The words you’re reading right now don’t actually exist.
Or do they? They’re just a cluster of ones and zeroes stored on a digital repository and reproduced on your screen.
They’re so small that they wouldn’t even equal a single drop of water in an empty quart vessel.
Yet they are undoubtedly the product of human labor.
The same can be said about music, movies, digital design, spreadsheets, CAD files, and software. They’re all the result of the hard work of people, yet there is nothing tangible to prove that the work was done.
Digital media is intangible.
This intangible reality has created a sticky issue around intellectual property: When data is transmitted from country to country, who gets to police the instances of intellectual property theft?
Think of it this way: When bootlegged DVDs are trafficked into the United States from China or India, it’s a matter handled by the International Trade Commission. Yet when digital bootlegs are trafficked across international data lines, the ITC is not involved.
The United States Appellate Court is going to hear a case about this issue in just under one week. This case could have a resounding effect on the protection of digital intellectual property, and it’s coming from a very unlikely place: orthodontics.
The Case
You’ve probably heard of Invisalign braces. It’s arguably the biggest brand name in all of orthodontics.
In 2011, the company responsible for Invisalign, Align Technology Inc. (NASDAQ: ALGN), filed a patent infringement lawsuit against a Texas-based company called ClearCorrect for its dental alignment products.
Most of Align’s claims were dismissed in the case, but the ITC found ClearCorrect did engage in 18 counts of infringement regarding digital data the company received from ClearCorrect Pakistan.
The ITC issued an order for ClearCorrect to stop “importing” these digital files.
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Historically, the ITC only intervenes in the illegal trade of actual physical goods. Since this order focused on the digital design files, this case actually has to reevaluate the term “Importation of Articles” to figure out whether digital files are actually imported.
To get a bit more specific, the digital files were representations of where the dental patients’ teeth are located before, during, and after treatment. ClearCorrect’s legal team argued that these representations are not “articles” at all, nor are they imported when they’re sent to the company’s Texas-based servers.
The ITC, meanwhile, decided that the phrase “Importation of Articles” should include digital data.
This is a big deal for digital media groups because it would mean the ITC could serve as an alternative to intellectual property litigation in the federal court system. Companies could defend their intellectual property by filing ITC complaints instead.
One year ago, I said technology’s two invisible currencies were computer code and intellectual property. I also said the intellectual property business is far from perfect. Involving the ITC could actually improve matters in the coming years.
Good Investing,
Tim Conneally
For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.
