Fitbit continues to worry about tariffs, its finance chief said shortly after the Trump administration said it might impose 25 percent (up from 10 percent) tariffs on $200 billion of Chinese products over intellectual property disagreements (see 1808010078). The company is “navigating a number of different paths” to reduce or eliminate such exposure, said Chief Financial Officer Ron Kisling on a Wednesday evening earnings call. Fitbit uses Chinese contract manufacturers to produce its devices, and tariffs would increase the bill of materials costs of goods it imports to the U.S., said Kisling. There’s no certainty whether the tariffs “will ultimately go into effect,” or if wearable devices can qualify for tariff “exemptions,” or “how much, if any, of the potential increase in cost can be mitigated,” said Kisling. The full-year forecast “excludes the potential impact,” he said. “We support open markets and free trade where everyone plays by the rules.” One proposed tariff line “covers a wide variety of wireless products, including fitness trackers and smartwatches, which comprise nearly all of Fitbit's products,” said the company in comments July 27 asking to testify against the duties. Also, following Q2 results, the company's stock closed down 7.9 percent Thursday at $5.45.

China should continue to strengthen antitrust enforcement agencies, improve pro-innovation structures like intellectual property rights, and challenge government-created barriers to competition, said FTC Commissioner Maureen Ohlhausen Tuesday in Beijing. “Negative effects of government intervention in markets can be even more problematic than the actions of private actors.” She recommended Chinese antitrust enforcers follow the FTC's and DOJ’s example of focusing efforts on consumer welfare, not impacts to corporate competition. She warned Chinese authorities against using antitrust enforcement tools as a means for protecting domestic companies and industries against foreign competition. China started enforcing a new antitrust law in 2008, the same year its three anti-monopoly law agencies signed a memorandum of understanding with the FTC and DOJ. Ohlhausen credited China for continuing a joint dialogue with U.S. regulators, including Assistant Attorney General Makan Delrahim. She commended the China State Council’s June 2016 decision to establish a fair competition review system to prevent “excessive and inappropriate government intervention.” She emphasized China’s need to strengthen IP rights, as U.S. businesses accuse the Chinese of stealing IP information from American companies. “The countries that protect IP rights within their borders tend to foster innovation, those that fail to create the necessary predicates to investments in innovation lag behind,” said Ohlhausen.

The Senate should pass the Music Modernization Act without a controversial amendment floated (see 1807250037) by Texas GOP Sens. Ted Cruz and John Cornyn, said broadcaster associations from all states, Washington, D.C., and Puerto Rico Wednesday. The bill, which passed the House and the Senate Judiciary Committee unanimously, “reflects historic consensus” by every group from songwriters to record labels, streaming services and broadcasters, they wrote Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y.

Samsung filed EU and U.S. trademark applications last week that hint at the promotional tagline the company will use when it begins marketing 8K TVs, records show. Samsung wants to register the phrase, “Turn everything you love into 8K,” for an international class of goods that includes TVs, mobile phones and smartwatches, said a Patent and Trademark Office application. The company didn't comment Monday.

The Streaming Video Alliance said there are many considerations for implementing forensic watermarking as a route to preventing piracy of online video. A document outlines techniques.

The U.S. Court of Appeals for the Federal Circuit Friday rejected the Saint Regis Mohawk Tribe’s request for tribal sovereign immunity from inter partes review. That got praise from the Software & Information Industry Association. In Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals, Allergan tried to block the Patent and Trademark Office from re-examining a patent, which a court had invalidated, by selling it to a tribe claiming immunity. SIIA Vice President-Intellectual Property Christopher Mohr called Friday’s order (in Pacer) a win for innovation: “When Congress passed the America Invents Act, it recognized that inter partes proceedings are critical to ensuring patent quality. The Federal Circuit's decision not only ensures the soundness of that system, it also promotes fundamental fairness because when it comes to IPR, every patent owner has to play by the same set of rules.”

A “wide range” of Apple products, including the iPhone X, uses a lead-free solder alloy in violation of a January 2001 patent (6,176,947), alleged the patent’s owner, Singapore Asahi Chemical & Solder Industries, in a complaint (in Pacer) filed Wednesday in U.S. District Court in Cleveland. Asahi, a global manufacturer and distributor of solder products and related chemicals, bought the patents in March 2002 from two Cleveland-area inventors, said the complaint. The inventors recognized that “traditional” lead-tin solder alloys faced a “limited future,” so they devised alloys “to meet the increasing level of performance needed in solder joints as required by the continued advancements in integrated circuit and IC package technologies,” said the complaint. It’s those lead-free alloys that are incorporated into Apple products without an Asahi license, it said. Asahi gave Apple written notice of the alleged infringement “at least as early” as July 2017, it said. “Despite such previous written notice, Apple continues to infringe Asahi’s patent rights.” Apple didn’t comment Thursday.

