Patents

ClearCorrect v. ITC: Why a Data Stream Is Not an 'Article'

The Federal Circuit held that the ITC cannot bar infringing digital data transmitted electronically across the border, because Section 337 reaches only material things.

June 9, 2025
A stream of digital data flowing across a network connection
ClearCorrect generated digital aligner models abroad and transmitted them to Texas over the internet, never shipping a physical thing. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

ClearCorrect Operating, LLC v. International Trade Commission, No. 2014-1527 (Fed. Cir. Nov. 10, 2015), drew a hard outer boundary around the U.S. International Trade Commission’s power. The question was elemental: when a foreign actor transmits infringing digital data — not a disk, not a drive, but a stream of bits over the internet — into the United States, can the Commission bar it under Section 337 of the Tariff Act of 1930? Writing for the panel, Chief Judge Prost held that it cannot. Section 337 reaches “articles,” and “articles,” the court concluded, means “material things.” Electronic transmissions of data are not material things, so they fall outside the Commission’s jurisdiction altogether. The decision reversed a Commission determination in Investigation No. 337-TA-833 and remains the leading statement on whether the ITC can police the digital border.

At a glance

  • Case: ClearCorrect Operating, LLC v. International Trade Commission, No. 2014-1527 (Fed. Cir. Nov. 10, 2015)
  • Panel: Prost, C.J. (author); O’Malley, J. (concurring); Newman, J. (dissenting)
  • Tribunal below: U.S. International Trade Commission, Inv. No. 337-TA-833
  • Parties: Complainant Align Technology, Inc. (maker of Invisalign clear aligners); respondents ClearCorrect Operating, LLC (U.S.) and ClearCorrect Pakistan
  • Statute: Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337
  • Holding: “Articles” in Section 337 means “material things”; the Commission lacks jurisdiction over electronically transmitted digital data, even where that data, when used, infringes a U.S. patent
  • Subsequent history: The Federal Circuit denied rehearing en banc on March 31, 2016, over a dissent by Judge Newman

The facts: an offshore workflow built on bits

The dispute grew out of an effort to design around a physical-importation problem. Align Technology holds patents covering methods for incrementally repositioning teeth using a series of clear aligners. ClearCorrect’s process split the work across borders. In the United States, ClearCorrect scanned a patient’s teeth to create an initial digital model. That model was sent to ClearCorrect Pakistan, which manipulated the data to produce a series of intermediate digital tooth-position models — the digital representations of each step in the treatment plan. Those final digital data sets were then transmitted back to ClearCorrect in Texas over the internet, where they were used to 3D-print the physical aligners.

Crucially, nothing tangible crossed the border. The only thing imported was the digital data — the sequence of intermediate tooth models — arriving as an electronic transmission. The Commission, finding that the data sets satisfied the asserted method claims, determined that these transmissions were “importations” of “articles that infringe” and issued cease-and-desist orders. ClearCorrect appealed, putting squarely at issue whether intangible data can be an “article” at all.

The majority: dictionaries, structure, and a statute about material things

The panel majority resolved the case as a matter of statutory meaning, and it started with the word itself. Consulting dictionaries contemporaneous with the 1922 and 1930 enactments of the statute’s predecessors, the court found that “articles” was consistently understood to mean material things — items of trade and commerce having physical substance. The court reinforced that reading with the structure of Section 337, which speaks throughout in terms that presuppose tangibility. The statute authorizes the Commission to order articles “excluded from entry,” directs that they be dealt with by U.S. Customs, and contemplates remedies — seizure, forfeiture, exclusion at the ports — that simply cannot operate on a stream of bits. You cannot stop an electronic transmission at a port of entry the way a customs officer stops a container. The remedial architecture, the majority reasoned, confirms that Congress was legislating about physical goods.

The Commission had urged a more capacious, purpose-driven reading: because Section 337 targets unfair acts in importation, and because infringing data does the same competitive harm as an infringing widget, “articles” should be read to keep pace with a digital economy. The majority refused. Where the statutory term has a settled meaning and the surrounding provisions assume materiality, the court held, it is for Congress — not the Commission, and not the court — to extend the statute to intangibles. Judge O’Malley concurred, emphasizing that the agency cannot bootstrap jurisdiction over a category of subject matter that Congress did not commit to it.

The dissent: a statute meant to adapt

Judge Newman dissented, warning that the majority had frozen a remedial trade statute in the technological world of the 1920s. In her view, “articles” is not so rigidly tied to physicality, and the overriding congressional purpose — to provide a remedy against unfair competition in importation that injures a domestic industry — applies with full force to infringing digital imports. To read the statute as the majority did, she argued, was to hand foreign infringers a roadmap: convert the infringing thing into data, transmit it across the border, and reconstitute it domestically, all beyond the Commission’s reach. The disagreement thus crystallized the central tension of statutory interpretation in fast-moving fields: fidelity to enacted text versus fidelity to legislative purpose.

Open questions

ClearCorrect leaves the digital border substantially unguarded at the ITC, and several uncertainties follow. The opinion does not address hybrid scenarios cleanly — for example, where data is imported on a physical medium (a drive or disk), which is plainly an “article,” versus the same data sent as a pure transmission, which is not; form, not substance, controls the outcome. Nor does it resolve how the holding interacts with later-installed software or firmware, a recurring feature of modern devices that are physically imported. Most importantly, the decision is an open invitation to Congress: whether to amend Section 337 to reach electronic transmissions remains a policy choice that, more than a decade on, Congress has not made. Until it does, complainants whose infringement can be reduced to a data transfer must look to the district courts rather than the Commission.

Implications

  • The ITC cannot stop infringing data at the border. Pure electronic transmissions of digital files fall outside Section 337, regardless of whether the data, when used, practices a patented method.
  • Form of importation is dispositive. The same infringing content may be reachable if imported on a physical medium and unreachable if sent as a transmission — a distinction of medium, not merit.
  • District courts remain the forum for digital infringement. Patentees facing offshore-data workflows should plan around the ITC’s limits and assess infringement and remedies in Article III courts.
  • The remedy drives the jurisdiction. Because exclusion, seizure, and forfeiture presuppose tangible goods, the Commission’s toolkit itself confines its reach to material things.
  • The ball is in Congress’s court. Extending Section 337 to electronic transmissions is a legislative task; absent amendment, the holding governs the growing share of commerce conducted as data.

Frequently asked questions

What exactly was “imported” in this case? Only digital data. ClearCorrect Pakistan created intermediate digital tooth-position models and transmitted those data sets over the internet to Texas, where physical aligners were 3D-printed. No tangible object crossed the border, which is why the meaning of “articles” was decisive.

Would the result change if the data had been shipped on a USB drive? Likely yes as to jurisdiction. A physical medium carrying the data is a material thing — an “article” the Commission can exclude and Customs can stop. The majority’s holding turns on the intangibility of a pure electronic transmission, so the medium of importation can change the answer.

Has Congress fixed this? Not as of this writing. ClearCorrect explicitly framed any expansion of Section 337 to electronic transmissions as a matter for Congress. The Federal Circuit denied rehearing en banc in March 2016, and the holding has stood since, leaving the digital-import gap for the legislature to close if it chooses.

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