1. J.D. Candidate, 2008, Duke University School of Law; Ph.D. in Molecular Biology, Cornell University Weill Graduate School of Medical Sciences; B.Sc. in Biological Sciences with Honors in Molecular Genetics, University of Alberta. The author is extremely grateful to Professors Arti Rai and Jerome Reichman for informative discussions.
2. 35 U.S.C. § 271 (2000).
3. Id. §271(a), (f). Section 271(f) states:
(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.
(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.
Id. (emphasis added).
4. Alex Cartove, Activities that Occur Outside the U.S. May Result in Liability for Infringement of a U.S. Patent: AT&T Corp. v. Microsoft Corp, 414 F.3d 1366 (Fed. Cir. 2005), Morrison Foerster, Legal Updates & News, April 2006, http://www.mofo.com/news/updates/files/update02178.html.
5. Id.
6. AT&T Corp. v. Microsoft Corp., 414 F.3d 1366, 1371 (Fed. Cir. 2005), cert. granted, 127 S. Ct. 467 (U.S. Oct. 27, 2006).
7. Id. at 1369-70.
8. 35 U.S.C. § 271(f).
9. 406 U.S. 518 (1972).
10. AT&T v. Microsoft, 414 F.3d at 1371.
11. Deepsouth Packing, 406 U.S. at 523-24. Assembly of the machine’s components was very simple and the manufacturer referred to the components as the "machine" in its instructions and correspondence with customers.
12. Id. at 528-29.
13. Id. at 527 (discussing Dowagiac Mfg. Co. v. Minn. Moline Plow Co., 235 U.S. 641, 650 (1915), Brown v. Duchesne, 60 U.S. (19 How.) 183 (1856)).
14. Id. at 531.
15. Id. at 527, 530--31.
16. AT&T Corp. v. Microsoft Corp., 414 F.3d 1366, 1371 (Fed. Cir. 2005), cert. granted, 127 S. Ct. 467 (U.S. Oct. 27, 2006) (discussing 130 Cong. Rec. 28069 (daily ed. Oct. 1, 1984) (Congressional debate on Patent Law Amendments Act of 1984, Pub. L. No. 98-622, 98 Stat. 3383)).
17. Id.
18. See Virginia Zaunbrecher, Eolas, AT&T & Union Carbide: The New Extraterritoriality of U.S. Patent Law, 21 Berkeley Tech. L.J. 33, 37-42 (2006) (discussing the cautious approach of the courts in deciding several cases after § 271(f)’s enactment).
19. 245 F.3d 1364 (Fed. Cir. 2001).
20. 375 F.3d 1113 (Fed. Cir. 2004).
21. Waymark, 245 F.3d at 1368.
22. AT&T v. Microsoft, 414 F.3d at 1373 (Rader, J., dissenting) (discussing Waymark, 245 F.3d at 1368, as an example of the territorial focus and application of § 271(f) and U.S. patent law in general).
23. Waymark, 245 F.3d at 1365 (citations omitted); see Zaunbrecher, supra note 18, at 41-42.
24. Pellegrini, 375 F.3d at 1117 (emphasis added).
25. Id.
26. Id. at 1115, 17.
27. Id. at 1119 (discussing Dowagiac Mfg. Co. v. Minn. Moline Plow Co., 235 U.S. 641, 650 (1915)).
28. Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1338-41 (Fed. Cir. 2005), cert. denied, 126 S. Ct. 568 (2005).
29. Id. at 1331 ("Golden master disk[]" is the name given to the single master copy of the software shipped to each manufacturer for use in making subsequent copies of the software that will then be installed on computers.) Eolas has very similar facts to AT&T v. Microsoft. See infra Part II.A.
