for decades before the terror a fact that we're talking about today was enacted the us supreme court in western union versus pendleton was deciding cases about the transmission of electronic information into the say in tangible goods now the parties and their brief to putting some adjective before every term is it your view that good is broad enough to cover tangible and intangible goods no your honor if i did i misspoke my my point was that when the court was talking about two sets of regulations one was for the trade in goods including commodities and the other was for this electronic transmission of information well why isn't the electronic data here simply type of product and if so why not the commission have the authority to decide that that too should be covered under strict sticks good question your honor several reasons first the product of the transmission of information is not a product and the authority over the transmission of electronic data was never authority granted to the tariff commission where the i t c by congress  the after the supreme court decided to do two or two different forms of commerce with that backdrop congress passed the tariff act but when it did so it did not give authority over electronic transmission of signals now television signals and satellite broadcasts those would be the transmissions of electronic information that the commission and the congress gave to the f c c instead of  arguing here and i understand that that that you're viewing this too broadly that in this particular case what they said in this particular type of data transmission that that issue not the same mission and that here you have a data transmission that is capable of being immediately downloaded into something that becomes physical well your honor that that a true but the distinction is still there this is the transmission of electronic data and well i think this can be crystallized into a product in short order you know now so in many things you know this transmission of information is no different than a telephone call television signal radio wave morse code is the same thing it is an electronic service across a wire that's all it is the character of the transmissions have not changed since the mid eighteenth hundreds maybe the quantity of data has but the character of these transmissions is no different and congress never gave the tariff commission or the i do you see authority to regulate them and in the eight and a half plus decades since the time this tariff act was passed no court has held no agency is held and no one has ever even really argued until just now in this case that the transmission of an electronic signal streaming information would qualify as an imported article under to the definition of article because the difference would only come into play if the commission had been granted because we wrestle not of authority over the subject matter once congress hands over the authority then we would let the commission regulated but that never happened here the i do you see in the old terra one hundred compared to say two term give them the authority would have had to say and the i c c have the authority to regulate electronic commissions what would the court with that opinion it would have said commerce both for electronic data transmissions or intangible signals or waves or wire transmissions whatever the court was talking about in the pendleton case would be the same there but congress didn't do that so just you and i having this conversation i would say if they wanted to make that clear they would just use commerce instead of article something that the notes tangibility even you know the the commission is going to stand up there in the mid and say if we look  contemporaneous dictionary definition from the early twentieth century we can look at the word article and we can take these transmissions streaming francis of of information and we can stuff it into what i think they call the outer of data over wired exactly like the morse code in the telegraph machines again the quantity of data may change but the character of the transmission has not even beyond that by the time this tariff act was passed and certainly by the time the f c c or the communications act was passed we not only have the required transmission but radio and telephone with television soon to follow now on top of all this your hon we know that what the commission is trying to do here taking in an ancient dictionary and trying to stuff the definition in the articles that are important is not the proper way to approach this stack for interpretation what we know from gates versus us is that we have to look at it we have to look at a reasonable definition of the term in the context of the statu so to agree with you we would have to agree that subject matter that is subject to patenting the right nonetheless is excluded from the general our condition of authority to the commission with respect to patents or copyright satirized yes or honor if there is no importation of an article that is for correct your honor in this case is a perfect example of that aligns going to get its day in court it's going to get to it soon clear correct in a texas u s district court alleging is four hundred plus infringements an article before they should be able to hear your case and here there was once there was a stream of data from a domestic server side of or the server to a domestic well well let let's say that we view data as an article of ambiguous they're not arguing it's ambiguous articles in the context of the statute means something that can be intercepted at the customs house stamped with the trademark broken in transit put on a rail car that's a lot of legislative history that this court reviewed in very few verses housing and while we disagree on the holding of that case what's indisputable is that this court held that article can into seventy one of the same articles and thirteen thirty seven and they were never intended to reach information have we have three based on the time commitment here or the time allocation we've got the the commission erred on the contributory infringement finding that the patent claims are invalid and