Patent Enforcement in Cyberterritories

3D printing technology has exposed a gap in patent protection. Thanks to 3D printers, physical products can be created and sold digitally in the form of CAD files, and consumers printing the products are effectively manufacturers. But current law would treat a product patent as being directly infringed only when the physical product is made, used, offered for sale, or sold, making it difficult to target the digital source of the infringement. While past scholarship has fashioned new legal constructs to close this gap (e.g., expanding patent eligibility or extending infringement case law) this Article considers whether a proper, analogous framework already exists—the law of extraterritorial patent enforcement.

National borders have long been thinning as a result of globalization, with manufacturing, sales, and operations increasingly being conducted, at least in part, abroad. When certain entities operated beyond the border to avoid infringement liability, Congress and the courts have occasionally responded to expand the reach of U.S. law to deem such conduct infringing, provided that there was a sufficient nexus to the United States and harm to the patent owner.

Now 3D printing has thinned the border between the digital and the physical such that the difference can be little more than the click of a button. As with national borders, businesses now have more choices as to which side of the digital-physical border to conduct their business activities. Just as the law bridged certain gaps in the national borders context, a similar reach into digital spaces may be appropriate.

Beyond this analogy are similar analytical challenges. Both situations require some balancing of recognized jurisdiction with the reality that conduct outside the border often has substantial effects on the interests of U.S. patent owners. And in both situations, imposing liability for some conduct can over-protect patent owners’ legitimate interests. There is even a statutory textual link, in that infringement is defined as certain acts “within the United States,” although that geographic scope has not yet been interpreted to encompass three-dimensional spaces that exist only as non-physical, conceptual constructs within digital storage devices.

Applying patent extraterritoriality principles to such digital spaces, or cyberterritories, as if they were in fact outside “the United States,” closes the gap in patent protection in certain desirable respects but leaves the gap open in other desirable respects. Further, although cyberterritories are not sovereign, and thus no traditional conflict-of-law analysis can be done, future evidence of norms concerning the development and use of CAD files may suggest that the results of this analytical approach are consistent with comity-like considerations.

INTRODUCTION

Additive manufacturing, or 3D printing, is revolutionizing how products can be designed, made, sold, and distributed.1See, e.g., John Hornick, 3D Printing Will Rock the World (2015); Hod Lipson & Melba Kurman, Fabricated: The New World of 3D Printing (2013).. Products in many industries are now routinely designed digitally by computer-aided drafting (CAD) programs and, with little more than the click of a button, can be “printed” into physical, three-dimensional objects on demand.2Daniel Harris Brean, Asserting Patents to Combat Infringement via 3D Printing: It’s No “Use”, 23 Fordham Intell. Prop. Media & Ent. L.J. 771, 774 (2013) (“A 3D printer essentially takes a CAD file and turns it into a physical object—‘feed it a design for a wrench, and it produces a physical, working wrench.’ Rather than starting with a block of raw material and removing, for example, all that is not a wrench, 3D printers build objects by adding small amounts of liquid or powdered material such as plastic layer by layer, from the bottom up. During the layering process, heat, light, or chemicals are precisely applied to bond and strengthen the structure. This layering approach enables 3D printers to construct highly intricate forms that would not be possible by simply using cutting or shaping tools on solid blocks of material. Three-dimensional printers can even be used to make devices having internal moving parts, such as a functional clock or gun.”); Daniel Harris Brean, Patenting Physibles: A Fresh Perspective for Claiming 3D-Printable Products, 55 Santa Clara L. Rev. 837, 847 (2015) (describing how CAD files are “sliced” into layers before they are printed layer by layer). 3D printers can make objects in metals, ceramics, plastics—even living tissue.3See Brean, Asserting Patents, supra note 2, at 779; Arielle Duhaime-Ross, This 3D Bioprinter Can Make Human-Sized Ear, Muscle, and Bone Tissues, Verge (Feb. 15, 2016, 11:00 AM), https://‌www.theverge.com/‌2016/‌2/‌15/‌10995730/‌3d-print-human-tissue-ear-muscles-bone [https://‌perma.cc/‌K7EP-BGB6]. Industrial applications have enabled, for example, the creation of impressively light, strong, and durable airplane engine parts,4Tomas Kellner, An Epiphany of Disruption: GE Additive Chief Explains How 3D Printing Will Upend Manufacturing, GE Reports (Nov. 13, 2017), https://‌www.ge.com/‌reports/‌epiphany-disruption‌-ge‌-additive‌-chief‌-explains‌-3d‌-printing‌-will‌-upend‌-manufacturing [https://‌perma.cc/‌SWE7‌-DCKT] (explaining that GE took a 20-component fuel nozzle and re-engineered it to be 3D-printed, where the result was that “not only combined all 20 parts into a single unit, but it also weighed 25 percent less than an ordinary nozzle and was more than five times as durable.”). and consumer applications are already bringing much of the promise of science fiction “replicators” into our homes today.5See generally Star Trek: The Next Generation (Paramount Domestic Television, 1987–1994); see also Replicator (Star Trek), Wikipedia, https://‌en.wikipedia.org/‌wiki/‌Replicator_ (Star_Trek) [https://‌perma.cc/‌WZQ9-5ZHC] (last updated Mar. 28, 2019) (“In Star Trek a replicator is a machine capable of creating (and recycling) objects. Replicators were originally seen used to synthesize meals on demand, but in later series they took on many other uses.”).