With the publication of the Office of U.S. Trade Representative’s notice in Wednesday’s Federal Register on procedures for requesting exclusions from Trade Act Section 301 tariffs on Chinese imports (see 1807080001), docket USTR-2018-0025 for posting such requests became active in the regulations.gov portal. No requests were posted yet by our Friday deadline. Exclusion requests are due by Oct. 9, and if granted will apply for a year retroactively to July 6, said the notice. Once a request is posted, the public will have 14 days to file responses to that request, it said. After that 14-day period, “interested persons” will have seven days to reply to those responses, it said. Though Oct. 9 is the deadline for the exclusion requests, “international trade team” lawyers at BakerHostetler are “advising clients to file as soon as possible in anticipation of the large administrative backlog that they expect.” Though the Trump administration’s threat to impose 10 percent tariffs on an additional $200 billion worth of Chinese imports (see 1807110034) “doesn't necessarily raise the risk of an all-out trade war, the tariffs would affect some industries and individual corporate borrowers,” said S&P Global Friday. Together with the 25 percent tariffs enacted July 6 on $34 billion in Chinese imports and the proposal to impose tariffs on another $16 billion in goods, “the total amount of $250 billion now represents about half the value of China's annual exports to the U.S.,” it said. The absence of an immediate “tit-for-tat” retaliatory response from China “lends hope to the belief that China-U.S. trade negotiations aren't completely off the table,” said S&P. “We are obviously not sanguine about the risk. Our current base-case assumption is that the tariffs, if imposed, will not likely greatly affect either economy. However, they would affect some industries and individual corporations.” The U.S.-China friction already is contributing to “jitters in the financial markets and is coloring business investment decisions,” said S&P. If China wants to retaliate with tariffs on U.S. goods, it “can’t match” the $200 billion figure because American imports to China totaled only $130 billion last year, it said: “Should China opt to pursue non-tariff actions that affect services and investments, it could damage global business and consumer confidence, investment prospects, and growth.”

The Chinese Embassy in Washington released a 1,300-word statement Thursday accusing U.S. Trade Representative Robert Lighthizer of “slander” for alleging that China uses unfair trade practices to gain advantages over its U.S. trade competitors. In announcing a new round of proposed 10 percent Trade Act Section 301 tariffs Tuesday on $200 billion worth of Chinese goods (see 1807110034), Lighthizer called China’s trade practices “an existential threat to America’s most critical comparative advantage and the future of our economy.” The retaliatory actions China took in response to the tariffs that took effect July 6 were "without any international legal basis or justification," said Lighthizer. The Chinese shot back, calling Lighthizer’s statement “a distortion of facts” and his accusations “groundless.” Any “underlying problems in the American economy and society are purely caused by domestic, structural reasons in the US,” said the embassy. China since February “engaged in four rounds of high-level economic talks with the US,” and reached “important consensus” on “strengthening trade and economic cooperation and avoiding a trade war,” it said. “But due to domestic politics, the US has gone back on its words, brazenly abandoned the bilateral consensus, and insisted on fighting a trade war with China. China has done its utmost to prevent the escalation of trade frictions. The United States is fully responsible for the current situation.” The tariffs the Trump administration implemented or proposed are “typical unilateralism, protectionism and trade bullying,” and are a “clear violation” of the basic World Trade Organization “principle of most-favored-nation treatment as well as the basic spirit and principles of international law,” said the embassy. That China was “forced to take” retaliatory “counteractions” against the tariffs was “an inevitable choice to defend national interest and global interest, and is perfectly rightful, reasonable and lawful," it said. Lighthizer's office didn't comment.

Sony Mobile Communications smartwatches and “smart bands” that use Google’s Wear OS platform violate a U.S. patent in the way they communicate with other devices, alleged a complaint (in Pacer) filed Sunday in U.S. District Court in Wilmington, Delaware. Beck Branch, a Plano, Texas, limited liability company, owns a March 2005 patent (No. 6,873,620) that describes a communication server acting as a gateway for the transmission of messages between two virtual devices communicating with networks implementing different protocols. The complaint against Sony was one of six actions Beck Branch filed Sunday in the same court alleging infringement of the same patent. Other defendants and their allegedly infringing products or services: (1) Blue Jeans Network (in Pacer), which operates a cloud-based platform for internet-protocol-based communication; (2) Polycom (in Pacer), which markets a unified communications software platform for open standards-based communication, including session initiation protocol (SIP); (3) Motorola Mobility (in Pacer), for its Wear OS smartwatches and fitness bands; (4) Unify (in Pacer), which markets OpenScape as a hybrid unified communications platforms for IP-based communication, including SIP-based communication; (5) Vonage (in Pacer), marketer of unified communications services based on cloud public branch exchange protocol. Defendants didn’t comment Monday.