President Donald Trump’s administration making good at 12:01 a.m. Friday on his threat to hike the 10 percent tariffs on $200 billion in Chinese goods to 25 percent drew tech concern. “Raising tariff rates or imposing new tariffs on American families is not a winning negotiating tactic" with the Chinese, said CTA Friday. The tariff hike will raise the “significant toll” the trade war already has taken on U.S. businesses, workers, and consumers,” said Naomi Wilson, Information Technology Industry Council senior policy director-Asia. GoPro meanwhile remains "on track" to begin "ramping" up" U.S.-bound" action-camera production this quarter in Guadalajara, Mexico, as a proactive hedge against possible future tariffs on Chinese goods, said Chief Financial Officer Brian McGee on a Q1 call Thursday evening. GoPro has no current exposure to the three rounds of tariffs imposed since July but wanted protection anyway against new duties, he said. Guadalajara's production ramp will "support" U.S. sales beginning in Q3, said McGee. "We expect most of our U.S.-bound cameras will be in production in Mexico in the second half of 2019." GoPro's decision to shift production of most cameras destined for U.S. import from China to Mexico "supports our goal to insulate us against possible tariffs, as well as recognize some cost-saving and efficiencies," he said. The company says it's keeping production of non-U.S. cameras in China because it's an important strategic hub and the Chinese consumer market loves the product.

For Chinese goods already on their way to the U.S., 25 percent tariffs on $200 billion of Chinese goods that were to have taken effect at 12:01 a.m. Friday (see 1905060028), "the 10 percent duty rate will still apply," said Customs and Border Protection in updated "guidance" Thursday. That was in keeping with Office of the U.S. Trade Representative instructions a day earlier. CBP's new guidance was to correct the agency's errant system update tariffing all Chinese goods at 25 percent if they entered U.S. ports after 12:01 a.m. Friday, regardless of when they left China, in direct contradiction to USTR's instructions, blogged trade lawyer Paula Connelly Thursday. The discrepancy was likely causing "quite a bit of confusion," she said. USTR soon will publish the terms of this List 3 exclusion process, said Thursday's Federal Register notice making the tariff increase legally binding. U.S. importers “should move quickly to assess the impact" of the higher duty rate and "consider whether to prepare an exclusion request,” advised Covington & Burling Wednesday.

The Office of U.S. Trade Representative soon will publish a Federal Register notice setting the 25 percent third tranche tariff increase (see 1905060028) to take effect 12:01 a.m. Friday, USTR Robert Lighthizer told a media briefing Monday. China confirmed Tuesday that Vice Premier Liu He will lead the delegation that travels to Washington for the 11th round of U.S. trade talks opening Thursday. China regards it as “natural to have differences in a negotiation,” a Foreign Affairs Ministry spokesperson responded to Lighthizer’s allegations that the talks derailed last week in Beijing after China reneged on previously negotiated commitments. “The Chinese side will not sidestep differences and has good faith in continuing consultations,” said the spokesperson.

Qualcomm expects to record revenue gains in Q3 ending June 30 of between $4.5 billion and $4.7 billion from its global settlement with Apple, said finance chief Dave Wise on a fiscal Q2 call Wednesday. The gains include a one-time “cash payment” from Apple and the “release of related liabilities,” plus “go-forward royalties,” he said. Apple will take a six-year license from Qualcomm with an option for two more years, and will source Qualcomm chipsets for a “multiyear” term, said CEO Steve Mollenkopf. The settlement is “a significant milestone, as it is Qualcomm's first patent license agreement directly with Apple,” rather than through Apple’s contract manufacturers, he said. “There's a lot of tension removed out of the system as a result of these settlements,” he said. “I really like the opportunity to have the two teams just working together on products in the future.” Qualcomm downgraded its forecast for calendar 2019 smartphone chipset sales by 50 million units to 1.85 billion units “due to continued weakness in China and a lengthening of the handset replacement cycle, potentially reflecting a pause in advance of 5G rollouts,” said Wise. “We now expect global handset units to decline slightly year over year.” Global smartphone shipments declined 6.6 percent to 310.8 million units, “a clear sign that 2019 will be another down year,” said IDC Tuesday (see 1905010173).