3D printing technology also permits traditional supply and distribution channels to fundamentally shift such that the consumer becomes the manufacturer and the commercial “product” being sold is a mere digital file.6See generally Brean, Asserting Patents, supra note 2; Tabrez Y. Ebrahim, 3D Printing: Digital Infringement & Digital Regulation, 14 Nw. J. Tech. & Intell. Prop. 37, 39 (2016) (“[T]he consumer availability of 3D printing has enabled a DIY consumer to create a design in the form of a digital file that can be easily transmitted and made available to others. The digital file is called a Computer Aided Design (‘CAD’) file, which is a virtual blueprint model that is used to produce 3D printed objects. . . . [P]hysical products are already being designed, sold, and distributed on the computer and over the Internet, with end consumers only printing the physical manifestation of the product.”). As I have written elsewhere, this shift exposed a gap in patent protection where the making, use, sale, offer for sale, or importation of such files is not, under current law, an act of direct infringement—only those acts with respect to the physical objects would infringe.7Brean, Asserting Patents, supra note 2, at 804 (summarizing that the “state of the law leaves patentees virtually helpless to combat a large class of infringement of their product claims”); id. (observing that some potential liability for indirect infringement—namely, active inducement under § 271(b)—might exist, but that the burden of proof for such claims is quite high); see also Ebrahim, supra note 6, at 66 (“Patent law in its current form is geared towards physical objects and is not prepared for the shift being created by 3D printing. Since 3D printing involves creation of CAD files that can print the physical object in an instant press of a button, there are blurry lines as to whether the creation of a CAD file should be viewed as making the object itself. Since the line between the digital and physical world is being blurred by 3D printing on a mass scale, it makes sense to develop new regulations and reform existing ones.”).

To address this gap, some have suggested that the infringement law should be interpreted to cover such digital activities, at least where there is a clear appropriation of the economic value of the invention by a sale or offer to sell such files.8See generally Timothy R. Holbrook & Lucas S. Osborn, Digital Patent Infringement in an Era of 3D Printing, 48 U.C. Davis L. Rev. 1319, 1327–28 (2015) (suggesting that a “sale” of or “offer[] to sell” a CAD file should be actionable because, unlike a mere “use” or “making,” such acts appropriate the “economic value” of the patented invention). I have approached the issue from the patentability side and advocated that patents should be able to distinctly claim the digital representation of the physical invention, and thus patent the files per se (much like software has been patented on digital storage media in the form of Beauregard claims).9See Brean, Patenting Physibles, supra note 2, at 852–60 (demonstrating how a CAD file directed to a printable object could satisfy § 101 and the “printed matter” doctrine, while still avoiding the Alice “abstract idea” exception, because the file is a sufficiently specific and concrete form of data that is only readable by computers or 3D printers); id. at 843–46 (discussing the analogous history of Beauregard claims, which originated as a test case filed by IBM because software was distributed on disks but patented as method claims, causing a gap in enforceability such that those trading in disks were not direct infringers).

