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Federal Circuit Confirms That Obscure Trade Court Cannot Regulate the Internet

DEEPLINKS BLOG
November 10, 2015

Today, in a strong opinion from the Federal Circuit, an attempt for rightsholders to use an obscure trade court to block the “importation” of digital data was rejected. The Federal Circuit held that a court that has the ability to block “articles that infringe” does not have the ability to block digital data.

As we previously wrote, ClearCorrect v. ITC involves patents on digital dental sets. The patent owner argued that the International Trade Commission (ITC), an executive agency trade court, had the ability to block purely digital data at the border if that data were found to infringe a US patent. The ITC agreed with the patent owner, holding that “articles” within the meaning of the statute that gives the ITC authority could be interpreted broadly to include not only material goods, but also data.

Today, the Federal Circuit rejected that position. The Court first looked at the plain meaning of the word “articles.” The Court found that dictionaries from both around the time the statute was enacted (1920s) and today did not support a broad meaning of “article” to include pure digital data.

Next the Court looked at how the term was used in the statute. It found that reading the word “articles” to include data would make several provisions of different parts of the same act either meaningless or unreasonable. For example, another section states that the ITC could order forfeiture of the infringing article. The Court rightly pointed out that it makes no sense to argue that digital data can be “forfeited.”

The Court also looked at the legislative history of the statute, and found nothing that indicated Congress intended the word “articles” to encompass digital data.

Finally, the Court rebuked the ITC, in holding that its interpretation of the term “articles” was unreasonable. Notably, the Federal Circuit pointed out that the “main evidence” the ITC relied on was actually a misquote of the legislative history. The misquote had the effect of making it seem like the ITC had broad, unlimited authority when in fact it was limited by the omitted words “in the importation of goods.”

This is a win for the open Internet. As we previously noted, if the ITC decision had been upheld, it could have opened the door for companies to push for site blocking. The public, however, had soundly rejected that option in the ill-fated attempt to get SOPA passed. Now, the Federal Circuit has rejected the attempt to get it through the back door at the ITC. 

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