Federal Appeals Court Curtails the ITC’s Power To Regulate Digital Imports

By Justin Kirschner

The U.S. Court of Appeals for the Federal Circuit has ruled that the International Trade Commission does not have the power to prevent the import of patent-infringing digital files like it may patent-infringing physical goods. Though argued over imported digital models for invisible orthodontic braces, the Federal Circuit’s ruling will reverberate across the intellectual property landscape and be felt acutely in Hollywood and Silicon Valley, two mega-industries battling over digital piracy that were closely watching this case. On one side are the content creators—the movie studios, record labels and the like—who argue that the import of blatantly pirated copyrighted works is killing their industries, and that the ITC should be empowered to stop it at the border. On the other side are the digitally native content transmitters, like Google, and open-internet advocates who hailed the decision as a bulwark against the over-regulation of digital commerce. It remains to be seen if the ruling will be appealed to a full Federal Circuit panel, or even to the Supreme Court.