30. U.S. Patent No. 5,838,906 (filed Oct. 17, 1994) (issued Nov. 17, 1998).
31. Eolas, 399 F.3d at 1331-32.
32. Id at 1340.
33. Id. at 1339. Regarding policy, the court stated that it could not "construct a principled reason" to differentiate between different types of inventions. Id. The court even discussed the TRIPS Agreement: "Patents shall be available and patent rights enjoyable without discrimination as to the place of invention[] [and] the field of technology . . . ." Id. (quoting Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments--Results of the Uruguay Round, Part II, Section 5, Apr. 15, 1994, 1869 U.N.T.S. 299, 33 I.L.M. 1125, 1197 [hereinafter TRIPS Agreement], available at http://www.wto.org/english/docs_e/legal_e/27-trips.pdf).
34. Id. at 1339.
35. Id. (discussing Imagexpo, L.L.C. v. Microsoft Corp., 299 F. Supp. 2d 550, 553 (E.D. Va. 2003)).
36. AT&T Corp. v. Microsoft Corp., 414 F.3d 1366, 1370-71 (Fed. Cir. 2005), cert. granted, 127 S. Ct. 467 (U.S. Oct. 27, 2006).
37. Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366, 1369-72 (Fed. Cir. 2005).
38. Id. at 1379-80.
39. See id. at 1325.
40. AT&T v. Microsoft, 414 F.3d at 1368.
41. Id. at 1368 n.1 ("A ‘speech codec’ is a software program that codes a speech signal into a more compact form, and decodes it back into a signal that sounds like the original."); see U.S. Patent No. 32,580 (filed Sept. 18, 1986) (reissued Jan. 1988).
42. AT&T v. Microsoft, 414 F.3d at 1373 (Rader, J., dissenting). Microsoft sent the software code to Dusseldorf, Germany, and Tokyo, Japan, in addition to New York. Microsoft only contests liability under § 271(f) for copies of the software made abroad by its foreign manufacturers and installed on foreign-made computers. Id. at 1369.
43. Id. at 1368 (majority opinion); AT&T Corp. v. Microsoft Corp., No. 01CV4872, 2004 WL 406640, at *1 (S.D.N.Y. Mar. 5, 2004).
44. 35 U.S.C. § 271(f) (2000).
45. AT&T v. Microsoft, 2004 WL 406640, at *2.
46. Id. at *1.
47. AT&T v. Microsoft, 414 F.3d at 1368.
48. Id.
49. AT&T v. Microsoft, 2004 WL 406640, at *2.
50. Id.
51. Id. at *5.
52. Id. at *7 ("Microsoft seeks to equate replication of the object code abroad with the manufacturing or ‘supply’ of it from abroad. Microsoft’s argument ignores the undisputed fact that the object code is originally manufactured in the United States, and supplied from the United States to foreign replicators or OEMs [original equipment manufacturers] with the intention of incorporating such software into foreign-assembled computers.").
53. AT&T v. Microsoft, 414 F.3d at 1368; Brief for the United States as Amicus Curiae at 5, AT&T v. Microsoft, No. 05-1056 (U.S. Sept. 29, 2006), 2006 WL 2805326 [hereinafter Government Brief].
54. AT&T v. Microsoft, 414 F.3d at 1368-69, 1372.
55. Id. at 1369; see supra Part I (discussing Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325 (Fed. Cir. 2005), cert. denied, 126 S. Ct. 568 (2005)).
56. AT&T v. Microsoft, 414 F.3d at 1370.
57. Id. at 1369-70.
58. Id. at 1370.
59. Id. at 1370; see supra Part I (discussing key cases interpreting § 271(f)).
60. AT&T v. Microsoft, 414 F.3d at 1371.
61. Id.
62. Id.
63. Id. at 1372.
64. Id. (discussing Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 576 (1982)).
65. Id. (Rader, J., dissenting).
66. Id. at 1372-73, 1376.
67. Id. at 1372-73.
68. Id. at 1373.
69. Id. at 1374.
70. Id.
71. Id. at 1374-75.
72. Id. (quoting Pellegrini v. Analog Devices, Inc., 375 F.3d 1113, 1117 (Fed. Cir. 2004) ("[Section 271(f)] applies only where components of a patented invention are physically in the United States and then either sold or exported . . . .")). Judge Rader’s stance here is a little surprising in light of the Eolas decision, which he authored, because finding liability in Eolas necessarily implied a finding that the software copies replicated abroad from the golden master disks were supplied from the United States under § 271(f). See Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1339 (Fed. Cir. 2005), cert. denied, 126 S. Ct. 568 (2005) ("[T]he software code on the golden master disk is not only a component, it is probably the key part of this patented invention.").
