Federal Circuit Confirms: USITC has no Jurisdiction over Purely Electronic Products

ClearCorrect v. Align (Fed. Cir. 2016)

In its panel opinion, the Federal Circuit held that the USITC jurisdiction over the importation of “articles that infringe” does not extend to the “electronic transmission of digital data”. Rather, Section 337 of the Tariff Act is limited to “material things” as used in common parlance (i.e., beyond an “electron’s invariant mass” that may be associated with a digital transmission). See Dennis Crouch, Federal Circuit Bites Back against USITC Expansion into Electronic Importation, Patently-O (November 10, 2015).  That original panel included Chief Judge Prost who wrote the majority opinion along with Judge O’Malley who also issued a concurring opinion and Judge Newman in dissent.

Following that decision, both the ITC and the patentee (Align) petitioned for en banc rehearing with the following questions:

ITC: Must the term “articles” … be limited to physical products, such that section 337 can be evaded by a respondent that 3D prints products in the United States using imported datasets representing those products

Align: Whether the U.S. International Trade Commission has jurisdiction under 19 U.S.C. § 1337 over the importation or sale of digital articles.

In addition to the statutory language, the briefs particularly focus on two cases: Nat’l R.R. Passenger Corp. v. Boston & Me. Corp., 503 U.S. 407 (1992) (on statutory interpretation), and Suprema, Inc. v. ITC, 796 F.3d 1338 (Fed. Cir. 2015) (en banc) (ITC has power to stop infringing imports if those imports are going to be used to induce infringement of a patent method of use).

With an order issued today, however, the Court has denied the en banc petition. The vote appears to be 11-1.

Judge Newman dissented from the en banc denial:

The court now holds that the word “article” in Section 337 of the Tariff Act cannot include digital goods, although “article” is the general term used throughout judicial and agency rulings for goods in trade, including digital goods. Digital goods are included in the tariff laws; they are imported, bought, and sold; they are subject to the patent laws, and have been the subject of many infringement suits. Infringement does not depend on whether the digital goods are carried on a hard substrate, or electronically.

Section 337 does not depend on the mode of importation; it depends on whether the imported goods infringe a patent or copyright or trademark or design. The amici curiae point out the consequences of the court’s change of law, for infringing imports of books, motion pictures, and other products subject to transmission in digital form. The disruption that this ruling is already causing warrants en banc attention.

The dissent also includes an interesting footnote listing thirty definitions of the term “article” — suggesting that the definition is not so clear.

Chief Judge Prost also drafted an opinion joined by Judges O’Malley and Wallach to “address certain points newly raised by the dissent.”  The basic point is that it is Congress’s failure to “bridge the gap between the non-digital world and the digital world.” As such, the solution should come from Congress as well.

Addressing the thirty definitions, Chief Judge Prost argues that “only a handful” of the definitions support the dissent’s approach.

[Denial of the petition]

69 thoughts on “Federal Circuit Confirms: USITC has no Jurisdiction over Purely Electronic Products

  1. 6

    Judge Pauline Newman was born June 20, 1927. That makes her 89 years old. She has been on Senior Status for years. This 11 to 1 vote of the Fed. Cir. against her views here should be a warning to those who regularly like treat her dissents as useful law.

    1. 6.1

      You quite miss the point of those who laud her views Paul.

      It is very much NOT a “m0b rule” mentality.

      She may be the one simian in the cage that has not succumbed to the fire hose treatment when reaching for the bananas.

      1. 6.1.1

        She may be the only left that actually understands patent law and wasn’t selected by Google to burn the system down.

        Note that she actually practiced patent law and took science courses. Obama appointing a group of people to the Fed. Cir. who didn’t ever take a science course and didn’t practice patent law is shameful. It indicates that Obama has no respect for our system. Simply shameful.

    2. 6.2

      Paul – one correction. Judge Newman has not taken Senior Judge status. She is still one of the 12 active judges.

      1. 6.2.1

        Thanks Pilgrim. I was apparently misinformed about that. [It is a surprise to me for a Federal judge eligible for taking senior status for so many years of combined tenure and age not to have taken it.]
        My point was that the odds of her actively continuing on the Fed. Cir. are increasingly shrinking.
        —————-
        Let me mention a story I really admired hearing about Judge Newman many years ago. Reportedly way back when she was CPC of FMC she integrated the former privileged prestige all white male domain of the Chicago Union League Club by scheduling a meeting there and marching in.

    1. 5.1

      Trump.

