Court of International Trade Ruling Provides Tariff Relief for Cell Culture Bioreactors

A recent ruling from the U.S. Court of International Trade has the potential to reduce customs duties significantly for some biotechnology companies. In Applikon Biotechnology Inc. v. United States, 07-364 (Ct. Int'l Trade Dec. 12, 2011), the court changed the tariff classification of Cell Culture Bioreactors from heading 8419, "machinery...for the treatment of materials by a process involving a change of temperature", to heading 8479, "machines...having individual functions, not specified or included elsewhere in this chapter; parts thereof." The change resulted in a zero rate of duty instead of the 4.2% rate that had previously been imposed under the classification given by U.S. Customs and Border Protection ("CBP").

The court described Cell Culture Bioreactors as machines that act to maintain an aseptic and homogeneous environment in which to culture cells, especially bacteria, that are used to break down harmful substances. The cells are grown for use in various applications in research or process development, including the development of biopharmaceuticals.

In its ruling, the court found a stirring component that allows continuous mixing of cell culture to be a key mechanism of bioreactor systems in their primary function of maintaining an aseptic and homogeneous environment for the growth of cells. Although the equipment also included a temperature control function that was used and necessary for some applications, the court concluded that temperature control was "subsidiary to the primary function of the device." In making the distinction, the court noted that the mixing function was always used when the Bioreactor System is in operation, and that the electric...