73. AT&T v. Microsoft, 414 F.3d at 1374 (Rader, J., dissenting).
74. Id. at 1373, 1375.
75. Id. at 1373 (discussing Dowagiac Mfg. Co. v. Minn. Moline Plow Co., 235 U.S. 641, 650 (1915) ("The right conferred by a patent under our law is confined to the United States and its Territories and infringement of this right cannot be predicated on acts wholly done in a foreign country.")).
76. Id. at 1374.
77. Id. at 1373-74.
78. Id. at 1376.
79. AT&T Corp. v. Microsoft Corp., 127 S. Ct. 467 (2006) (grant of petition for certiorari).
80. Oral Argument, AT&T v. Microsoft, No. 05-1056 (U.S. argued Feb. 21, 2007).
81. Petition for Writ of Certiorari at i, AT&T v. Microsoft, No. 05-1056 (U.S. Feb. 17, 2006), 2006 WL 403897 [hereinafter Certiorari Petition].
82. Brief for Petitioner at 34-44, AT&T v. Microsoft, No. 05-1056 (U.S. Dec. 15, 2006), 2006 WL 3693463 [hereinafter Petitioner Brief].
83. Id. at 34.
84. Id. at 35.
85. Id. at 38.
86. Id. at 14-15.
87. Id. at 15-17, 23.
88. Id. at 18-19
89. Id. at 20-23.
90. Id. at 24-26. Microsoft drew an analogy between current modes of storing software code (e.g., DVDs, CDs, hard drives) and player piano music rolls and early computer punch-card technology; each being a physical embodiment of instructions to tell a device how to function. Id. at 23-25. Microsoft argued that, if the software code in the case at hand was embodied on punch-cards instead of on CDs or DVDs, it would be obvious that the copies of the software made abroad for use with foreign-made computers truly were not supplied from the United States. Id. at 25.
91. Id. at 26-33.
92. Id. at 27-28.
93. Id. at 29 (citation omitted).
94. Id. at 29-30.
95. Brief for Respondent at 17, AT&T Corp. v. Microsoft Corp., No. 05-1056 (U.S. Jan. 2007), 2006 WL 789602 [hereinafter Respondent Brief].
96. Id.
97. Id. at 19.
98. Id. (citations removed).
99. Id. at 20.
100. Id. at 22 (quoting Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1339 (Fed. Cir. 2005), cert. denied, 126 S. Ct. 568 (2005)).
101. Id.
102. Id. at 23.
103. Id. at 24.
104. Id. at 28.
105. Id. at 28, 32-33.
106. Id. at 28-30.
107. Id. at 36.
108. Id. at 37-41. AT&T points out that U.S. companies can avoid liability by sending instructions as to how to write the software code abroad, as opposed to sending the complete code itself. Id. at 36-37.
109. Id. at 39.
110. Id. at 41.
111. Id. at 42.
112. Id. at 42-43.
113. Id. at 44-46.
114. Id. at 46.
115. Id. at 47-49.
116. The following parties have filed amicus curiae briefs with the Supreme Court for this appeal: Software & Information Industry Association ("SIIA"); Business Software Alliance ("BSA"); Amazon.com, Inc. et al.; Yahoo! Inc.; Intel Corp.; Autodesk, Inc.; Shell Oil Co.; Intellectual Property Professors; Software Freedom Law Center ("SFLC"); Fédération Internationale Des Conseils en Propriété Industrielle ("FICPI"); the Solicitor General; American Intellectual Property Law Association ("AIPLA"); Eli Lilly, BayhDoyle25.inc; U.S. Philips Corp.; Wisconsin Alumni Research Foundation et al.; Professor Edward Lee; Software Freedom Law Center; the Houston Intellectual Property Law Assoc., and the Patent, Trademark & Copyright Section of the District of Columbia.
