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Federal Circuit Denies Reconsideration of Its Decision that the ITC Lacks Jurisdiction Over Electronic Transmission of Digital Data

Federal Circuit Denies Reconsideration of Its Decision that the ITC Lacks Jurisdiction Over Electronic Transmission of Digital Data

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.

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