Best Buy’s private-label Insignia smart TVs infringe an 11-year-old patent in how they enable owners to use discovery and launch (DIAL) technology to “cast” content to an Insignia set from a smartphone, alleged a complaint Tuesday (in Pacer) in U.S. District Court in Wilmington, Delaware. Plaintiff Cassiopeia IP owns all “rights of recovery” to U.S. patent 7,322,046 and “is entitled to a monetary judgment in an amount adequate to compensate” it for Best Buy’s infringement, it said. The patent was originally assigned to Siemens in January 2008, Patent and Trademark Office records show. It describes a method for secure use of a network service using a “blackboard on which all usable services are entered,” said the complaint. A blackboard is a software or hardware “component” that stores all available devices and applications a user “can cast to,” it said. The technology embedded in the patent improved network services “at the time of the invention by providing a secure way” to use them, it said. The Insignia TVs perform seven steps of DIAL functionality, all in “direct infringement” of the patent, it said. Best Buy didn’t comment Wednesday.

The U.S.-Mexico-Canada Agreement on free trade “would modernize and strengthen protections for Americans' copyrighted works,” but “takes a decidedly un-modern approach to online copyright infringement that takes place on user-upload websites” like YouTube, blogged Free State Foundation Senior Fellow Seth Cooper Thursday. USMCA “could perpetuate the significantly under-protective notice and takedown system that prevails in U.S. copyright law,” he said. The Trump administration and Congress “should make clear that the USMCA's online infringement provisions are not precedent for future trade agreements,” he said.

In digital markets, “as in all markets,” DOJ’s Antitrust Division “advocates for a careful application of the competition laws that takes into account both the short-term and long-term effects on innovation,” Deputy Assistant Attorney General Roger Alford told the American Chamber of Commerce in Japan Wednesday in Tokyo. “Preserving incentives to innovate is also important to Japan, a leader in innovation and technology,” he said. “American consumers benefit greatly from Japanese inventions across different industries. The Sony Walkman was a breakthrough technology that gave music lovers like me a way to listen to music on the go.” Strong intellectual property protections are “key for unlocking innovation,” he said. The Antitrust Division “has sought to curb the misapplication of antitrust law in this area,” he said. “In our view, there should be no free-standing obligation to license patent rights under antitrust law. Similarly, we believe that an unconditional refusal to license a patent, on its own, does not give rise to antitrust liability. We are concerned that using the antitrust laws to police the exercise of an exclusive intellectual property right ultimately will undermine the incentives to innovate and engage in dynamic competition.”

The Trump administration recognizes the need for “striking the balance of an open research environment and safeguarding American assets and intellectual property,” Office of Science and Technology Policy Director Kelvin Droegemeier wrote Tuesday. He noted “cutting-edge technologies” are shaping American jobs: “The American free market system is unmatched in pushing the boundaries of science and technology, and our continued global leadership is dependent upon removing obstacles to achieve our full potential.”

Immigration and Customs Enforcement agents arrested a Laguna Hills, California, man last week on federal charges he ran a scheme that smuggled $72 million worth of counterfeit Apple and Samsung smartphone parts from China for sale online in the U.S., said the agency Thursday. Chan Hung Le, 44, faces up to 45 years in prison for conspiracy to defraud the U.S. and to traffic in counterfeit goods, among other charges, said ICE. Le, through a company he owns in Irvine, California, called EZ Elektronix, smuggled counterfeit iPhone and Galaxy components and used “various tactics” to avoid detection by U.S., Hong Kong and Chinese customs authorities, it said. ICE alleges Le tried to conceal the scheme by using multiple business names and addresses, plus “virtual offices” and post office boxes, in at least three states. Once the counterfeit products arrived, Le “distributed the parts to the public through various online stores that falsely claimed the parts were genuine,” it said. Attempts to reach Le’s lawyers for comment Monday were unsuccessful.

Apple and Qualcomm announced a patent dispute settlement Tuesday, dismissing all worldwide litigation between the tech companies (see 1903270012). The deal includes an undisclosed payment from Apple to Qualcomm. A six-year license agreement, effective April 1, carries a two-year extension option. The two sides also reached a multiyear chipset supply agreement. Qualcomm closed 23.2 percent higher at $70.45 Tuesday, and Apple closed virtually flat at $199.25.