117. Respondent Brief, supra note 95, at 46. Of the amicus briefs filed that address the application of the presumption against extraterritorial to § 271(f), Microsoft, Intellectual Property Professors, SIIA, Intel, FICPI, Yahoo, and the United States support the application of the presumption, while BayhDoyle25.inc opposes it.
118. EEOC v. Arabian American Oil Co. (Aramco), 499 U.S. 244, 248 (1991) (quoting Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285 (1949)).
119. Id.
120. Black’s Law Dictionary 284 (8th ed. 2004). The entry also quotes Hilton v. Guyot, 159 U.S. 113, 163-64 (1895) ("‘Comity,’ in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws."). Id.
121. Paris Convention for the Protection of Intellectual Property, Mar. 20, 1883, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention], available at http://www.wipo.int/treaties/en/ip/paris/. The treaty has been amended several times (most recently in 1979).
122. TRIPS Agreement, supra note 33.
123. See World Intellectual Property Organization, Summary of the Paris Convention for the Protection of Intellectual Property (1883), http://www.wipo.int/treaties/en/ip/paris/summary_paris.html (last visited Mar. 25, 2007) (Applying broadly to all intellectual property rights, the Convention’s substantive provisions "fall into three main categories: national treatment, right of priority, [and] common rules."); World Trade Organization, TRIPS: A More Detailed Overview of the TRIPS Agreement, http://www.wto.org/english/tratop_e/trips_e/intel2_e.htm (last visited Mar. 25, 2007) ("[T]he Agreement provides for certain basic principles, such as national and most-favoured-nation treatment, and some general [procedural] rules . . . [and] requires Member countries to make patents available for any inventions, whether products or processes, in all fields of technology without discrimination, subject to the normal tests of novelty, inventiveness and industrial applicability."). The author benefited greatly from discussing this topic with Professor Reichman.
124. Black’s Law Dictionary 1054 (8th ed. 2004).
125. Id. (quoting Lionel Bently & Brad Sherman, Intellectual Property Law 5 (Oxford Univ. Press, USA 2004) (2001)).
126. See Andrew J. Sherman, International Protection of Brands and Patents, Kauffman eVenturing, Aug. 1, 2006, http://www.eventuring.org/eShip/Redirect?key=Entrepreneurship/Resource/Resource_569.htm (discussing the international treaties that govern patent rights).
127. See the Berne Convention for the Protection of Literary and Artistic Works, (Paris Act) July 24, 1971, S. Treaty Doc. No. 99-27 (1986), 1161 U.N.T.S. 3 (entered into force Mar. 1, 1989), available at http://www.wipo.int/treaties/en/ip/berne/, for the primary treaty governing international copyright law requirements. This treaty has resulted in significant international harmonization of copyright protections. Michael Trenholm and John Holcomb, International Intellectual Property Conventions, Riverside Lawyer, Sept. 2006, at 14, 15, available at http://riversidecountybar.com/barpubs/0609RL.pdf.
128. See Subafilms, Ltd. v. MGM-Pathe Comm. Co., 24 F.3d 1088, 1097 (9th Cir. 1994) (en banc) ("[I]t is commonly acknowledged that the national treatment principle implicates a rule of territoriality."). The Court in Subafilms discusses how U.S. treaty obligations under the newly joined Berne Convention and newly created TRIPS Agreement influence its decision to interpret the Copyright Act conservatively. Id. at 1097-1098. The significance of this case in copyright law was pointed out to the author by Professor Reichman.
129. See Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 531 (1972) ("Our patent system makes no claim to extraterritorial effect; ‘these acts of Congress do not, and were not intended to, operate beyond the limits of the United States,’ and we correspondingly reject the claims of others to such control over our markets.") (citations omitted).
130. Subafilms, 24 F.3d at 1097-98.
131. See Fenwick & West LLP, 2006 Update: International Legal Protection for Software Chart Spring 2006, http://www.softwareprotection.com/chart.htm (last visited Apr. 2, 2007), for a general chart describing patent and copyright protection in different countries and applicable treaties, and World Intellectual Property Organization, Business Method and Computer Software Patents, http://www.wipo.int/sme/en/e_commerce/computer_software.htm (last visited Apr. 2, 2007) [hereinafter Business Method and Computer Software Patents], which generally describes the state of software patentability in the world.
