Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology 

Transfer, Intellectual Property, and Innovation - Form to Request Exclusion of Product 

When submitting a product exdusion request using this form, enter the specified 

information in the following fields and explain the basis and rationale for your statements. 

By completing this form, you certify that the information provided is complete and 

correct to the best of your knowledge. 

1. Indicate whether the comment contains business confidential information (BCI), is a public 

document, or is a public version of a BCI document. 

Public Version of BCI 

2. Please provide a complete and detailed description of the product of concern: 

Handheld, wireless enabled colorimeter. Please see attached for detailed description. 

3. 10-digit HTSUS item number* for product you wish to address in this product exclusion request: 

*Use numerical characters only with no special characters (example: 1023456789). For help in finding 

the HTSUS item number associated with your product, see https://hts.usitc.gov/ 

9027504060 

4. Requestor Information 

Requestor Name (Last, First): 

Organization Name: 

Busch, Albert 

Datacolor, Inc. 

Note: Representatives submitting on behalf of an organization must enter information below. 

Requestor Representative: Sarah Nappi, Latham & Watkins, LLP 

5. Requestor's relationship to the product: Importer 

6. Does this submission in regulations.govinclude additional attachments? 

YES 

7. Please indicate whether any additional attachment contains business confidential 

information (BCI), is a public document, or is a public version of a BCI document. 

Public Version of BCI 

VERSION 1 CONTINUED BELOW 1 
8. Is this product, or a comparable product, available from sources in the United States?: 

YES 

9. Is this product, or a comparable product, available from sources in third countries?: 

YES 

10. Please provide the value and quantity (with units) of the Chinese-origin product of concern 

that you purchased for each calendar year specified. Limit this figure to the products 

purchased by your firm (or by members of your trade association) alone. Please provide 

estimates if precise figures are unavailable. 

2017 Value: [ ] 2017 Quantity: [ ] 

2016 Value: [ ] 2016 Quantity: [ i 

2015 Value: [ ] 2015 Quantity: [ ] 

11. Please provide information in support your request, taking account of the instructions 

provided in Section B of the Federal Register notice (note: text entered below can extend 

beyond the apparent size of this box). 

Please see attached. 

VERSION 1 END 
5 Princess Road 

Lawrenceville, NJ 08648 USA 

Phone: +1 609.924.2189 

Fax: +1 609.895.7472 

www.dotacolor.com 

datacolor 

PUBLIC VERSION 

September 21, 2018 

SUBMITTED ELECTRONICALLY VIA REGULATIONS.GOV 

The Honorable Robert E. Lighthizer 

United States Trade Representative 

Office of the United States Trade Representative 

600 17th Street, N.W. 

Washington, D.C. 20508 

Re: Docket Number USTR-2018-0025 

Request for Exclusion of Handheld, Wireless Enabled Colorimeters, 

Classified in HTSUS 9027.50.4060, From Tariff Imposed Under 

Section 301 of the Trade Act of 1974 

Dear Ambassador Lighthizer, 

Datacolor, Inc. ("Datacolor) submits this letter in response to the decision by the Office of the 

U.S. Trade Representative to impose a supplemental 25 percent tariff on U.S. imports of certain 

goods of Chinese origin pursuant to the Investigation into China's Acts, Policies, and Practices 

Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of the 

Trade Act of 1974. For the reasons set forth below, Datacolor respectfully requests that U.S. 

imports of handheld, wireless enabled colorimeters, classified within subheading 9027.50.4060 

of the Harmonized Tariff Schedule of the United States ("HTSUS"), be excluded from the 

application of this supplemental tariff. 

This request contains business confidential information ("BCI") that would not customarily be 

released to the public, and the disclosure of which would endanger trade secrets or profitability. 

BCI is identified by the use of brackets, and we are submitting a public version of our request 

with BCI redacted. 

l. Company Background 

Datacolor is a U.S. company headquartered in Lawrenceville, New Jersey. It is a global leader 

in color management solutions, providing software, instruments, and services to assure 

accurate color of materials, products, and images. The world's leading brands, manufacturers, 

and creative professionals have used Datacolor's innovative solutions to consistently achieve 

Commifted to Excellence. Dedicated to Quality. Certified tols0 9001 in Manufacturing Centers Worldwide. 
The Honorable Robert E. Lighthizer 

September 21, 2018 

Page 2 

PUBLIC VERSION 

the right color for more than 45 years. Datacolor's customers include companies in the textile 

and apparel, paint and coatings, and automotive industries, as well as individual consumers 

who purchase its color measurement tools for interior design, home improvement, photography, 

and visual arts applications. 

