reached in a case where the imported item was an electric motor with which was integrally housed a clutch mechanism. In combination, these elements formed a single operating unit. In operation, the motor ran continuously while the clutch mechanism functioned to allow a drive pulley to be engaged and disengaged. Although the sole use to which the unit was put was as a power source for an industrial sewing machine, it was held to be “more than” a motor.

We think those decisions dictate a reversal of the lower court in this case. In each of those cases a basic engine, specifically an electric motor, was modified by the addition of components not essential to a basic engine. In ACEC, as is true here, the added components were integrated with the engine and dedicated it to a particular purpose, but these special features did not preclude a determination that it was “more than” an electric motor. We see no room for a different conclusion here.

In the instant case the engines are used as marine auxilaries to power sailboats. The transmission as a clutching mechanism for forward and reverse gears serves to adapt the basic engine to its intended use as part of a sailing vessel. Therefore, we think that the addition of transmissions to those engines made them “more than” compression-ignition engines for tariff purposes.

Accordingly, we reverse the decisions and judgments of the Customs Court and remand with directions that judgments be entered affirming the classifications under item 696.15, TSUS.

Reversed.


text:
    60 CCPA
    BUSHNELL INTERNATIONAL, INC., Appellant, v. The UNITED STATES, Appellee.
    Customs Appeals No. 5484.
    United States Court of Customs and Patent Appeals.
    June 7, 1973.

      Stein & Shostak, Los Angeles, Cal., attys. of record, for appellant. James F. O’Hara, S. Richard Shostak, Los Angeles, Cal., of counsel.
    Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, John A. Gussow, New York City, for United States.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   BALDWIN, Judge.

This is an appeal from a judgment of the United States Customs Court, Second Division, Appellate Term affirming the judgment of a single judge sitting in reappraisement. The goods are optical goods including binoculars, which were manufactured by Toyo Jitsugyo KK, exported from Japan by Oriental Trading Co., Ltd., and imported into the United States during the period August 14, 1964, through October 14, 1964. The judgments of the Customs Court upheld the appraised values returned by Customs officials.

It is agreed that the proper basis of appraisal is export value as defined by section 402(b) of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956. The issue is whether certain charges paid to Oriental Trading Co., including commissions and inspection fees, were properly added to the invoiced ex-factory prices in obtaining the appraised value.

Both parties in their briefs quote the following excerpt from the opinion of the Appellate Term for a summary of the record:

The record consists of the testimony of David P. Bushnell, president of Bushnell International, Inc., the importer herein, and a number of documentary exhibits. From the evidence, it appears that Bushnell has been importing optical goods from Japan since 1948 and that in 1950 Oriental Trading Company, Ltd., was appointed its buying agent. A written agreement was entered into in 1955, according to which Oriental Trading was “to handle all the details concerning purchase of merchandise from factories on ex-factory basis, inspection at the Laboratory, export packing, storage, transportation to the port of shipment and shipping documentation” for which it was to receive a 5 percent commission on the ex-factory value of the merchandise (exhibit 1, attachment HY-1).
The Japanese name of Oriental Trading Company, Ltd., is Toyo Jitsugyo KK. The firm was formed in 1947 to serve as a buying agent. In 1956 it set up a factory branch at Kugahara, Japan. The Kugahara factory is registered as a manufacturer of binoculars and is referred to by the Japanese name of Toyo Jitsugyo KK. Oriental Trading Company, Ltd., is registered as an exporter and has retained its English name. However, Toyo Jitsugyo KK and Oriental Trading Company, Ltd., are not two separate companies; Oriental Trading is merely the export division of Toyo Jitsugyo KK.
Mr. Bushnell testified that he first became acquainted with the Toyo Jitsugyo Kugahara factory in 1956 when he was taken there on a visit to Japan. He understood that there were some common stockholders in Toyo Jitsugyo and Oriental Trading, but that in order to build a factory, additional capital was needed and other stockholders were brought in. He did not ask anyone about the specific relationship as he was interested only in getting good quality binoculars at a reasonable price. He did not learn that the Kugahara factory and Oriental Trading were related until 1966. In fact, in 1960, the working relationship between Bushnell and Oriental Trading was confirmed by a written agreement, which stated, among other things:
As our purchasing agent, you are to handle all of th'e details concerning the purchase of the merchandise we designate from the various factories that you deem most appropriate under the circumstances. Purchases are to be made on a freely offered ex-factory basis. You are to inspect every item to assure yourselves that each meets our high standards of quality. You are to supervise the export packing, arrange for outside storage and subsequent transportation to the port of export. You will pay all charges between the factory and the port of exportation. You are to prepare all export documentation.
All of your expenses, plus two percent (2%) for inspection fee and your five percent (5%) buying commission, are to be shown separately from the maker’s ex-factory prices for the merchandise. Your charges and the maker’s charges are to be shown on your invoices to us and collection made under our Letter of Credit established in your favor.
Mr. Bushnell negotiated with the Kugahara factory in the same manner as he dealt with other manufacturers at ex-factory prices. Sometimes a representative of Oriental Trading was present and sometimes not. Oriental Trading performed the same functions of inspection and shipment with respect to the merchandise manufactured by the Kugahara factory as it did with respect to merchandise manufactured by others.
An affidavit of Hideo Machiyama, chief of the Toyo Jitsugyo Kugahara factory (exhibit 2) states:
That Kugahara Factory set the sales price of its merchandise based upon its own determination of costs. That approximately 60% of the production of Kugahara Factory was sold for export to the United States to Bushnell International and was delivered through Oriental Trading Co., Ltd. That Kugahara Factory was not set up to export its merchandise, and purchasers in the ■ United States or in other countries required the services of some export agent to arrange for exportation of his merchandise. That in 1964 and before, the merchandise manufactured by Kugahara Factory was freely offered at the same ex-factory prices for like quantities with similar terms to United States importers through other buying agents. That offers at ex-factory prices such as those attached and marked Exhibit M-4 were also made directly by Kugahara Factory to purchasers from other countries who had export agents in Japan. * *K- *
Attached to the affidavit is a quotation given to Kuni Tsusho Co., Ltd., in May, 1964, setting forth unit prices for several types of binoculars and a bill to the same firm. According to an affidavit of K. Endo, president, Kuni Tsusho Co., Ltd., serves as a buying agent for American importers, had received ex-factory offers from Toyo Jitsugyo KK in June, 1964, and had made one purchase, for exportation to West Germany. (Exhibit 4.)

