One of the great things about the Internet is that it does not have national borders. When a company in Tokyo sends a digital file to a company in New York, the data does not have to clear customs. But
One of the great things about the Internet is that it does not have national borders. When a company in Tokyo sends a digital file to a company in New York, the data does not have to clear customs. But the outcome of a federal appeals court case could hinder that free flow of information.
The case involves digital files containing information on dental aligners, used to straighten teeth, sent over the Internet by a company in Pakistan to a business in Texas. Last year, the U.S. International Trade Commission, a relatively obscure federal agency, ruled that the Texas company, ClearCorrect, could not import those files because they violated patents owned by Align Technology. ClearCorrect has appealed the decision to the U.S. Court of Appeals for the Federal Circuit in Washington D.C., which is scheduled to hear the case on Tuesday.
The ITC has long had the power to forbid companies from importing physical goods like electronics, books and mechanical equipment that violate the patents, copyrights and trademarks of American businesses. It does so by ordering customs officials to seize items at the border or by issuing cease and desist orders to importers. The commission’s order to ClearCorrect was the first time it had sought to bar the transfer of digital information. If the appeals court upholds this decision, it could set a precedent that would allow businesses to seek to block all kinds of data transmissions.
Of course, businesses should be able to protect their patents and copyrights. But there are far better ways to do so. In this case, for example, Align could sue ClearCorrect and seek damages for patent infringement. Or the company could ask a judge to order ClearCorrect to stop selling products made using the information contained in the files.
It is not even clear that the commission has the authority to restrict international data transfers. Congress has given it authority to block the import of “articles,” which for decades has been understood to mean physical goods. In last year’s ruling, a five-member majority of the commission ruled that the word “article” includes data.
Groups like the Motion Picture Association of America and the Recording Industry Association of America are supporting the commission’s view. They argue that, as trade increasingly becomes digital, the definition of “article” should include data. The Internet Association, which represents companies like Facebook, Google and Twitter, is asking the court to reverse the decision.
At some point, Congress may have to step in. Because it defines the limits of the commission’s authority, Congress should decide whether the changing nature of international trade requires the government to apply the same rules to data that it does to physical goods. History suggests that it might not be sympathetic to the commission’s position. In response to opposition from Internet users, Wikipedia, Google and others, Congress did not approve proposals that would have allowed movie studios and record labels to block foreign websites that were alleged to have violated copyrights.
The appeals court should strike down the commission’s ruling, which is bound to hamper the exchange of ideas and information on the Internet.
© 2015 The New York Times Company