Datacolor is a wholly-owned subsidiary of a Swiss parent company, Datacolor AG, which also 

has business operations in the European Union, Latin America, and Asia. Datacolor employs 

over [ ] people in the United States, who are engaged in research and development ("R&D"), 

manufacturing, sales and marketing, and management functions. Based on the R&D performed 

in the United States by U.S. employees, Datacolor contracts with its affiliated company, 

Datacolor Technology (Suzhou) Co., Ltd. ("DTS"), for the manufacture of certain products in 

China that are exported to the United States or sold through Datacolor AG to other markets 

around the world. Datacolor's U.S. operations also consist of assembling full color management 

systems for the retail paint market, servicing Datacolor instruments, conducting pilot production, 

and engaging in laboratory work for building the paint databases that support Datacolor's 

proprietary software applications. 

DTS is a wholly foreign-owned enterprise ("WFOE'). Like Datacolor, it is a wholly-owned 

subsidiary of the Swiss parent company, Datacolor AG. DTS has approximately [ ] 

employees, and its 50,000 square foot manufacturing facility (owned by Datacolor AG) is 

located in the Export Zone of Singapore Industrial Park in Suzhou, China. DTS has been in 

operation since 2008 and has never had any Chinese ownership. It is the main manufacturing 

location for Datacolor AG's worldwide operations. 

11. Description of Product 

The product for which Datacolor seeks an exclusion from the supplemental tariff is a handheld, 

wireless enabled colorimeter. It is used primarily by professional painters, contractors, and 

home decorators to obtain high quality color matching by measuring the color reading of a 

sample (for example, a fabric swatch, a painted surface, or a piece of artwork) and matching it 

corresponding paint colors in known paint company databases. It is a cylindrical handheld 

device approximately 2.7 inches long, 1.1 inches in diameter, and 1.6 ounces in weight. It 

contains a micro USB port and pairs to the user's smart phone via a wireless connection to use 

Datacolor's mobile application ("mobile app") to match colors, work with known paint company 

fan decks, and create palettes within the mobile app. It is imported with a micro USB cable. 

Photographs of the product are provided in the attachment for additional reference, along with 

proposed tariff language. The product is classified in HTSUS subheading 9027.50.4060. 

Information on the values and quantities of Datacolor's purchases of this product in calendar 

years 2015, 2016, and 2017 is provided in the "Form to Request Exclusion of Product" that 

accompanies this submission. [ 

5 Princess Road, LawrencevIle NJ 08548 USA P .1 609 924 2189 F ,1 609 895 7472 

www.datacolor.com 
The Honorable Robert E. Lighthizer 

September 21, 2018 

Page 3 

PUBLIC VERSION 

111. Reasons for Exclusion 

Datacolor respectfully requests that the handheld, wireless enabled colorimeters be excluded 

from the supplemental tariff for the following reasons. The manufacture of this product in China 

does not implicate any of the concerns described in the Section 301 investigation that led to the 

imposition of the 25 percent tariff. Moreover, this product or a comparable product is not 

available to Datacolor from any other source. Finally, the imposition of a 25 percent tariff on 

imports of this product would have a severe economic impact on Datacolor's business 

operations and damage its otherwise successful growth strategy for U.S. R&D and product 

innovation and its growing U.S. sales and support organization. 

A. The handheld, wireless enabled colorimeters are not strategically important 

or related to "Made in China 2025" or other Chinese industrial programs. 

Imposing a supplemental tariff on U.S. imports of handheld, wireless enabled colorimeters is not 

warranted by any of the specific concerns identified in the Findings of the Investigation Into 

China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and 

Innovation Under Section 301 of the Trade Act of 1974 published by the Office of the U.S. Trade 

Representative on March 22, 2018 (hereafter, the "Section 301 Report"). Specifically, this 

product is not within any of the categories identified by China as strategically significant to its 

economic and national security goals, and it is manufactured under circumstances that have 

insulated it from the types of trade practices that were identified in the Section 301 Report. 

According to the Section 301 Report, the "Made in China 2025" program focuses on ten 

strategic industry areas: (1) advanced information technology; (2) robotics and automated 

machine tools; (3) aircraft and aircraft components; (4) maritime vessels and marine 

engineering equipment; (5) advanced rail equipment; (6) new energy vehicles; (7) electrical 

generation and transmission equipment; (8) agricultural machinery and equipment; (9) new 

materials; and (10) pharmaceuticals and advanced medical devices. 