Both infringement-focused and patentability-focused approaches to closing the gap are supported in large part by favoring substance over form. These approaches recognize that the differences between the digital files and the physical objects has become less significant as 3D printing makes it fast and easy to both print a digital object and digitally scan a physical one.10See id. at 838 (“Today consumers, hobbyists, and technophiles can download a computer-aided design or CAD file (a digital representation of a physical product) and additively ‘print’ a three-dimensional product or component as simply as one can print words to a page.”); id. at 852 (“A CAD file is intended to be precise, detailed, and suitable for use in tooling and manufacturing—it is not an abstraction of an object but an accurate representation of it.”); Holbrook & Osborn, supra note 8, at 1362 (“CAD files are easily transferable and are one click away from producing a tangible object. A transfer of a CAD file is likely to take place immediately and makes future, tangible infringement all too easy.”); id. (“3D printing and other DMT are bridging the digital and physical worlds, rendering many of the distinctions between ‘tangible’ and ‘intangible’ anachronistic.”); Lucas S. Osborn, Regulating Three-Dimensional Printing: The Converging Worlds of Bits and Atoms, 51 San Diego L. Rev. 553, 620 (2014) (“3D printing causes the worlds of bits and atoms to overlap further. As the technology proliferates and improves, CAD files for many products will become equivalent to their physical counterparts. Regulating these files will be the chief challenge for the legal system as it seeks to adapt to a world with 3D printing.”); Brean, Asserting Patents, supra note 2, at 773 (“While designs can certainly be created and manipulated in CAD programs from scratch, 3D scanning technology can also be used to make a CAD file that digitally captures and represents an existing object.”). But both approaches also have purported to expand or extend the law in different ways to cover so-called “digital infringement.”11E.g., Brean, Patenting Physibles, supra note 2, at 863–64 (ultimately advocating for a “test case” to determine if new claiming strategies to encompass CAD files will succeed); Holbrook & Osborn, supra note 8, at 1360 (“We are not simply asking whether the law at present will allow such liability. We are asking whether the law should do so. Our contention is that it should, as a normative matter, regardless of whether current case law permits it.”); id. at 1362 (“Transocean of course does not definitively answer the question of CAD files because the court was not considering digital infringement.”); id. at 1384 (“Whether to extend patent law in the ways we have explored is clearly a complex question. Even though digital infringement, particularly direct infringement, is justifiable on technical terms, such an expansion may work considerable costs on other parties.”). Professors Holbrook and Osborn further contended that the law, as is, would extend to CAD file sales and offers for sale as actions of infringement despite involving intangible files, id. at 1359–63, though I have taken the contrary position based on a different reading of the case law. See Brean, Asserting Patents, supra note 2, at 790–93. A third, related approach is that taken by the International Trade Commission (ITC) in ClearCorrect Operating, LLC v. ITC, 810 F.3d 1283, 1287 (Fed. Cir. 2015), discussed infra Section I.B, where the ITC attempted to expand the scope of its unfair trade jurisdiction by blocking the importation of digital CAD files over the Internet via the ITC’s powers under 19 U.S.C. § 1337. The Federal Circuit rejected the ITC’s effort to so expand the meaning of infringing “articles” that may be blocked from importation under § 337. Id. Although related to the issues of infringement under 35 U.S.C. § 271, which are the focus of this Article, ClearCorrect represents the first major attempt for U.S. patent protection to extend to such digital activities, as discussed infra Section I.B.

This Article considers whether an appropriate framework already exists in the extraterritorial application of patent law. I examine whether infringement liability would attach if the accused actions occurred in digital spaces (i.e., non-physical, conceptual spaces on computers) that, though arguably within the United States, are treated as extraterritorial.12For an excellent discussion of how digital infringement activities should be addressed when those activities are actually outside the United States, see Timothy R. Holbrook, Extraterritoriality and Digital Patent Infringement, in Research Handbook on Intellectual Property and Digital Technologies (forthcoming), https://‌ssrn.com/‌abstract=‌3088027 [https://‌perma.cc/‌4F9W-CKD3]. I call such digital spaces “cyberterritories.”

For example, creating a CAD file makes a digital representation of a product in a cyberterritory. If that file is printed on a 3D printer in the United States, it crosses the digital-physical boundary and becomes a physical object that is clearly within the reach of U.S. patent law. But many actions involving CAD files in cyberterritories will stop short of that ultimate step of making a physical object and occur partly, if not entirely, on the digital side of the border—e.g., copying the digital file, electronically transmitting the digital file, modifying the digital file, and offering to sell or selling a copy of the digital file. In those instances, the reach of U.S. patent law into the digital-only conduct is less clear—are those actions “mak[ing],” “us[ing],” or “sell[ing]” the “invention[] within the United States,” as the infringement statute requires?1335 U.S.C. § 271(a) (2018). The statute and common law surrounding it was mostly developed long before the internet, let alone 3D printing, existed. Thus, answering that question implicates other questions similar to those that arise when the accused infringement occurs at least partially in other countries where U.S. courts’ right to exercise jurisdiction is not a given. For example: (1) did Congress expressly give the courts jurisdiction over such conduct?; (2) is there a legitimate harm to the patent owner that will go unremedied if the conduct is not actionable?; and (3) would applying the law to reach this conduct be considered offensive or overreaching to other stakeholders? This Article will demonstrate how those questions are similarly implicated (and answered) when some or all of the accused conduct occurs within a digital cyberterritory.

