ITC Declines to File Petition for Certiorari – CAFC Holding that ITC Does Not Have Jurisdiction over Digital Imports Stands
The deadline has come and gone for the ITC and patentee Align to file petitions for certiorari seeking review by the Supreme Court of the Federal Circuit’s decision in ClearCorrect. On November 10, 2015, a panel of the Federal Circuit found that the ITC does not have jurisdiction to bar digital downloads or imports where there was no physical article to bar from importation. After the panel decision, the ITC and the patentee Align submitted a petition for rehearing en banc, which was denied on March 31, 2016. The deadline for further appeal was August 26 and neither the ITC nor Align filed for certiorari.
In the underlying ITC investigation instituted in April 2012, Align Technology claimed that Respondents ClearCorrect Pakistan and ClearCorrect Operating LLC infringed claims of seven patents relating to a system and methods for repositioning teeth. ClearCorrect made models of U.S. patients’ teeth which were then scanned and converted into digital data sets, which were then transmitted to Pakistan. In Pakistan the data sets were manipulated, and the adjusted data sets were sent back to ClearCorrect in the United States, where they were used to create the aligners used by the patents via 3D printing. Thus, no physical articles were imported – the only item imported was a digital data set. In April 2014, the ITC found that ClearCorrect infringed the patents, and issued exclusion and cease and desist orders barring ClearCorrect from importing the data sets.
The ClearCorrect case received a great deal of attention because of its potential implications for the breadth of the ITC’s jurisdiction and the entertainment and software industries. As much of music, software, and film piracy occurs via transmission or download rather than physical importation, the Commission decision gave the entertainment and software industries a powerful tool to fight piracy. In addition, the Commission opinion reassured patentees that infringers could not bypass ITC jurisdiction by using 3D printing to create products in the United States.
On appeal, in November 2015 the Federal Circuit determined that the ITC does not have jurisdiction over such digital downloads, because the statute requires there to be a physical article for the ITC to have jurisdiction. Here, no physical article was imported; only digital downloads. The decision was seen as a blow to the entertainment and software industries and the ITC and Align submitted petitions for rehearing en banc, which were denied.
Now that the deadline for filing a petition for certiorari has passed, the Federal Circuit panel decision is binding precedent on the ITC for future cases, and leaves it to Congress to determine whether the ITC will have the power to bar digital downloads from importation. Without a change to the statute governing the ITC and digital downloads like the ones at issue in ClearCorrect will not be considered imports for the purposes of Section 337.
Read more of our coverage of ClearCorrect.
Authors
Daniel Weinger