On March 31, 2016, the Federal Circuit denied the United States
International Trade Commission's ("ITC") petition to
rehear en banc its November 2015 holding that the ITC
lacks authority over the importation of electronically transmitted
digital data. See ClearCorrect Operating, LLC v.
ITC, 2014-1527 (Fed. Cir. Mar. 31, 2016).
The case arose in the context of patents related to orthodontic
alignment technology. However,
as we noted in November 2015, the Federal Circuit's narrow
interpretation of the meaning of the word "article" in 19
U.S.C. § 1337 as "material things" also has serious
implications for the ITC's ability to enforce both software
patents and copyrights. ClearCorrect, Inc. v. Int'l. Trade
Comm'n, 810 F.3d 1283 (Fed. Cir. 2015).
Judge Newman dissented in the November 2015 decision, arguing that
the statute should be interpreted to cover evolving technology, and
dissented again from the denial of en banc review. Amicus
briefs supporting rehearing were filed by the International Trade
Commission Trial Lawyers Association, the International Center for
Law and Economics, the Motion Picture Association of America and
the Recording Industry Association of America, and the Association
of American Publishers. ClearCorrect Operating, LLC v.
ITC, 2014-1527 at *9, n.1 (Fed. Cir. Mar. 31, 2016) (Newman,
J., dissenting).
Ramifications of the Decision
The Federal Circuit's holding limits the ITC's ability to enforce IP rights in electronically transmitted digital data—whether in the patent or copyright context. Its potential impact is reflected in the numerous amicus briefs filed in the case. Given the importance of the issue, the dissent of a respected judge, and the conflicting views of numerous amici, it is possible that ClearCorrect will be further reviewed by the United States Supreme Court. Absent intervention by the Supreme Court, it will be left to Congress to ensure that the relevance of the ITC evolves along with the digital economy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