The appeal to reappraisement of the present goods was consolidated for trial with like appeals as to goods from two other manufacturers, Ohta Optical Co. and Meiji Seiko KK, with respect to which Oriental Trading Co. performed essentially the same services for appellant, for a like fee. Referring to the importations from all three manufacturers, the trial judge stated:

The appropriate officials of the manufacturers, in affidavits, and plaintiff’s president, in testimony, assert that the merchandise in question was freely offered for sale at ex-factory prices. The affidavits of the manufacturers including the supporting material attached thereto support the view that the merchandise they sold tó plaintiff and which is involved herein, was available to all purchasers at ex-factory prices. * * *

The trial judge was further satisfied that Oriental Trading Co. acted as a “genuine” buying agent for the goods of the other two manufacturers: As to. the present goods, the trial judge found “the essential fact” that Oriental Trading Co. is the export division of Toyo Jitsugyo KK caused him to take the “completely different view” that Oriental Trading was disqualified from being a bona fide buying agent. On that basis, he ruled that the fees paid to Oriental Trading as to the present goods were properly included in the purchase price of these goods and upheld the appraisement.

The Appellate Term agreed with the trial judge that Oriental Trading, as a division of the manufacturer, was not a bona fide buying agent in this case. It also discussed the evidence that appellant submitted with regard to offering of the goods at ex-factory prices but stated: -

In our view the evidence presented does not establish that Toyo' Jitsugyo freely sold or offered its merchandise to all purchasers on an ex-factory basis or that it offered the option of purchasing either ex-factory without the participation of Oriental Trading or on some other basis.

Opinion

The appraisements here were made on the basis of invoiced “ex-factory” prices plus the disputed charges and, as found by the trial judge, are separable. Accordingly, appellant need only prove the non-dutiable character of the disputed charges which include the commissions paid by it to Oriental Trading. Globemaster Midwest, Inc. v. United States, 68 Cust.Ct. -, R.D. 11758, 337 F.Supp. 465 (1971). See also United States v. Pan American Import Corp., 57 CCPA 134, 428 F.2d 848, C.A.D. 993 (1970).

