ITC Ruling Shows Need for Congressional Reform

In August, I wrote a post criticizing the editorial board of The New York Times for espousing Silicon Valley talking points rather than considering the broader aspects of a case concerning the International Trade Commission (ITC).  At issue was the ITC’s claim that it had the authority to enjoin the importation of digital data being used by a company called ClearCorrect to infringe the intellectual property of Align Corporation.  The ITC does have the authority to stop the importation of “articles that infringe” and it argued that “articles” may include digital files; but this week the Federal Court of Appeals rejected the ITC’s claim of authority in this case.  Citing more than ample precedent that the statute does not allow for an interpretation of “articles” to mean anything other than tangible items, part of the decision reads:

Here we conclude that the literal text by itself, when viewed in context and with an eye towards the statutory scheme, is clear and thus answers the question at hand. “Articles” is defined as “material things,” and thus does not extend to electronic transmission of digital data.

Readers should note, however, that the decision is narrowly focused on the definition of the word “articles” and the authority of the ITC based on that definition.  The court is entirely silent regarding any of the broad “free flow of information” criticisms fearful of granting ITC this authority in principle.  In fact, the court concludes thus:

Under these circumstances we think it is best to leave to Congress the task of expanding the stat-ute if we are wrong in our interpretation. Congress is in a far better position to draw the lines that must be drawn if the product of intellectual processes rather than manufacturing processes are to be included within the statute.

In short, the statute and corresponding authority granted to the ITC may be considered by Congress as antiquated in the global digital market, and Congress may consider expanding the statute to anticipate the potential harm of importing intangible “articles” by electronic means.  Indeed, as cited in my first post, the Center for the Protection of Intellectual Property pointed out that this ITC remedy was expressly recommended by the Internet industry as an “alternative” to SOPA.  If granting ITC authority would not have “stopped the free flow of information” in 2011, it is unclear why it would do so in 2015.  Congress should consider broadening the statue to grant ITC this authority for the protection of American companies practicing fair trade.

© 2015, David Newhoff. All rights reserved.

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