While the opportunity for US-based copyright holders to easily block foreign 'pirate' sites was temporarily thwarted with the death of SOPA, the MPAA has been busy making other plans to achieve the same goals. However, following a Court of Appeals ruling handed down yesterday, one of those options now appears to be off the table.

It’s 2012 and you’re the organization representing the world’s largest movie studios. You’ve just received a bloody nose while failing to get the extremely unpopular SOPA legislation passed. All that SOPA entailed, site blocking included, is now off the table. What do you do, give up? Not a chance.

Help us block, ITC

As revealed last year, the MPAA continued to explore other options to have unauthorized sites and content blocked in the United States, one of which involved leveraging the powers of the International Trade Commission (ITC).

The ITC determines the impact of imports on industry in the U.S. and can tackle unfair trade practices including those involving patents, trademarks and copyright infringement.

The MPAA quietly hoped that it could encourage the ITC to order blocks against ISPs carrying infringing content across U.S. borders. It also hoped it could obtain injunctions against regular ISPs to stop them providing access to overseas “rogue” sites. At the time the MPAA’s lawfirm highlighted several problems, not least that no actual goods are sent across U.S. borders by ‘rogue’ sites.

This is important. The definition of “articles” under Section 337 of the Tariff Act of 1930 is what allows the ITC to take action in such cases. The big question is whether an “article” must be a physical item or whether it can relate to content in the digital realm. The answer lies in a case about crooked teeth.

At first view ClearCorrect v. ITC looks like just another boring patent case but it has been closely monitored by the MPAA.

ClearCorrect, a competitor of invisible brace manufacturer Invisalign, had one of its subsidiaries in Pakistan create 3D models of braces. These were sent over the Internet and 3D-printed in its office in Texas, potentially infringing Invisalign’s patents.

Invisalign parent company Align Technologies complained to the International Trade Commission in the hope of getting something done about the alleged cross-border infringement. In the short term it paid off, with the ITC ruling against ClearCorrect while noting that the Tariff Act of 1930 does allow it take action against the transmission of digital files.

ClearCorrect objected against the decision and the case was heard by the Federal Circuit Court of Appeals. Yesterday the Court handed down its decision, overturning the ITC’s initial 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’,” Judge Sharon Prost wrote.

“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’.”

The Court’s majority 2-1 ruling (Judge Newman dissenting) that the ITC has no jurisdiction in this case and possesses no expertise when it comes to ensuring that the “Internet remains an open platform for all” has upset the MPAA.

“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 Hollywood group said.

After filing a brief in the case, interests group Public Knowledge described the ruling as 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,” said Charles Duan, Director of Public Knowledge’s Patent Reform Project.

“In particular, Judge O’Malley’s concurrence strongly recognized the importance of ensuring that ‘the Internet remains an open platform for all.’ This recognition of the central role that open information flow has played in the digital age is heartwarming to advocates like us who have tirelessly worked to protect that Internet openness.”

Countering, the MPAA chose to cite the opinions of the one dissenting judge.

“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.’ 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.”

In other words, the MPAA won’t be giving up on its site-blocking ambitions just yet.