      And then you pay him a bunch of money after he’s elected and you tell him what you want in return. Or you threaten to kill him and/or his family. That’s how he rolls. Super smart guy.

  2. 4

    Based on how the concurring opinion was described by the court, Judge O’Malley didn’t just join Chief Judge Prost’s opinion, they seem to be listed as co-authors, with Judge Wallach joining. I don’t recall seeing that before.

  3. 3

    By “article of commerce per se” I mean strictly in the patent sense for ITC purposes.

  4. 2

    Again, easy enough. Non-tangible and consumed by human beings? Not an article of commerce per se. Consumed by non-humans toward some result (e.g. the IP in a 3D design file)? An article so far as the patent laws are concerned.

    A copyright can clearly be violated without an article; and for items consumed by human beings, a copyright is the appropriate form of intellectual property right. A patent is not.

    My proposal works on a policy level, works on an intuitive level, and might even satisfy Judge Newman, if she ever had it in front of her….

    1. 2.1

      A copyright can clearly be violated without an article;

      No.

      Further, your “consumed by” is a m1staken path. At its core, ALL utility is merely a reflection of “consumed by.”

      I “get” that you are attempting a phil0sophical “rewrite” Mr. Snyder, but your insistence on ig n0ring the terrain of patent law tr1ps you up at the onset.

      1. 2.1.1

        I am glad that the CAFC did not use this opportunity to legislate from the bench.

      2. 2.1.2

        You say that again and again, and I point out, again and again, that the consumption test only applies when the result of the method is information. When the result of the method is anything other than information, the test is not used.

        Of course, in your pedantic reductionism it’s all protons and electrons anyway, so I can understand how you would not be able to tell the difference between information and any other phenomena.

        1. 2.1.2.1

          Your “pointing out” misses the point.

          Once again, ALL “results” speak to utility for “consumed by.”

          You seek a difference without a distinction.

          If you try to parse out “claiming ONLY a result” versus those claims that claim more than just that, you will see (provided you are willing to unclench your eyes) that this is nothing more than Malcolm’s inane attempts to move the goalposts from claims with mere elements that may involve “in the mind” to claims that are totally in the mind.

          As I have also pointed out: the thought of software is not software.

          Your desired philosophical end result still blinds you.

        2. 2.1.2.2

          “You say that again and again, and I point out, again and again, that the consumption test only applies when the result of the method is information. When the result of the method is anything other than information, the test is not used. ”

          But there is no justification for the distinction in analysis you want to make, other that : you want to make it.

          1. 2.1.2.2.1

            1. a new drug is a result that is not information Les.

            2. the justification, inter alia, is the actual, literal meaning of the word “abstract”, which is (latin) drawn into, or consumed.

            3. Another endlessly repeated but nonsensical formulation : “the thought of software is not software” . When software executes, information is processed, and that information is somehow used by people. How is using that information “the thought of software”?

            1. 2.1.2.2.1.1

              Run the door opening wires from a controller on the other side of an international border….say from Niagara Falls Canada to Niagara Falls New York… Now Diehr is not infringed?

            2. 2.1.2.2.1.2

              When software executes…

              Software is not the execution of software – the only “nonsensical formulations” are your own, Mr. Snyder.

              Unclench your eyes.

              1. 2.1.2.2.1.2.1

                Q. what is the execution of software anon?

                A. ?

                Q. what is unexecuted software?

                A. Written instructions

                1. It is clearly more than just written instructions.

                  But even on the face of being written, so what?

                  You are aware that certain things – written by the hand of man – are defined to be manufactures, right?

                  You are aware of the exceptions to the judicial doctrine of printed matter, right?

                  Let me guess – you “don’t care” for these parts of the terrain, so you just clench tight your eyes, right?

                  Wake up, son.

                2. “anon”: You are aware of the exceptions to the judicial doctrine of printed matter, right?

                  Super deep stuff!

                  Totally different from subject matter eligibility — as we are constantly told — is impossible for anyone to understand.

                  So say the very serious people who never saw a junk patent they couldn’t embrace.

                3. Absolute rubbish Malcolm – the exceptions to the judicial doctrine fully impinge on subject matter eligibility. Why would you think differently?

                  CLEARLY, in order to have patentable weight, the item under discussion must be patent eligible.

                  So say the very serious people who never saw a junk patent they couldn’t embrace.

                  Who is saying what, exactly…?

                  You have dwelled in the land of spin for so long, you have no c1ue as to what is about you.