The first question is whether the amounts paid to Oriental Trading were properly excluded from treatment as commissions so as not to be excludable from export value. The affirmative holding below on that point was based solely on the circumstance that Oriental Trading was a branch of the manufacturer. We'think the holding was not supported by substantial evidence and was erroneous as a matter of law. The evidence that Oriental Trading performed the same services with respect to appellant’s purchases from Toyo Jitsugyo as those from Meiji Seiko and Ohta Optical, which services unquestionably qualified as those of a buying agent as specifically recognized by the trial court, is uncontroverted. The fact that profits realized by Oriental Trading acting as buying agent would ultimately benefit the manufacturer does not in itself bar the commissions paid to Oriental Trading from exclusion from the dutiable cost. We see no controlling distinction between the relationship of the agent and the manufacturer here and the relationship in Kurt Orban Co. Inc. v. United States, 52 CCPA 20, C.A.D. 851 (1965), where the agent was owned by the principal mills for which it acted as agent. In accord with United States v. Tapetes Luxor S.A., 54 CCPA 116, C.A.D. 851 (1965), the business ties between the manufacturer and the agent are not necessarily determinative of the status of commissions the importer paid the agent but the question must be determined by the full circumstances as revealed by the evidence at hand. The case is clearly distinguished from B & W Wholesale Co. v. United States, 58 CCPA 92, C.A.D. 110 (1971), where there was substantial evidence that the importer did not have control over the factories from which the alleged agent ordered the goods as well as other aspects of the operation.

The remaining question is whether appellant demonstrated that Toyo Jitsugyo offered the goods at ex-factory prices. On this point, the affidavit of the chief of the Toyo Jitsugyo factory and the president of Kuni Tsusho which served as a buying agent amount to significant evidence that Toyo Jitsugyo’s goods was freely offered under circumstances that made evaluation here on the basis of ex-factory prices appropriate. The trial court discussed the evidence as follows:

Plaintiff’s president testified that during the period in question an agreement was in effect designating the Oriental Trading Co. as buying agent for plaintiff. Pursuant to said agreement, the purported buying agent accompanied plaintiff’s president to his negotiations with the manufacturers, interpreted when necessary, arranged for the transportation and exportation of the merchandise in question, and inspected it in accordance with rigorous inspection standards developed by plaintiff. For these services Oriental Trading Co. received a 5 percent buying commission and a 2 percent inspection commission. These services were provided in connection with merchandise purchased from Ohta Optical Co., Meiji Seiko KK and Toyo Jitsugyo KK.
The appropriate officials of the manufacturers, in affidavits, and plaintiff’s president, in testimony, assert that the merchandise in question was freely offered for sale at ex-factory prices. The affidavits of the manufacturers including the supporting material attached thereto support the view that the merchandise they sold to plaintiff and which is involved herein, was available to all purchasers at ex-factory prices. In addition, the record includes certain cost records kept by plaintiff’s president which were introduced in evidence for the purpose of demonstrating that the ex-factory price was the price utilized by him in his records of purchases. Certain discrepancies between the prices listed in these records and the invoice prices were adequately clarified in additional testimony as being the result of certain of the imported items ultimately being purchased without eases.

In finding of fact No. 6, the trial court found that “said merchandise,” apparently including that of all three manufacturers, “was freely offered for sale to all purchasers at ex-factory unit prices, which did not include inland freight or other charges, or the buying commission or inspection fees.”

We think the trial court’s analysis was correct and that appellant plainly overcome whatever presumption against Toyo Jitsugyo’s freely offering the goods at ex-factory prices might have arisen from the appraisement. On the other hand, the Appellate Term has not pointed to any substantial evidence to support its conclusion to the contrary and we therefore must find that its determination on the matter of ex-factory prices was erroneous as a matter of law. The appraisements being separable, the invoice prices of the imported goods represent the correct export value.

In sum, we find that on the particular facts of this case Oriental Trading Co. acted as a bona fide buying agent for appellant even though Oriental Trading was in fact the export division of the manufacturer, and that the merchandise was freely offered for sale on an ex-factory basis. Accordingly, the decision and judgment of the Customs Court is reversed.

Reversed.

      . 67 Cust.Ct. 588, 331 F.Supp. 1378, A.R.D. 297 (1971).

      . 64 Cust.Ct. 765, 314 F.Supp. 48, R.D. 11714 (1970).

      . Export Value. — For the purposes of this section, the export value of imported merchandise shall be the price, at the time of exportation to the United States of the merchandise undergoing appraisement, at which such or similar merchandise is freely sold or, in the absence of sales, offered for sale in the principal markets of the country of exportation, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States, plus, when not included in such price, the cost of all containers and coverings of whatever nature and all other expenses incidental to placing the merchandise in condition, packed ready for shipment to the United States.

      . See definitions in section 402(f), Tariff Act of 1930, 46 Stat. 407, as amended by the Customs Simplification Act of 1956, 70 Stat. 944, 19 U.S.C. § 1401a (f).