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The scope of the United States International Trade Commission’s ability to prevent infringement from abroad may have just been significantly reduced. On March 31, 2016, the Federal Circuit Court of Appeals issued an order denying petitions by the International Trade Commission (“ITC”) and Align Technology, Inc. seeking a rehearing en banc of the Federal Circuit’s November 10, 2015, opinion in ClearCorrect v. Intl Trade Commn, 810 F.3d 1283 (Fed. Cir. 2015), which had held that the ITC’s jurisdiction under 19 U.S.C. section 1337 extended only to “material things,” and did not cover the electronic transmission of digital data. (For further discussion of the November 10 ClearCorrect Opinion, see my previous post here, and Lisa Baird’s post in Reed Smith’s Life Sciences Legal Update here). The Order was nearly unanimous, with only Judge Pauline Newman filing a lengthy dissent. With a rehearing and potential reversal by the full Federal Circuit bench now officially off the table, only a reversal by the Supreme Court or an Act of Congress can bring digital transmissions within the ITC’s jurisdiction. And a petition to the Supreme Court may be forthcoming. Shortly after the Order was issued, Align Technology released a statement to its investors, indicating that Align was “conferring with the Commission regarding appropriate next steps, including the possibility of seeking review from the Supreme Court.”
Continue Reading Update: Federal Circuit Declines to Reconsider ITC Jurisdiction over Electronic Transmissions of Digital Data

The ITC does not have jurisdiction over digital data transmitted into the United States from abroad, according to a recent Federal Circuit ruling related to 3D printing.

On November 10, 2015, in a decision that could have a significant impact on the 3D printing and other industries, the Federal Circuit held in ClearCorrect Operating LLC v. Intl Trade Comm’n , No. 2014- 1527 (Fed. Cir., Nov. 10, 2015), that the International Trade Commission lacked jurisdiction over the electronic transmission of digital data. Writing for the panel in a 2-1 decision, Chief Judge Prost held that U.S.C. section 1337(a) gives the ITC jurisdiction only over unfair acts involving the importation of “articles,” which the Federal Circuit interpreted to mean “material things.” The court found that the ITC lacked jurisdiction over cross-border transmissions of digital data because digital data is not a “material thing.”

The Federal Circuit’s ruling overturned the underlying Commission opinion, which held that 19 U.S.C. section 1337(a) confers to the Commission jurisdiction over “all possible forms of infringement,”including jurisdiction over infringing electronic transmissions of digital data. Because the literal text of U.S.C. section 1337(a), when viewed in the context of the Tariff Act, is clear as to the meaning of the term “articles,” the Federal Circuit found that the Commission’s interpretation of its own jurisdictional reach was not entitled to deference under Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).
Continue Reading Federal Circuit’s ClearCorrect ruling impacts ITC ability to police 3D printing and other disputes involving digital data transmission