                4. “Q. what is the execution of software anon?

                  A. ? ”

                  The execution of software in the performance of a process.

    2. 2.2

      “and for items consumed by human beings, a copyright is the appropriate form of intellectual property right. A patent is not. ”

      So, the drug that cures cancer is not patentable. Its copyrightable?

    3. 2.3

      “A copyright can clearly be violated without an article”

      Say what now?

      How can there be a copy of something without a thing?

        1. 2.3.1.1

          So what?

          The article does NOT support whatever “point” that you think that you are making.

        2. 2.3.1.2

          Yeah so? The article complains about the distribution of applications that make copies of copyrighted material. How does that allegedly support your position that “A copyright can clearly be violated without an article”?

          It clearly does not. In the examples give, there are at least two articles, for example, a youtube video and a copy thereof, or a copy of the audio portion thereof… articles..

          1. 2.3.1.2.1

            You guys are so caught up in your own dogma. Still waiting for any authority on software “defined as a machine component”. Do you ever cite cases anon? Or are cases not part of the legal “terrain” you inhabit?

            Here is a case that says electronic files are not tangible property (e.g. articles in at least one of the thirty or so meanings of the term)

            link to casetext.com

            1. 2.3.1.2.1.1

              MS You guys are so caught up in your own dogma.

              It’s worse than that, Martin. They’re also the world’s biggest crybaby hypocrites that you’ll ever meet.

              Thank goodness they’re so intelligent and articulate, though. It’d be hard to take them seriously otherwise.

              LOL

                1. PatentBob, the acronym for this was established LONG ago (and was subsequently placed on the “Banned” list – go figure, right?)

                  Anywho: it is known as AccuseOthersOfThatWhichMalcolmDoes

                  It has only been a staple of Malcolm’s “rhetoric” for a decade now.

                  Happy Decade of Decadence.

              1. 2.3.1.2.1.1.2

                It’s worse than that, Martin. They’re also the world’s biggest crybaby hypocrites that you’ll ever meet.

                Malcolm being Malcolm…. AccuseOtherswellyouknowthetypicalCRP…

            2. 2.3.1.2.1.3

              It is a definition Mr. Snyder – not a case citeable item.

              (and throwing out there a “na ked” case cite does nothing….)

              1. 2.3.1.2.1.3.1

                So definitions are not established in cases? Why don’t you just put up for once and cite some authority, anywhere in statue or common law that says that software is a machine component?

                The case I cited suggests that data is not considered a tangible article, in support of the point that an article is not needed for a copyright infringement. Another could be the performance of a play without compensating the author.

                This is just another brick in the wall suggesting that copyright is the preferred form of intellectual property protection for software. If you look at Apple v. Samsung, you will see tens of millions spent in legal fees, and in the end, its likely Apple will not even recover that amount, while the Oracle v. Google Android-Java copyright litigation will likely result in the largest damages ever awarded in a copyright case.

                As noted elsewhere, I have evolved toward the acceptance of patents on a narrow kind of new, useful, and fully disclosed algorithms, so long as the infringing activity does not include consumption of the results by human beings.

                Forcing patent law to distort itself into an unrecognizable mess to accommodate the incontrovertible fact that software is intangible/abstract has come at a high price- harming patent protection for inventors of legitimate patentable items and wasted billions by everyone else.

                How this is not clear to the zealots is an interesting question- greed may not even be the answer going forward once the lesson of Oracle v. Google sinks in among the business and legal communities.

                I expect it will sink in last around here….

                1. Data is not software Mr. Snyder.

                  You MISS (and miss badly) at the onset by trying to bring in a non-Useful Arts example with “performance of a play.”

                  Your “bricks in the wall” keep on missing the point that copyright and patent protect different aspects. One single article CAN HAVE multiple aspects.

                  This really is NOT that difficult, yet, you refuse to open your eyes.

                  If you need a case to sink into, try In re Allappat or In re Nazomi.

                  What part of “functionally related are you NOT understanding from the case law of Allapat…?

                  What part of the component change in Nazomi are you NOT understanding?

                  There is NO “forcing patent law to distort itself” – there is just the philosophically minded attempting to distort patent law. What patent law covers remains the same: utility. It just does not matter (to you) that your version of utility is just not in sync with the law as written by Congress, does it?

                2. Can you read anon? The play is subject to copyright- there is no utility requirement for a copyright, but utility can be protected by copyright. Oracle v. Google presumes utility in Java, since that’s how the damages will be calculated.

