MPAA Warns Appellate Ruling Could Limit Ability to Fight Digital Piracy

An appellate ruling over the importation of digital goods could limit the ability of a federal agency to fight online piracy, the MPAA said on Tuesday.

The Federal Circuit Court of Appeals ruled that the International Trade Commission does not have the authority to block the importation of digital files, concluding that it runs counter to the intent of Congress. If it stands, the ruling has significant ramifications for the entertainment industry.

The case involved the ITC’s effort to prevent patent-infringing 3D digital files from crossing borders, just as it would halt counterfeit physical goods. The case pitted the MPAA and other copyright industries against the tech sector, which argued that the ITC was gaining potentially broad government oversight over Internet transmissions.

The appellate court ruled 2-1 in the case, with Judge Pauline Newman dissenting.

“We are disappointed at the Federal Circuit panel’s 2-1 ruling that the International Trade Commission does not have the authority to block the importation of ‘articles’ that consist of infringing digital transmissions,” the MPAA said in a statement. “This ruling, if it stands, would appear to reduce the authority of the ITC to address the scourge of overseas web sites that engage in blatant piracy of movies, television programs, music, books, and other copyrighted works.”

The majority of the court, in an opinion written by Chief Judge Sharon Prost, said that the ITC’s authority over importation of “articles” was limited to material things. She cited the Tariff Act of 1930.

“We recognize, of course, that electronic transmissions have some physical properties — for example an electron’s invariant mass is a known quantity — but common sense dictates that there is a fundamental difference between electronic transmissions and ‘material things,'” Prost wrote in the majority opinion.

The MPAA argued in an amicus brief that the intent of Congress was for trade law to protect U.S. industries “from all manner of unfair acts.”

“As Judge Newman’s dissent trenchantly argues, the majority ignores precedent and logic, and removes a vast body of technology from the protection of a statute designed for its protection,” the MPAA said. “We will be watching closely for further proceedings in this case, including potential en banc review, and continue to support the ITC in its efforts to address 21st Century challenges.”

Some public interest groups saw the ruling as a significant victory.

Charles Duan, director of the patent reform project at Public Knowledge, said, “This decision is a big win for the open Internet. 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.”

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