Datacolor's handheld, wireless enabled colorimeters are not used in any of these industries. 

Rather, as noted above, these are color measurement tools used by professional painters, 

contractors, and home decorators. They are not implicated by the concerns expressed in the 

Section 301 Report regarding China's efforts to achieve domestic dominance in the specified 

technological areas. Notably, the color management industry is a relatively small market, which 

Datacolor estimates (based on a recent detailed market study) at about US $[ ] in 

yearly revenues worldwide. This is not an area in which China has expressed strategic interest 

for economic or national security reasons. 

Furthermore, Datacolor's handheld, wireless enabled colorimeters and their manufacture in 

China are not subject to any of the circumstances or trade practices identified in the Section 301 

Report as being unreasonable or discriminatory and as placing a burden or restriction on U.S. 

commerce. Specifically: 

• DTS has not been the subject of any foreign ownership or investment 

restrictions. As noted above, DTS is wholly owned by a Swiss parent company 

and has never had any Chinese ownership in its ten years of operation. The 

5 Princess Road LawrenceviEle f‘U 08548 USA P +1 609 924 2189 F í 509 695 7466 

www.datacolor.com 
The Honorable Robert E. Lighthizer 

September 21, 2018 

Page 4 

PUBLIC VERSION 

Section 301 Report itself distinguishes the level of control and protection 

available to WFOEs operating in China as opposed to joint ventures. 

• DTS has not been forced to transfer technology to the Chinese government in 

exchange for administrative licensing or approvals. 

• DTS has not been the subject of mandatory adverse licensing terms, and indeed 

has not licensed any Datacolor technology to any Chinese entity. 

• To Datacolor's knowledge, China has made no effort to acquire technology in the 

color management industry through foreign direct investment in the United 

States. 

• To Datacolor's knowledge, China has made no effort to conduct cyber intrusions 

into U.S. commercial networks for the purpose of obtaining confidential business 

information in the color management industry. Furthermore, Datacolor is not 

aware of any breach or attempted breach of the information technology systems 

of either Datacolor or DTS during the ten years that DTS has been operating in 

China. 

In addition, Datacolor takes significant steps to safeguard its intellectual property in the context 

of the China manufacturing operations. Datacolor performs all of its R&D work outside of China, 

and the vast majority of this R&D occurs in the United States. All of the software and algorithms 

needed for the manufacture or operation of Datacolor's products is developed in the United 

States, and all source code remains in — and is protected in — the United States. Datacolor and 

Datacolor AG own all of the worldwide patents for Datacolor's products, including patents filed in 

China. 

Thus, based on the corporate structure and the circumstances of DTS manufacture of 

Datacolor's products, imposing a supplemental tariff on U.S. imports of the handheld, wireless 

enabled colorimeters would not advance the U.S. government's interests in connection with the 

concerns expressed in the Section 301 Report. The product is not in an industry of strategic 

importance to the Chinese government, and is not subject to any of the unreasonable, 

burdensome, and restrictive trade practices that led to the U.S. government's decision to assess 

the tariff. It should therefore be excluded. 

B. The handheld, wireless enabled colorimeters are available to Datacolor 

only from China. 

The handheld, wireless enabled colorimeters are available to Datacolor only from China, as they 

are manufactured specifically for Datacolor by DTS. There is no vendor other than DTS from 

which Datacolor could buy these colorimeters, as the only comparable colorimeters on the 

market are manufactured by Datacolor's direct competitors. To the best of Datacolor's 

knowledge, these comparable products are manufactured in the United States, China, and 

Canada. 

5 Princess RCac Lacíccccl EF4SUR P 1 FP9 92-1 29 F .1 609 895 7472 

www.datacolor.com 
The Honorable Robert E. Lighthizer 

September 21, 2018 

Page 5 

PUBLIC VERSION 

C. The imposition of additional duties will cause severe economic harm to 

Datacolor and inhibit the company's U.S. growth and innovation strategy. 

