US Says Hoverboards’ Manual Describes Them as Transportation, Not Entertainment, Devices

In response to importer 3BTech’s motion for judgment in July, which claimed that its imported Swagtron hoverboards should have been classified under the tariff-free Harmonized Tariff Schedule heading 9503 for “tricycles, scooters, pedal cars and similar wheeled toys,” the government argued in favor of CBP’s own classification, heading 8711, which covers “motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars” and carries a 25% Section 301 tariff.

But heading 8711 also carries an explanatory note explaining it “also covers two-wheeled, electrically-powered transportation devices, designed for carrying a single person, for use within low speed areas such as pavements (sidewalks), paths, and bicycle lanes.” These transportation devices “allow the rider to stand upright while a system composed of gyroscope sensors and multiple onboard microprocessors maintain both the device’s and rider’s balance on two independent, non-tandem wheel,” the government said.

This “indisputably” describes the hoverboards in question, as their wheels are also non-tandem and they include gyroscopes and electronics meant to maintain their speed and their riders’ balance, it said.

It acknowledged that explanatory notes aren’t binding, but argued that they serve as persuasive authority. Also, it said, that explanatory note was specifically written to cover Segways, and the hoverboard “was designed to be a smaller, portable version of the Segway with the same operating paradigm” and the same components,” according to the hoverboard’s patent.

The U.S. also took issue with the importer’s claim that the standards set out by the Court of International Trade in another case, Streetsurfing v. U.S., placed the hoverboards in the “wheeled toys” category instead. In that case, the trade court described “wheeled toys” as products that don’t require training prior to use; don’t pose a meaningful risk of injury; don’t need a particular level of athleticism; and have some sort of assistive device to help the rider.

Contrary to what 3BTech argued, its hoverboards meet none of those requirements, it said. The products’ user manuals advise caution when using the products and note repeatedly that proficiency requires practice, saying that riders must use their “best judgment to determine if an individual can use the SWAGTRON safely.”

“In 2015, U.S. News & World Reports reported that a published research study found that 26,854 patients were admitted to U.S. hospitals due to falls and collisions involving hoverboards,” the government noted.

It also claimed that the importer markets its products not as toys for children, but as personal transportation devices. For example, it said, retail stores such as Walmart sell the hoverboards in their sporting goods aisles, and the hoverboards’ manuals state: “You’re about to take the next step in the evolution of transportation.”

The importer alternatively argued that the products should fall into Section 301 exclusions for motorcycles or for electric skateboards. First, 3BTech claims that the hoverboards are electric cycles, the U.S. said, but this “completely ignores that the exclusion refers to ‘motorcycles’ and not ‘cycles’ generally. Second, the importer argues that its products are skateboards, but skateboards are neither self-balancing nor have two independent footpads, it said.