As an update to our December 8, 2015 blog post, the U.S. Court of Appeals for the Federal Circuit has refused to rehear a November 2015 panel decision holding that the U.S. International Trade Commission’s (ITC) authority to regulate imported “articles that infringe” U.S. intellectual property rights under Section 337 of the Tariff Act does not extend to the “electronic transmission of digital data.”
The case—ClearCorrect v. ITC, 2014-1527—was an appeal from an ITC investigation of teeth aligners. USITC Inv. No. 337-TA-833. The process for making the accused aligners roughly involved taking a physical model of a patient’s teeth, 3D-scanning the physical model, and sending the corresponding digital file overseas (to Pakistan) where a final tooth-arrangement file was created. ClearCorrect then downloaded the files in Texas from a server in Pakistan, after which the aligners were made in the U.S. via 3D printing from the downloaded files. The ITC found that the digital models infringed patents held by complainant in the investigation (Align Technology) and issued an order to ClearCorrect to cease downloading the models and selling the 3D-printed aligners.
On appeal to the Federal Circuit, a 2-1 panel majority concluded that Section 337 limits the ITC’s jurisdiction to “material things.” In a short opinion concurring with the denial of en banc review, three judges (including the two judges in the original panel majority, Judges O’Malley and Prost) reiterated that position. (The concurring opinion does not address the potential inconsistency, if any, of the panel decision with the Federal Circuit’s recent en banc opinion in Suprema v. ITC, in which the Federal Circuit concluded that the same statutory provision at issue in ClearCorrect provides the ITC with expansive jurisdiction.) Judge Newman, the dissenter in the panel opinion, also dissented from the rehearing denial, reiterating her previous positions that (1) other areas of trade law include electronic importation in the definition of imported goods and merchandise; and (2) the panel majority’s definition of “articles” was artificially narrow, because the ITC could stop the same data if it was imported on a CD-ROM.
Given the support for review from several amicus briefs, it seems likely that the ITC or the complainant will petition the U.S. Supreme Court to hear the case. In the meantime, the decision denying review renders the ITC powerless to assist in remedying intellectual property violations involving emerging technologies like 3D-printing, in which imported, electronically transmitted data is central to the infringement theory.
