Throughout the spring and summer of 2012 OtterBox entered into the commerce of the United States shipments of the Commuter and Defender Series phone cases. Customs classified the cases under subheading 4202.99.9000 HTSUS (covering all manner of containers) which carries a 20% duty rate. OtterBox challenged this classification in the Court of International Trade and argued that the cases are properly classified under 3926.90.9980 (covering other articles of plastic) which carries a 5.3% duty rate. The Court of International Trade agreed with OtterBox and determined that containers, as understood commercially, organize, store, protect, and/or carry products. The phone cases share only the protection feature in common and are therefore not containers in the commercial sense. Some examples of containers listed in the government’s preferred tariff provision include suitcases, toiletry bags, gun cases and other similar enclosures.

The government appealed and the United States Court of Appeals for the Federal Circuit recently heard oral arguments. Audio of the oral arguments is accessible here. The Appeals Court will have a chance to weigh-in on just what a container is and whether or not all four “case” criteria (organizing, storing, protecting, carrying) need to be met before a product can be called a container.  You can also read the CIT’s prior ruling here.