Court Ruling On Trade Dispute Also Prevents MPAA From Blocking File-Sharing Sites

The internet can be very weird sometimes, as can the massive patchwork of regulation and case law that holds the world together. And so it came to pass this summer that we found ourselves looking at an otherwise-obscure court case about braces — yes, the teeth kind — that could upend the way the entire internet works in the name of preventing media piracy. Happily, it looks like the internet, in all its chaotic and sometimes illegal glory, gets to keep marching on for the time being.

An appellate court heard the case in August, and delivered its ruling (PDF) yesterday.

The background is a little complicated. Specifically, this case is all about orthodonture patents: One company has a patent for a device. Another company had its Pakistan-based branch email over files that would allow them to print remarkably similar devices from a 3D printer in Texas.

The company holding the patent argued this was infringement. The International Trade Commission — the regulatory body that handles imports and fakes — agreed, finding that importing digital blueprints was the same thing as actually importing devices. That, in turn, opened up a whole new can of digitized worms, because trade groups like the MPAA and RIAA got all ready to take advantage of a trade regulatory agency’s new authority to go after any business that sends IP-infringing files around the world.

Back in August, a senior attorney for the MPAA told the Wall Street Journal that the ITC’s approach “matches up well with some of our current problems,” and added that if the commission “is limited to just physical goods, the ITC will end up in the historical dustbin because everything these days is moving toward electronic importation.”

So the company that was doing the digital file transfers filed an appeal of the ruling, which was heard by a three-judge panel over the summer. The ruling itself is full of technical explanations both of dental appliances and also of the law and the case history. The majority opinion, however, holds that the question of what “articles” the ITC can regulate the importation of is limited to actual physical, tangible goods — not digital ones.

Chief Circuit Judge Sharon Prost wrote in her ruling: “The Commission’s decision to expand the scope of its jurisdiction to include electronic transmissions of digital data runs counter to the ‘unambiguously expressed intent of Congress.’ … Here, it is clear that ‘articles’ means ‘material things,’ whether when looking to the literal text or when read in context ‘with a view to [the term’s] place in the overall statutory scheme.’ We recognize, of course, that electronic transmissions have some physical properties — for example an electron’s invariant mass is a known quantity — but commonsense dictates that there is a fundamental difference between electronic transmissions and ‘material things.'”

Judge Kathleen O’Malley, in a concurrence, added, “The [ITC] has concluded that it has jurisdiction over all incoming international Internet data transmissions. It reaches this conclusion despite never having purported to regulate Internet transmissions in the past, despite no reference to data transmissions in the statute under which it acts, despite an absence of expertise in dealing with such transmissions, and despite the many competing policy concerns implicated in any attempt to regulate Internet transmissions.”

“The Internet is ‘arguable the most important innovation in communications in a generation,'” O’Malley continued, citing a 2010 case argued out between Comcast and the FCC. “If Congress intended for the Commission to regulate one of the most important aspects of modern-day life, Congress surely would have said so expressly.”

The MPAA expressed “disappointment” at the ruling, saying in a statement that, “This ruling, if it stands, would appear to reduce the authority of the ITC to address the scourge of overseas websites that engage in blatant piracy of movies, television programs, music, books and other copyrighted works.”

Consumer advocates hailed the ruling, however, with the EFF calling it “a win for the open Internet.”

Public Knowledge echoed that language, adding, “By rejecting the ITC’s attempt to expand its jurisdiction, the Federal Circuit helps to ensure that Internet users have unfettered access to the free flow of information that has proved so useful for innovation and free expression.”

The legal fight may not yet be over, however. The MPAA added in their statement that they will “continue to support the ITC in its efforts” as further proceedings in the case arise.

[via TorrentFreak]

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