Tag: ClearCorrect

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.

No Borders Does Not Mean No Boundaries

Over this past weekend, it seems The New York Times Editorial Board got together, drank a little Googley Kool-Aid, and then wrote this Op-Ed provocatively titled Keep the Internet Free of Borders.  It is dismaying that, under the imprimatur of a respected name, an OpEd is published that succeeds in drawing such a typically blunt conclusion about an otherwise complex and nuanced issue of great importance.  Here’s what’s going on:

Historically, the U.S. International Trade Commission has the authority to block the importation of articles that infringe the intellectual property rights of American companies.  For instance, a U.S. based importer/wholesaler may not import counterfeits of consumer goods, and the ITC is empowered to enjoin such importation and enforce its authority through agencies like customs and border services.  But this past March, for the first time, the ITC concluded that articles under its purview may include the importation of digital files.  (Cue eerie violins.)

The case itself involves the Invisalign brand of dental aligners, which is a patented system owned by Align Technology.  A Texas-based company called ClearCorrect received data from an entity in Pakistan that contained digital models, design information, and treatment plans, which Align Technology argued can only be used “to infringe or induce the infringement” of its patents.  ClearCorrect argued that the ITC’s authority to restrict the importation of infringing articles does not extend to digital data, but the ITC ruled 5-1 in favor of Align after an administrative law judge concurred that the definition of “articles” in the statute does apply to digital imports, consistent with the ITC’s “legislative purpose to . . . prevent every type of unfair act in connection with imported articles . . . and to strengthen protection of intellectual property rights.”  This case has been appealed and was scheduled to be heard in federal court in Washington D.C. sometime today.

If the ITC’s broadening of the term articles under its purview is held to include digital data, this would certainly set a new precedent that will be attractive to owners of intellectual property.  And of course this prospect has not-surprisingly raised the hackles of digital rights proponents, who predict that granting the ITC this authority will “harm the free flow of information on the Internet.”  Unfortunately, this is the recurring narrative every time any entity, private or public, seeks to remedy any of the new forms of harm that are unavoidable byproducts of the new forms of communication, interaction, and data transmission that most of us enjoy.  Hence, editorials like the one from the Times perpetuate the frankly defeatist notion that our only options are either to accept the predations of bad actors or invite legal regimes that can only lead to censorship.

For a more detailed description of the Align case, I recommend this article written by my colleagues at the Center for the Protection of Intellectual Property.  In particular, I would draw your attention to the authors’ revelation that the usual suspects in Silicon Valley, who presently oppose upholding the ITC’s authority in this case were just a few years ago vociferously in favor of copyright owners using the ITC in precisely this manner. As part of that industry’s PR blitz against SOPA and PIPA, they widely supported the proposed OPEN Act, so named because it would “keep the Internet open.”  And as a component of this advocacy, OPEN’s corporate supporters recommended that the ITC was an ideal venue for rights holders to seek relief from entities committing infringement through digital data imports.

So, if nothing else, the Times editorial board might have done a little homework and recognized that if the Internet industry was once in favor of this type of ITC authority and is now opposed to it, this contradiction might awaken some dormant, journalistic instinct to a bit of skepticism.  Instead, the article concludes with an all-to-common statement that I would challenge anyone to define clearly.  It states, “The appeals court should strike down the commission’s ruling, which is bound to hamper the exchange of ideas and information on the Internet.”  I’ve encountered that hampering sentiment so many times, and it still doesn’t make any sense.  If the ITC blocks a shipment of counterfeit Nikes, and fair trade in sporting goods continues, why is it impossible to imagine that an equally narrow application of this same authority may apply to digital imports without harming the larger flow of information, let alone anything as esoteric as “ideas?”

At some point, this narrative has to change — the one that insists there is no way we will ever balance civil order and civil liberty in cyberspace — because every user has a stake in seeking balance, whether the concerns are privacy, personal security, or intellectual property that supports a business in any sector.  The Align case is about dental products, the Equustek case I wrote about involved systems communications hardware, and with advances in 3D printing technology, we can be sure there will be more and more trade in infringing trade secrets and  other intellectual property.  Hence, it should be clear that the growth in these unlawful and predatory practices, unique to the digital age, is already affecting interests far beyond the motion picture, music, and publishing industries.

Whatever the remedies may be, we should constantly demand specifics as to what it means to “harm the free flow of information on the Internet” because it’s not sufficient to accept that the definition is whatever the major internet companies say it is on any given day. (See above mentioned flip-flop on this very subject).  In fact, as Stephen Carlisle points out in this piece for Nova Southeastern University, in the last several months, site-blocking has been ordered in specific cases in the US, Canada, Germany, and Australia, yet here we are, using the Internet to exchange information and ideas.  What began as adolescent rationalizations for file sharing more than fifteen years ago has now metastasized into a social and corporate agenda that is attacking vital organs in our market-based economy.  We can do better.  Balancing civil order with civil liberty is what we’re supposed to be good at in this country.  We should not be afraid to try.