US-ITC versus Clear

The US Court of Appeals for the Federal Circuit recently passed a decision against an order of the United States International Trade Commission (ITC) which sought to block the import of digital data that violated patents. The decision was passed on 10th November this year, in the case of ClearCorrect Operating, LLC, ClearCorrect Pakistan (Private), Ltd., v. International Trade Commission and Align Technology, Inc.

Align Technology is a multinational medical device company based out of San Jose, California.  Align Technology filed a patent infringement case in 2012 with the United States International Trade Commission (ITC) when it found that ClearCorrect operating LLC, another US company that provides dental products and services, was infringing on 7 different patents of Align Technology related to system and methods for repositioning teeth, including the US Patent application number US67228800.

ClearCorrects’ mode of operation was simple. They made models of US patients’ teeth, scanned them and converted them to digital data sets, which in turn were transmitted to their branch in Pakistan. ClearCorrect Pakistan manipulated the data, adjusted the data sets, and sent them back to ClearCorrect in the US, where the aligners were created based on the received data. This meant that only digital data sets were imported. ITC, in 2014, found out that the aligners made by ClearCorrect infringed on Align Technology’s patents, and issued a cease and desist order banning ClearCorrect from importing the data sets. ClearCorrect appealed the decision to the Federal court.

The counsel that represented ClearCorrect pointed out the fact that ITC had no jurisdiction over all patentable subject matters. ITC counter-argued that it has authority over electronically imported data under section 337 of Tariff Act of 1930, and that ClearCorrect’s importation of digital models had violated the law.

The Court, primarily observing that there is a fundamental difference between ‘electronic transmissions’ and ‘material things’, concluded that ITC had no jurisdiction over this case, forcing ITC to revoke the cease and desist order they issued. The Court said that ITC’s authority to prevent importation of “articles” applies only to material things and not digital transmissions. The court also rejected ITC’s reasoning that the term ‘article’ under section 337 could include digital information.

While some experts say that the ruling will help to ensure that users have unchained access to the free flow of information and that it will be useful for innovation and free expression, people in industries where digital data and digital data transmission has more prominence, such as Entertainment industry, are of the opinion that the ruling will promote blatant piracy of movies, television programs, books, music, and other copyrighted works.

Authored by Naveen K.M
Contributed by Electronics, Software and Telecommunications team of BananaIP  India

For further information on Electronics, Software and Telecommunications Patent law in India, write to [email protected]

Sources: 1