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Keywords

plaintiffdefendantburden of proof

plaintiffdefendantlitigation

Related Cases

Cyber Power Systems (USA) Inc. v. United States, 622 F.Supp.3d 1397

Facts

Plaintiff Cyber Power Systems (USA) Inc. filed a suit against Customs and Border Protection (CBP) after CBP denied its protest regarding the country of origin marking of five UPS models and one surge voltage protector (SVP). The plaintiff claimed that its operations in the Philippines resulted in a substantial transformation of the merchandise, which was marked as 'Made in the Philippines.' However, CBP determined that the products originated from China, leading to the exclusion of the merchandise upon entry.

Plaintiff Cyber Power Systems (USA) Inc. commenced this action contesting a denied protest regarding the country of origin marking of five models of uninterruptible power supplies ('UPS') and one model of surge voltage protectors ('SVP').

Issue

Whether the subject merchandise was substantially transformed in the Philippines to warrant the country of origin marking as 'Made in Philippines' instead of 'Made in China.'

The dispositive question in this action, as noted over the course of the litigation, is whether the subject merchandise was substantially transformed at the Cyber Power Philippines factory.

Rule

A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, or use that differs from those of the original material subjected to the process. The burden of proof lies with the plaintiff to establish that the merchandise is substantially transformed in the country it wishes to represent as the country of origin.

A substantial transformation occurs 'when an article emerges from a manufacturing process with a name, character, or use which differs from those of the original material subjected to the process.'

Analysis

The court analyzed the evidence presented regarding the manufacturing processes of the UPS models and the SVP. It found that while the CP600LCDa model had sufficient evidence to support its substantial transformation in the Philippines, the other models did not meet the criteria. The court emphasized the need for a 'new and different' article to emerge from the manufacturing process and determined that the evidence for the other models did not sufficiently demonstrate this transformation.

The court finds that it is unable to draw Defendant's preferred factual inferences from the cited exhibits. The invoice, which appears to show a part of the main PCBA for the CP600LCDa, is dated June 27, 2019—prior to the dated work orders and set lists for the CP600LCDa on which Plaintiff relies.

Conclusion

The court concluded that the UPS Model No. CP600LCDa was substantially transformed in the Philippines, while the remaining five models were not. Therefore, the court entered judgment for the plaintiff in part and for the defendant in part.

Based on the totality of this evidence, the court concludes that Plaintiff has proven that the main PCBAs for the subject CP600LCDa devices were manufactured in the Philippines.

Who won?

The prevailing party was the plaintiff, Cyber Power Systems (USA) Inc., for the UPS Model No. CP600LCDa, as the court found sufficient evidence of substantial transformation in the Philippines.

The court enters judgment for Plaintiff as to the Philippine origin of one model of subject merchandise, UPS Model No. CP600LCDa, and judgment for Defendant as to the Chinese origin of the remaining five models.

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