Tech advocates triumph as court rejects Internet power for trade panel

An appeals court on Tuesday ruled that the U.S. International Trade Commission (ITC) does not have the authority to block the importation of electronic data from other countries. 

The ruling is a major win for several technology advocates, who had warned that an unfavorable decision would have given the green light for patent and copyright holders to use the trade commission to block U.S. access to foreign websites that contain infringing material. 

{mosads}In some of their more heated rhetoric, the advocates warned that a negative ruling could be used to revive aspects of the failed Stop Online Piracy Act (SOPA), potentially “opening the door to Internet content-blocking efforts rejected by Congress and the public.”

In a 2-1 decision, the U.S. Court of Appeals for the Federal Circuit ruled that electronically transmitted digital data does not fit Congress’s definition of “article,” of which the trade commission has jurisdiction.

“In sum, the Commission repeatedly and unreasonably erred in its analysis of the term ‘article,'” Chief Circuit Judge Sharon Prost wrote in the opinion. “It is not simply a question of the Commission having the choice between two ‘right’ definitions, but instead it represents a systematic pattern of the Commission picking the wrong conclusion from the evidence.”

“If Congress intended for the Commission to regulate one of the most important aspects of modernday life, Congress surely would have said so expressly,” Judge Kathleen O’Malley said about the Internet, in a concurring opinion.

Judge Pauline Newman dissented, saying the majority decision strays from “decades of precedent concerned with digital data, electronic transmission, and infringing importation.”

The ITC has the authority to block the importing of articles that infringe on intellectual property rights, which had traditionally focused on physical, tangible goods. 

The central issue surrounding Tuesday’s case deals with the importation of data necessary to make 3D-printed dental aligners. 

The case was brought by Align Technology — the maker of Invisalign — which successfully urged the ITC to bar rival company ClearCorrect from importing infringing products into the United States. The commission had issued a cease and desist order to a ClearCorrect affiliate in Pakistan, but delayed enforcement while the appeals process happened. 

The quirk that riled tech companies and open Internet supporters is that ClearCorrect did not import physical dental aligners, over which the trade commission has historically had authority. Instead, the company transferred digital files that allowed it to print the dental aligners in the United States. 

The Federal Circuit reversed that decision and found the trade commission does not have jurisdiction over the case. 

The Motion Picture Association of America expressed disappointment in the decision, and hinted that it wants to see the case appealed to the entire Federal Circuit. 

“This ruling, if it stands, would appear to reduce the authority of the ITC to address the scourge of overseas web sites that engage in blatant piracy of movies, television programs, music, books, and other copyrighted works,” the group wrote. 

— Updated at 1:30 p.m.