WASHINGTON—A federal appeals court appeared skeptical Tuesday of claims by a government trade panel that it can block Internet communications it finds infringe U.S. patents.

The U.S. International Trade Commission last year took the unprecedented step of ordering ClearCorrect LLC of Round Rock, Texas, to cease receiving digital models and data from Pakistan to manufacture dental aligners, plastic orthodontic devices used to straighten teeth.

The commission ruled the data to be the digital equivalent of the aligners themselves, which it found infringed patents held by Align Technology Inc., the San Jose, Calif., maker of competing Invisalign aligners. Since the commission can block the importation of infringing physical goods, it reasoned that it can likewise halt the transmission of data.

The case has drawn attention of industries far removed from orthodontics, because the commission also holds authority to enforce copyrights. The entertainment and publishing industries hope an ITC victory could open a new venue to fight digital piracy. Internet providers worry it could expand government control over the online world.

The commission faced a tough audience Tuesday at the U.S. Court of Appeals for the Federal Circuit, a specialized court in Washington that hears patent appeals.

"If we were to affirm the commission here, we would be saying that the ITC has jurisdiction over electronic transmission," said Chief Judge Sharon Prost. "I don't see very many limiting principles that might apply to future cases."

"I'm not here to tell you exactly where the line is," ITC attorney Sidney Rosenzweig. But he said that while the agency claims authority over "digital goods," it doesn't seek to oversee "digital services" or telephone calls. He added that Internet service providers have specific protection from liability under a separate federal law, the Digital Millennium Copyright Act.

The ITC, an independent agency comprised of six members appointed by the president for nine-year terms, traces its history to the 1916 Revenue Act, when it was established as the U.S. Tariff Commission.

Judge Pauline Newman suggested that by extending its power to digital transmissions, the commission was exceeding the authority Congress initially conceived for the panel 99 years ago.

Mr. Rosenzweig argued that it was reasonable for the commission, like the Federal Trade Commission and the Securities and Exchange Commission, to apply powers granted in earlier eras to modern conditions.

"We don't have people yelling and waving slips of paper to trade stocks anymore," but the SEC still regulates Wall Street under the Securities Exchange Act of 1934, he said. Likewise, laws covering the commission "are broad enough to encompass trade in its various forms."

Even if the court denies the commission power to block Internet communications, Align has other ways to fight ClearCorrect's alleged infringement. The two companies are battling in federal court and the U.S. Patent and Trademark Office over the validity or infringement of the aligner patents.

Write to Jess Bravin at jess.bravin@wsj.com

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