Last week, the en banc Federal Circuit declined to rehear its November 10, 2015, decision in ClearCorrect v. ITC, 2014-1527, leaving the U.S. International Trade Commission’s (ITC) Section 337 jurisdiction to “material things” that infringe U.S. intellectual property rights. This denial and the 2015 Federal Circuit decision have wide implications for a variety of industry sectors, especially those involved with the Internet of Things or any company that may transfer digital assets across the U.S. border. Regarding the case, this denial restricts the ITC from prohibiting ClearCorrect’s importation of digital files used to manufacture teeth aligners that allegedly infringed complainant Align Technology’s patents. (For more details on the November 10, 2015 decision, see our post, “Living in a Nonmaterial World: Determining IP Rights for Digital Data.”)
In our recent post, Living in a Nonmaterial World: Determining IP Rights for Digital Data, we discussed the potential impact of the Federal Circuit decision in ClearCorrect v. ITC, 2014-1527, in which the appeals court held that the “articles that infringe” are limited to “material things” and thus do not include “electronic transmission of digital data.” The decision limited the regulatory jurisdiction of the U.S. International Trade Commission (ITC) to articles that are considered physical products. The implications of the decision are far-reaching since the Internet of Things touches on most industry sectors. As previously noted, the decision has been supported by open-Internet advocacy groups, characterizing the decision as a “win for the Internet,” while other groups (including the dissent to the opinion) see the decision as a significant setback in the fight against overseas piracy of patented and copyrighted works.
The U.S. International Trade Commission (ITC) regulates U.S. trade and oversees Section 337 investigations that address unfair competition based on alleged infringement of intellectual property rights. The ITC has been a popular alternative to litigation in district courts because of the relatively swift resolution it provides. (Final phases of the investigations typically occur 12 to 18 months from initiation.) However, a 2015 Federal Circuit decision has limited the ITC’s authority to regulate “articles that infringe” U.S. intellectual property rights and that are imported into the U.S. In ClearCorrect v. ITC, 2014-1527, the appeals court held that the “articles that infringe” are limited to “material things” and thus do not include “electronic transmission of digital data.”