The IC Problem

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Essentially, when one pin (control) is taken high, two other pins are connected. The bilateral bit means that unlike a diode, electrons can flow in either direction.
Google datasheets for CD4016 and CD4066 for more details.
 
It's referring to a CMOS switch. The call it bilateral to emphasize that the switch conducts equally well for either direction of current flow through it.
 
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