Importantly, when discussing cyberterritories I am not referring per se to the internet and similar networks that are more commonly called “cyberspace.” Cyberterritories are the constructs of three-dimensional objects that are represented by digital data, where that digital data will often be stored on devices entirely within one country’s national borders. Put another way, the cyberterritory is the conceptual three-dimensional space occupied by the digital object and associated with the digital storage device on which the data representing the object is stored. Though such data may be transferred over networks across national borders, in which case the digital object might ultimately occupy multiple cyberterritories, as a first analytical step this Article assumes that the digital object and any networked computers involved are entirely within U.S. national borders.14Similar location-based analytical challenges have arisen in the context of using trademarks in virtual spaces, such as online interactive games, even if all the relevant users and computers are assumed to be in the United States. See, e.g., Candidus Dougherty & Greg Lastowka, Virtual Trademarks, 24 Santa Clara Computer & High Tech. L.J. 749, 782–83 (2008) (“Since Second Life is a software platform that resides on 2,000 servers located in San Francisco and Dallas, it probably would not be found to exist outside of the jurisdiction of the United States.”); id. at 783 (“Since Second Life is Internet-based, it would seem that [a virtual trademark user’s] . . . rights would also extend nationally across the Web. Maybe limiting the protection of a virtual trademark to its virtual ‘territory’—Second Life—would chart a better policy course, but trademark law does not seem to recognize ‘virtual’ geographic limitations. So to the extent such a notion would be accepted as a limitation on virtual trademark rights, it would probably have to be under the rubric that Second Life constitutes a separate market, not a separate place.”). With federal trademark law stemming from the commerce clause of the Constitution, rather than the intellectual property clause, authors like Daugherty and Lastowka may well be justified in their more expansive assumptions about the reach of virtual trademark rights. See, e.g., Sapna Kumar, Patent Damages Without Borders, 25 Tex. Intell. Prop. L.J. 73, 96–97 (2017) (discussing Steele v. Bulova Watch Co., 344 U.S. 280 (1952), where the Supreme Court “carved out a notable exception to the presumption [against extraterritoriality] in trademark law” to extend to conduct occurring entirely in Mexico, and explaining that the decision was rooted in the broad power to regulate commerce that stems from the commerce clause and flows through the Lanham Act); Timothy R. Holbrook, Extraterritoriality in U.S. Patent Law, 49 Wm. & Mary L. Rev. 2119, 2124 (2008) (“In contrast to copyright and trademark law, many commentators viewed patent law as the most territorially based form of intellectual property because most inventions were tangible in nature and because patents are subject to extensive review by a national government prior to the patent rights being granted.”). As many others have written at length, cyberspace holistically defies (and arguably should defy) efforts to be located within any one country or controlled by any one set of laws.15See, e.g., David R. Johnson & David G. Post, Law and Borders: The Rise of Law in Cyberspace, 48 Stan. L. Rev. 1367, 1371–72 (1996) (“The power to control activity in Cyberspace has only the most tenuous connections to physical location. Nonetheless, many governments’ first response to electronic communications crossing their territorial borders is to try to stop or regulate that flow of information. . . . But efforts to control the flow of electronic information across physical borders—to map local regulation and physical boundaries onto Cyberspace—are likely to prove futile, at least in countries that hope to participate in global commerce.”); see also Timothy S. Wu, Cyberspace Sovereignty? The Internet and the International System, 10 Harv. J.L. & Tech. 647 (1997); I. Trotter Hardy, The Proper Legal Regime for “Cyberspace”, 55 U. Pitt. L. Rev. 993 (1994). Future work will address the complication of multinational and transnational cyberterritories throughout cyberspace.

With those caveats, the following discussion shows that many of the legal expectations and policy goals of the United States patent system would be well served by treating cyberterritories as being outside the United States for purposes of infringement. This framework also goes a long way to closing to above-mentioned gap in patent protection to advance patent policy goals, while stopping short of some potential undesirable consequences.

Part I juxtaposes the challenges and analytical frameworks surrounding extraterritoriality and digital patent infringement. Part II examines, through a trans-national or multi-national lens, how and when conduct within cyberterritories should infringe U.S. patent rights. Part III considers what role normative evidence may play in this debate. A brief conclusion follows.

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