that there was a two thousand and eleven covenant not to sue that has the same specification in disclosure as one of their certain patent sort of patents and because the claims here are so mind numbingly similar it should expand that  intent to cause a direct infringement that can't co exist with contributory infringement findings they rely on a presumption the evidence the l g found should have notified the presumptions if we call the commission knows well in size letters that these are just instructions on how to make a physical model that then makes the alignment and they have no separate commercial value instructions typically or induced infringement under a two seventy one being if we say they're now a contributory under to seventy one c then to seventy one b becomes surplus and that violates can construction the substantial non infringing uses here there were several identified in the brief and and then you come up with the straight teeth and the doctors have to approve that prescription and that's what they were doing with this as well as the other uses of just these models they weren't hypothetical there they were the same models that align was found  french on one post patents if you're taking digital models of people's teeth and use them to make a liners very simple process and then finally we know that up to seventy one so you have to have a material and we know from this court's  summary of argument which is only a page or a little more than a page to make the very salutary statement that we shouldn't lose sight of the fact that this is a case about teeth well markman was a case about dry cleaning but nobody thinks of markman a standing for anything about dry cleaning it stands for an important legal principle and in my view so it is what the commission has done here so i don't quite understand how you're trying to cap and what's going on here and just to supplement that you go on to sort of say if i'm understanding correctly that you know the internet service providers are our worry but this isn't that type of case and kind of don't worry we'll get that case and we'll decide it on the facts in the record before us it does seem to need that if we were to affirm the commission here we would be saying that the itu has jurisdiction over electronic commish transmission i don't see very many that line how do we know that electronic transmission represents digital goods well the commission here found that these are items that were bought and sold in commerce exactly the same way that their physical counterparts work indeed exactly the same way that exact relying on the cloud storage for people to hold my files for me and then i retrieve those same files later on when i was an awful lot like the like the services that were discussed by the supreme court in europe do you know besides the fact that we that describes something that is traded in commerce and quote but the dictionaries the multiple dictionaries that are cited in the footnote and otherwise seem largely to define articles as material things so to me when i'm definition in black's law dictionary for purposes of this case i don't think that's the right timeframe but even if we assume that there are different dictionary definitions that's just a question of shop front this is the commission inter bank it's organic statute through the process of complaint if it discovers that the that the respondent the educated infringer is violating the cease and desist order is instituted enforcement proceeding in the commission and the result of that is that the commission itself or through efforts agree which is they're not supposed to be a filler because exclusion orders would possibly work or be able to be accepted they were supposed to be a supplement i think the record looking at the legislative history they thought exclusion orders were just exclusion orders would otherwise be applicable it's just we don't think they should be introduced here not if you say that when exclusion orders can't possibly actually did that's when we go to cease and desist i have two responses to that first of all is for i know this because it was highlighted at least in recent mar review article which may or may not be familiar with but the point i'm making is if you go back to the commission cited approved as a provision of the legislative history found in a senate report and you senate report that was in our library and the quote that the commission used to lead the word importation of goods from the quote without and leslie i apologize for that  are accountable for what the priest says i was afraid of the commission i mean the commission opinion in this case relied on that quote without the terms with the term good extracted without articles repeatedly and that's consistent with our position here as discussed at pages a one ninety nine point four four where the commission explains that its definition is such items a authority electronically deliver goods this isn't how does that sit with your opponents coming to when you start to talk about the kind of information or technology disappearing courted there is another records like to dress first the contention that is a categorical exclusion of information products in the term of articles the supreme court has held that articles of trade are not limited to physical articles and governing since trading and information on the internet and especially as it relates to happen right material and has yet been able to really come up with the proper solution because there are so many issues to balance doesn't that tell you that congress not leave them it important to know that i s p p's like telegraph companies are carriers they're not importers they're not subject to the jurisdiction of the act they don't trade digital articles so this is there is a very i think distinctive test that can be applied here you must have a discrete item of trade there must be importation and there must be importation by the donor concent he or importer and that's going to exclude carriers that's why shipping companies railroad companies trucking companies are not subject to the i p c jurisdiction in their role as carriers so that's very important to