Washington, D.C. – As abusive patent litigation remains a problem in the U.S. court system, The Internet Association stands in support of legal action to prevent the International Trade Commission (ITC) from stretching its patent law authority to regulate the Internet.
In an amicus brief filed with the U.S. Court of Appeals for the Federal Circuit, The Internet Association argued that the ITC’s position – that the agency has jurisdiction over all electronic signals transmitted into the United States – is an overreach of the Commission’s authority and urged the Court of Appeals to make clear that the ITC cannot enjoin the transmission electronic data. The Internet Association’s brief argues that the ITC’s decision would “risk widespread disruption of the global Internet and to essential American economic interests.”
“This landmark patent law case has enormous implications for cloud computing, the free flow of information between countries and the future of a free and open Internet,” said Abigail Slater, Internet Association Vice President of Legal and Regulatory Policy. “The ITC believes it can use patent law to regulate all electronic data entering the United States. We believe the Commission’s position is unlawful, unenforceable, and harmful to global Internet commerce.”
The amicus brief contends that the ITC overstepped its patent authority in two key regards: (1) that Commission has jurisdiction only over tangible objects, not electronic data; (2) the Commission’s jurisdiction is limited to articles that “infringe,” and that do so when imported.
The case centers on the ITC’s jurisdiction in patent cases. Section 337 of the ITC’s enabling statute allows owners of U.S. intellectual property to seek to block “articles that infringe” a patent from entering the U.S. market. However the term “articles that infringe” has long been defined as tangible objects, and does not include electronic data. Previous court rulings have made clear that digital data cannot be treated as “articles that infringe” because electronic signals cannot be patented. The determination that digital signals are not patentable means that a digital signal cannot be an “infringing article” within the meaning of the ITC’s statute.
“It is extremely important for the Court to clarify that the ITC Act does not extend the scope of exclusive rights beyond the intent of Congress,” continued Slater. “Extending ITC remedies beyond congressional intent will hurt Internet users and threaten large investments in the Internet’s infrastructure.”
Cloud computing realizes enormous efficiencies through economies of scale, allowing users to benefit from reduced cost and increased network reliability. It touches every sector of society – including large and small businesses, schools and universities, and governments. But the cloud can only deliver its benefits to the economy if data can be stored, processed, and served in identical ways throughout the world. Any ITC remedy negatively impacting electronic data transfer into the United States would serve to undermine the benefits of the cloud to customers, both large and small. The ITC acknowledges that an exclusion order is unworkable for electronic data transfers over the Internet because the U.S. Customs and Border Protection Service would be unable to enforce such a remedy. The Internet Association’s brief argues that an ITC cease and desist order is similarly unworkable:
“The [ITC] statute makes clear that the authority to issue cease and desist orders does not extend to cases where an exclusion order is unavailable – a conclusion that is reinforced by the legislative history and the ITC’s prior consistent practice.”
“It is a known fact that patent litigation has run amok and is clogging our court system. The trial bar is now trying to convince the ITC to get into the act. Internet innovators need clear rules, not more uncertainty. We urge the Court to hold that the ITC may not stretch U.S. patent law to enjoin the transmission of data over the Internet.” said Slater.