CIT Rules that McDonald's Promotional Watch is Not a Toy
In Simon Marketing, Inc. and Perseco System Services, L.P. v. U.S., the Court of International Trade (CIT) ruled that a "Pop Topper" watch sold for $1.99 as a promotional article at McDonald's are classified under HTS 9102.91.20 (1998) as a watch with a duty rate of 3.9% on the movement and case and 5.3% on the battery.
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Simon contended that the Pop Topper should be classified under HTS 9503.90.00 (1998) as other toys, a provision which is duty-free, as the item's principal use is that of amusement as it is colorful and contains images of characters from a movie.
In addition, because the cost of a replacement battery exceeded the price of the Pop Topper, Simon believed the timekeeping function was unimportant.
However, Customs argued, and the CIT agreed, that the item was designed, advertised, and sold as a watch.
It was also established that the item falls within the common meaning of "watch."
Because of these factors, and also because the item resembles a pocket watch and can tell time, the CIT found that the Pop Topper is classified under HTS 9102.91.20.
The CIT also ruled that toy watches only resemble watches and cannot keep time.
(Slip Op. 05-118, dated 09/01/05, available at http://www.cit.uscourts.gov/slip_op/Slip_op05/05-118.pdf)