maintain and you ask about forums like streaming streaming may or may not depends what it is for example in copyright transactions applying that straightforward three part test i think that one can decide whether or not they're within the purview of the commission's jurisdiction but here where you have digital articles that are traded in that are in fact representation of a physical article that it would be a subjective trade i think it's quite clear case for the exercise of the commission's jurisdiction and since the term of articles is capacious it just makes no sense to restrict the statute to deny domestic industries the protections against unfair trade practices and against invasions of intellectual property and the completely irrelevant factor of imported opposed to unit pricing but it's still that what they did was they provided an article and they were compensated for it and they made profit on it and so even though it's in that ciliated trade is still trades i think that would be fairly within their purview even if they had first of all by i was addressing what was started in the proposition agreed to by the parties in that case that is the term products made into seventy when she met products manufactured in the articles necessarily had to be physical and the court reserved the question about what the meaning of fifty seven was because the terms there are much broader it's made produced processed for high second of all buyer did not attempt to plenary construction of three seven did not take into account for example the copyright to section and by nine hundred eighty eight is clear the copyright applied to electronic works there or even draw the distinction even under two seventy one g that if a product is created by a process as opposed to just merely discovering information or transmitting information it's within the purview to seventy one g b so i think the the commission deserves deference and what the commission probably did is reject an interpretation that would create a gaping loopholes in the statute and invited a few evasions through widespread electronic piracy copyrighted works and to a kind of sham arrangement that the l j found was devised here to to avoid liability because what they're connected now to having been subject to a expand the remedies to visually vindicate that prohibition in the rights and duties and it really makes no sense to suggest that the substantive prohibition is somehow restricted by the original read a remedies even to first off i think the commission may have some confusion about what is actually transmitted from server to server they were talking about a digital replication of the item that is sold in commerce but that's not this case though the way this process works and their claims are written is you have a digital model of someone's teeth in cricket position and then in the straight position you have another model and then you come in and you gap fill the intermediate positions to move from position a cricket t to positions the straight tees what you do with the physical with the digital models you send them to a machine and that makes a physical in it's very simply a matter of thermal forming a plastic material on the top so the information that is sent from the pakistani server to the server in the united states is not what is ultimately sold to the doctor or the patient it is a way it is bits of and bytes of data that a machine uses to make a mold and then the plastic is thermoformed on top of the mold and then that plastic is the item that actually goes to the patient and is put in their mouth so when the commission found again in bold in the towels that these were merely instructions that had no separate commercial value and is a very far cry from being the physical product that people buy to wear in their mouth to straighten their teeth so i think there was some confusion on behalf of the commission on how far we are weird the data coming in is two or even three steps removed because the data has to get treated once it arrives in the u s before it even go to the machine to make physical models that are then used to make the airliners and then there was a lot of discussion about where lines need to be drawn what type of streaming information would go to the commission what type of streaming information might not be within the commission be left to congress thank you very well unfortunately both well reasoned nonetheless and here the what the commission has done expanding the scope of its own power mid many times the problem that occurs with a judicial opinion just as affirmed is that there are a lot of issues here that are very difficult i mean there's  a block full of those all those i'm a guy who have their competing interests but more let's look at the petri dish we have just of this case we've got the violation premised on some people in pakistan who were writing some bits and bytes of data and sending it from a server there to a server in texas and that's a violation but those pakistani technicians could just walk straight on to the server in texas and then we would not have any argument of the importation of digital data sets and they would be hard pressed to even find the importation of an individual keystroke so the points made in bayer in a t n t versus microsoft in the one yesterday is well taken and you brought it up in your discussion previously is congress has a lot of balls in the air about what we're going to do with this streaming information and when it decides these issues like will could the pakistani just log onto in us server they're going to have their hearings and their evidence and their lobbyist then bill to drop those amendments all that good stuff to come up with a rule that we can work with and all live by hopefully and so the point is well taken that instead of the r t c just unilaterally expanding its own power to try and cope with this brave new world which i suggest is really no different from the old world this is a matter that should be left to congress and all the judicial opinions to that point were very astute so we thank you before we close the case off of the panel would like to request that within ten working