The US ITC ruled in the so-called Align case that data files for 3D printers have property rights, but enforcing them will mainly fall to the files' owners.
Data files for 3D printers have property rights similar to those of movies, music, and games, according to an April decision by the International Trade Commission (ITC). But enforcing those rights will mainly fall to the vigilance of the files' owners.
The so-called "Align" case gets its name from the imported articles at issue -- digital data files for modeling dental aligners. The accused infringers were found to have created the files in Pakistan and to have electronically transmitted them to a server in Texas where the files were uploaded to fabricate dental aligners.
The accused infringer argued that the ITC only has authority to exclude tangible goods, not electronic transmissions. The patent owner argued that the ITC has the authority to exclude articles in any form. Interested third parties including Google and the Motion Picture Association of America also weighed in on whether an "article" should include a digital data file.
The ITC ultimately found that electronic transmissions are within its statutory authority. It ruled a transmitted digital data file used for 3D printing was a non-tangible imported good within the scope of articles protected by the Tariff statute. The Commission determined that an infringing imported article may be tangible or electronic.
The Align case also addressed whether the ITC has the power to stop the importation of digital data files. Generally, if the ITC determines that there is a violation of the statute, the remedy is an exclusion order prohibiting the importation of the infringing article. Customs and Border Patrol enforces the ITC's exclusion orders to stop the articles at the border. However, when digital files are imported via an electronic transmission, Customs is incapable of inspecting and stopping them.
The ITC has another remedy. It may issue a cease-and-desist order prohibiting the infringer from importing, distributing, selling, and marketing in the United States. In the Align case, the infringers were ordered to cease and desist from importing (through electronic transmission or otherwise) digital data files that infringe the claims of the patents. That order is currently stayed, pending an appeal.
If the patent owner believes that there is a violation of the cease-and-desist order, the ITC will enforce the order through an enforcement proceeding. Violators face civil penalties, which may be substantial.
By statute, the ITC may order a violator to pay up to $100,000 for each day an importation or sale occurs. For example, most recently, the ITC ordered DeLorme Inc., a Maine personal GPS company, to pay $6.2 million and MaxLite Inc., a New Jersey lighting company, to pay $10,000 per day in penalties.
Watchdog services are available to detect the transmission of pirated movies and music via the Internet. However, it is difficult to detect the electronic transmission of 3D print files to a server, because the transmission most often occurs over a secure private network.
A cease-and-desist order is only as effective as the watchful eye of the patent, trademark, or copyright holder. The owner must be diligent and immediately initiate an enforcement proceeding if it believes that the cease-and-desist order is being violated.
The good news is that the ITC has historically been an excellent forum for protecting intellectual property rights, and now digital data is clearly within its crosshairs.
— Kecia J. Reynolds is a partner in the Washington office of Goodwin Procter and a former Senior Investigative Attorney at the US International Trade Commission, Office of Unfair Import Investigations.