Richard Raysman is a Partner in Holland &
Knight's
New York office
Derrick Hibbard is an Associate in Holland &
Knight's
West Palm Beach office
With the advance of digital technology, courts are being forced to deal with the legal ramifications beyond the borders of the United States. In a previous post, we discussed the potential impact of the decision in Motorola Mobility LLC v. AU Optronics Corp. et al., as it applies to the reach of the Sherman Act.
Recently, another issues has arising concerning whether the U.S. International Trade Commission ("ITC") has the power to block the flow of digital information, and has prompted a deluge of amicus briefs from concerned non-profit organizations, such as The Internet Association, Business Software Alliance, Electronic Frontier Foundation, and Public Knowledge.
These groups filed their respective briefs in opposition to an ITC decision that qualified digital data as an "Article" under its jurisdiction.1
The case from which the ITC decision stems is from a 2011 lawsuit in which Align Technology Inc. ("Align"), sued ClearCorrect Operating, LLC ("ClearCorrect") for infringing its patents relating to a method for making clear braces for straightening teeth. During the ensuing litigation, Align discovered that ClearCorrect was generating digital models of patients' teeth in its overseas offices, and then transmitting the digital data to the United States, where 3-D printers created the molds used to make the infringing appliances.
The matter was brought before an ITC Administrative Law Judge, who found in his initial determination that ClearCorrect was infringing on Align's patents, and recommended that the ITC issue a cease-and-desist order to stop ClearCorrect's import of the infringing digital data.
In July 2014, a full ITC commission partially confirmed the initial determination, but stayed the cease-and-desist order pending a Federal Circuit appeal.
Among the several amicus briefs that have been filed in response to the ITC decision and in advance of the decision from the Federal Circuit, is one by the Electronic Frontier Foundation and Public Knowledge, filed jointly. The non-profits warned the Federal Circuit that the ITC decision could lead to jurisdictional overreach, and contended that if Congress wanted digital information included in the ITC's jurisdiction under the Tariff Act of 1930, it wouldn't have excluded telephone communications and radio and television broadcast from its rule.
The Internet Association, in its amicus brief, stated that cloud computing was an aspect of the internet that would be hindered if the ITC decision be allowed to stand. The association argued that cloud computing realizes enormous efficiencies through economics of scale, allowing users to benefit from reduced cost and increased network reliability, but can only deliver its benefits if the data is stored, processed, and served in identical ways throughout the world.
Conversely, a number of other companies, including Nokia, the Motion Picture Association of America, and the Association of American Publishers, have filed amicus briefs, siding with the ITC decision and arguing that by denying the IT the ability to block electronic infringing transmissions that originate overseas would deprive them of a powerful legal remedy.
Because of the far reaching consequences of any decision arising from the appeal of ITC's decision, additional amicus briefs will likely be filed in support of both parties, and we will post updates on further developments as they occur.
Footnote
1. ITC's authority is derived from the Tariff Act of 1930, wherein it was giving the power to bar imports of products that infringe U.S. patents, or otherwise offer their makers an unfair competitive advantage. The "products" that fell under ITC jurisdiction were generally understood to be visible and tangible objects, things apart from telecommunications data like telephone messages or radio broadcasts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.