                  Again you wont put up with any authority to say software is a machine component, because you have none.

                  Name another product that is covered by copyright and patent because of “multiple aspects”.

                  And you deny that patent law has been distorted in order to accommodate items with no physical structure and no relationship to any physical structure?

                3. but utility can be protected by copyright.

                  Utility most definitely can NOT be protected by copyright.

                  You need to get your money back from the Holiday Inn.

                  Again you wont put up with any authority

                  Again you are wrong – I put up authority “needed” (it is a definition) AND put up two cases for you.

                  Your last sentence of “ accommodate items with no physical structure and no relationship to any physical structure?” is clear error – do you really think it is strictly “magic” that makes software actually have utility? There MUST BE a relationship to physical structure – that is WHY software works.

                  You really have taken a giant step backwards here Mr. Snyder. I suggest that you stop pretending that you understand the law in this area, because clearly, you do not.

                4. Structure, sequence and organization (SSO) is used in the United States to define a basis for comparing software to determine if copying infringes on a copyright, even when the second work is not a literal copy of the first.

                  Since structure, sequence, organization and some form of the doctrine of equivalents essentially is the entirely of software, how do you anon determine (on your own?) that copyright does not cover utility?

                  Its not me who is going backward here my friend. And still no cite for “software is a machine component” ?

                  A lot of dancing around to come up with nothing….

                  When Oracle takes home billions we shall see how that affects the teetering tower of software patent doctrine…esp. with more judges now in full revolt against the Alice doctrine (see Robinson in Delaware for instance).

                5. how do you anon determine (on your own?) that copyright does not cover utility?

                  It is not me.

                  It has NEVER been me.

                  It is the law.

                  It has ALWAYS been the law.

                  Learn that first.

                6. You are always with the “software is a machine component”, but only cite your fever dreams as authority.

                  I say that software is a literary work, and I cite 17 U.S. Code § 101, 17 U.S. Code § 102, 17 U.S. Code § 117, which explicitly place computer programs as literary works protected by copyright.

                  The ability of any court or agency to cleanly separate utility from expression in software for patent or copyright purposes is an unsettled legal matter, except of course in your own mind, which is always going to be undiscovered country.

                  What the law says and how the law really works are different propositions.

                  Do I have to state that on a legal blog?

                  Of course utility is explicitly not covered by copyright by statue, but in reality, as in the hard reality of the check google will have to write to oracle, utility is the entire point of the infringement.

                  Likewise design patents are not supposed to protect functional items, but we know where that has gone.

                  Your view of the “law” is no better than mine- so go have a sad about that anon.

                7. You are so completely and sadly mistaken Mr. Snyder.

                  Wake up son – open your eyes to the actual terrain – not the terrain as you would wish it to be.

                  (Looking at the Copyright statutes only has an effect on ONE aspect of software and is by NO means dispositive of the law as you want it to be.

                  You are in simple (but complete) error in your view of the law.

                8. Mr Snyder, see Lotus v. Borland 516 US 233 (1996). Holding, copyrights specifically shall not cover function or utility. Further, if you want IP for the utility or function of software – go get a patent.

                9. Sing the song of multiple aspects, each covered under different IP laws for what each IP law is meant to cover…

                  …or continue to clench tight your eyes to what the laws are here and now, ig noring the terrain upon which you wish to do battle.

                  (that’s not working out too well for you is it? How was your settlement to get out of that lawsuit…?)

    4. 2.4

      Martin your 101 views are just strange. Machines that are working with us to process information. If you use your brain, you will realize in the iron age, the machines did physical things with us. Now in the information age they are intertwined in how we do information processing.

      Your views are so wrong and strange that I wouldn’t even know where to begin with you.

      1. 2.4.1

        Sez you Night. Lots of smart, connected people have read  the paper and found it to be an interesting approach- likely better than what we have today with Alice.

        I didn’t create a judicial exception to eligibility for “abstract ideas”, but I have made a reasonable attempt to define the word “abstract” that comports with the meaning of the word itself.

        You could find a place to begin if you want to- but you just want everything under the sun devised by man to be patent eligible, which is never going to happen in a free society.

        There is nothing strange in asserting that abstraction at eligibility is different than abstraction at patentability. The patent act is bifurcated between the two inquiries to begin with.

        1. 2.4.1.1

          You do realize Mr. Snyder, that “finding it interesting” says nothing about the veracity of the views expressed and the law here and now, right?