Datacolor is a relatively small U.S. company and cannot bear a 25 percent tariff on its imports 

without suffering severe economic harm to its business. [ 

] Thus, the tariff threatens [ ]. Given 

the competitive nature of the industry, it is simply not possible for the company to pass a 25 

percent price increase through to its customers. Accordingly, Datacolor expects the tariff to 

result in [ ] for the U.S. business, which 

will have a severe impact on the company's profitability and its ability to continue investing in its 

R&D and growth strategies. As noted above, Datacolor cannot simply purchase the handheld, 

wireless enabled colorimeters from another supplier outside of China. 

Nor is it economically feasible for Datacolor to move its manufacturing to a location other than 

China. Given the company's small volumes, exclusive and long-standing supplier relationships 

within China, and long-term investment in the Datacolor-affiliated manufacturing site in China, 

relocating the manufacturing operations would be extremely disruptive. This would require 

Datacolor's Swiss parent company to relocate its entire supply chain (which supports global as 

well as U.S. operations) and take substantial losses of its capital expenditures in China. 

Datacolor estimates that it would easily take over two years to make such a transition, and the 

costs to the company could be in the millions of dollars. 

Datacolor is a U.S. company dedicated to growth and innovation, and prides itself on its 

contributions to the U.S. economy. The company has its operational headquarters in the United 

States, from where the worldwide business is managed. All of Datacolor's innovation in the 

niche field of color management has been created through people who are employed in the 

United States. In recent years, the company has substantially increased the number of its U.S. 

employees and has a strong drive to continue to grow through innovation, giving its customers 

new solutions and tools to become more effective. The supplemental tariff imposed on 

Datacolor's imports from China is significantly impacting the company's ability to invest in its 

growth and innovation strategy. The company [ 

as it struggles to navigate the impact of the new tariff and the uncertainty it creates for the 

company and its customers. 

lV. Conclusion 

Datacolor wishes to continue its growth and innovation strategy and invest in what it does best 

here in the United States, which is developing new color management solutions for the future. 

Its products do not have strategic economic or national security significance for China, and have 

not been identified or targeted by China for the application of unreasonable, discriminatory, and 

burdensome trade practices as specified in the Section 301 Report. Datacolor's affiliated 

Chinese manufacturer is a WFOE not susceptible to such practices, and Datacolor has 

successfully protected its U.S.-owned intellectual property throughout a ten-year history of 

manufacturing in China. 

5 Pnncess Road Lawrenceville NJ 08648 USA P 1 609 924 2189 F +1 609 895 7472 

www.d ataco lo r. co m 
The Honorable Robert E. Lighthizer 

September 21, 2018 

Page 6 

PUBLIC VERSION 

Datacolor cannot obtain the handheld, wireless enabled colorimeters outside of China, as they 

are manufactured specifically for Datacolor. Datacolor could not move the manufacturing of its 

products out of China without a years-long, extremely expensive investment in relocating the 

entire supply chain. Bearing the cost of the tariff while being unable to pass through a price 

increase to customers will have a severe financial impact on this small but otherwise growing 

and successful U.S. company. 

Therefore, Datacolor respectfully requests that the Office of the U.S. Trade Representative 

grant an exclusion from the supplemental 25 percent tariff for the handheld, wireless enabled 

colorimeters described in this letter. Datacolor certifies that the information provided with this 

request is complete and correct to the best of our knowledge. 

Sincerely, 

Albert Busch 

President and CEO 

Attachment: Product Description, Proposed Tariff Language, and Photographs 

5 Phncess Road Lawrence:dile NJ Cl8E48 USA P +1 609 924 2189 F +1 609 895 7472 

www.dataco lo r. co m 
The Honorable Robert E. Lighthizer 

September 21, 2018 

Page 7 

PUBLIC VERSION 

Attachment: 

Product Description, Proposed Tariff Language, 

and Photographs 

Product: Handheld, Wireless Enabled Colorimeter 

• Colorimeter used primarily by professional painters, contractors, and home decorators to 

obtain high quality color matching of samples to corresponding paint colors in known 

paint company databases. 

• Cylindrical handheld device approximately 2.7 inches long, 1.1 inches in diameter, and 

1.6 ounces in weight. 

• Contains a micro USB port and pairs to user's smart phone via wireless connection to 

use mobile app. 

• Imported with a micro USB cable. 

• HTSUS classification: 9027.50.4060 

Proposed tariff language: "Handheld, wireless enabled colorimeters designed for use with a 

mobile phone application, of a length not exceeding 3 inches and containing a micro USB port" 

Co/orReader 

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5 Pnncess Road Lawrenceville NJ 08648 USA P 609 924 2189 F 1 609 895 7472 

www.datacolor.com