          I found your abstract “interesting” – interesting that you had at least twenty mistakes in the abstract alone.

          I do “get” that you conjured up a (w)hole new way of looking at patent law, but your problem remains that you just don’t understand the terrain (read that as history, facts, and law) involved.

  5. 1

    Newman: The dissent also includes an interesting footnote listing thirty definitions of the term “article” — suggesting that the definition is not so clear.

    Funny stuff.

    Signals carrying information that could be used to infringe a patent have been transmitted into this country from outside its borders since before the statute existed and the ITC somehow never claimed jurisdiction over any of them. Was it unclear before or did it recently become unclear because someone at the ITC read an article stating that “3D printing changes everything” or some such nonsense? I’m guessing that Newman doesn’t say.

    1. 1.1

      Yep, articles don’t include electronic transmission of information over a wire. Let Congress change things, but until then…

      1. 1.1.1

        Article means “thing” or “particular thing” a bit of information is a thing, a particular thing.

        1. 1.1.1.1

          Right. That’s why Congress used the term “article” instead of the term “anything, including a bit of information”.

          Same difference.

          But you’re a very serious person, Les! We all need to pay attention to you.

    2. 1.2

      MM: “Signals carrying information that could be used to infringe a patent have been transmitted into this country from outside its borders since before the statute existed”

      Please elaborate. To which signals do you refer?

      1. 1.2.1

        (Not so) oddly, what is glossed over here is the taking of “objective physical things” and making them non-objective.

        To wit, Prof. Crouch writes “i.e., beyond an ‘electron’s invariant mass’” because it is desired to make no difference between the non-tangible “signal” of say a wavelength of light (in the In re Nuitjen sense) and actual physical things (electrons).

        The problem of course is that reality speaks differently. In reality, electrons ARE physical things.

        But let’s just all pretend otherwise – maybe that’s the “Grown-up” thing to do.

        /off sardonic bemusement

        1. 1.2.1.1

          “In reality, electrons ARE physical things.”

          Light is also a physical thing. Think Solar Sail.

          Shrug, energy is also a physical thing.

          Lets not accept ridiculous rulings such as Nuitjen. Push back. Else from where is the force acting on the pendulum to come?

          1. 1.2.1.1.1

            Oh, I agree with you on In re Nuitjen, Les – I was just making a statement that EVEN for argument’s sake, goes beyond whatever “reason” is involved in that case. The duality of light aside, we now have made totally physical particles into non-particles.

            It’s like “magic” (or witchcraft) ;-)

            1. 1.2.1.1.1.1

              With the advent of “String Theory” and the discovery of “spooky interactions” and quantum entanglement of electrons, I’m not so sure electrons are particles in the sense you mean….hence my comments..

              1. 1.2.1.1.1.1.1

                Les,

                ALL of nature (not just electrons) are in that web.

                There is nothing – NOTHING – different for a proton or a neutron as opposed to an electron.

                1. ALL of nature (not just electrons) are in that web. There is nothing – NOTHING – different for a proton or a neutron as opposed to an electron.

                  Deep, deep stuff from Stephen Hawking, Jr! So serious.

                  Maybe later we’ll find out what all this subatomic silliness has to do with calling someone up on the phone and describing the arrangement of their teeth.

                2. calling someone up on the phone and describing the arrangement of their teeth.

                  That’s a nice strawman, as no one is arguing that situation.

                  But you already knew that, didn’t you pumpkin?

                3. “anon” no one is arguing that situation.

                  LOLOLOLOLOL

                  Try to keep up, “anon.”

                  Fyi, you already lost the argument.

                4. calling someone up on the phone and describing the arrangement of their teeth”

                  “lost the argument

                  So, you think that I have lost “the argument” – an argument that I have never been a part of, nor has anyone else been a part of….

                  Or maybe you think it clever to think that you don’t think that no one notices the implicit person doing the calling and the describing in the quote that I copied here…

                  What a schmuck.

        2. 1.2.1.2

          In reality, electrons ARE physical things.

          Go ahead and claim your new useful arrangement of electrons, then, in objective structural terms.

          But wait! That’s too difficult for a deep thinker like you.

          You’re so serious! You’re so important!

          Please keep the laughs coming.

          1. 1.2.1.2.1

            LOL – once again Malcolm wants to make an issue out of the optional claim format of “objective structural terms“…

            Your “You’re so serious! You’re so important!” while you also engage in your usual dust-kicking and “Please keep the laughs coming.” F O O L S no one.

Comments are closed.