132. Fenwick & West LLP, International Legal Protection for Software, Patent Protection, http://www.softwareprotection.com/patent.htm (last visited Apr. 2, 2007) [hereinafter International Legal Protection for Software]; Business Method and Computer Software Patents, supra note 131. These articles discuss how, despite the fact that software is patentable under the European Patent Convention, the national nature of patent prosecution and litigation in the European Union has resulted in variable software patent protection (patent issuance and enforcement) from country to country. See also State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368, 1374 (Fed. Cir. 1998) (holding that a numerical calculation that produces a "useful, concrete and tangible result" is patentable).
133. See Steven J. Vaughan-Nichols, American-Style Patents Won’t Cross the Pond to EU, eWeek.com, July 6, 2005, http://www.eweek.com (search "American-style patents"; then follow article hyperlink); Software Patent Bill Thrown Out, BBC NEWS, July 6, 2005, http://news.bbc.co.uk/2/hi/technology/4655955.stm. These articles describe the controversial Proposal for a Directive of the European Parliament and of the Council on the Patentability of Computer-Implemented Inventions, COM (2002) 92 final (Feb. 20, 2002), available at http://eur-lex.europa.eu/LexUriServ/site/en/com/2002/com2002_0092en01.pdf, and its failure to be enacted by the European Parliament on July 6, 2005.
134. See Certiorari Petition, supra note 81, at 28 (discussing how "subjecting foreign manufacturer’s to the requirements of U.S. patent law" will disrupt the intellectual property law systems of foreign nations); cf. F. Hoffmann-LaRoche Ltd. v. Empagran, S.A., 542 U.S. 155, 165 (2004) (discussing the presumption against extraterritoriality in the context of applying U.S. antitrust laws to conduct that occurs outside the United States).
135. See Subafilms, Ltd. v. MGM-Pathe Comm. Co., 24 F.3d 1088, 1098 (9th Cir. 1994) (en banc). "Although the [copyright] treaties do not expressly discuss choice-of-law rules, it is commonly acknowledged that the national treatment principle implicates a rule of territoriality." Id. at 1097.
136. Certiorari Petition, supra note 81, at 13.
137. See Patents and Global Drug Development, Pharma Focus Asia, Feb. 2007, http://www.pharmafocusasia.com/magazine/previous_issue/coverstory.htm ("Since being introduced [on 8 June 2005], various substitutes of [H.R. 2795, the Patent Act of 2005] have been proposed in an attempt to reach agreement between interested parties. One proposed substitute known as The Coalition Print was suggested by a coalition of major US corporations in September 2005. Section 6(b) of The Coalition Print would repeal 35 U.S.C 271."); see also Brief of BSA as Amicus Curiae Supporting Petitioner at 21-22, AT&T Corp. v. Microsoft Corp., No. 05-1056 (U.S. Dec. 15, 2006) (pointing out that H.R. 2795, 109th Cong. § 5 (2005) (proposing to amend § 271(f) to limit "component" to "tangible item[s] that [are themselves] combined physically with other components to create the combination that is alleged to infringe"), and S. 3818, 109th Cong. § 5 (2006) (proposing an outright repeal of Section 271(f)), "evince a desire to ensure that software is on the same footing as other patentable material, and that it should receive neither increased scrutiny nor added protections."). The author is grateful to Professor Rai for pointing out this argument.
138. Respondent Brief, supra note 95, at 46.
139. See supra Part III.A.
140. Certiorari Petition, supra note 81, at 20; infra Part III.C.2.
141. U.S. Const. art. I, § 2, cl. 2 (Treaty Power), art. II, § 8, cl. 3 (Commerce Clause).
142. See Brown v. Duchesne, 60 U.S. (19 How.) 183, 195 (1856) (discussing how the power of Congress to "promote the progress of science and the useful arts" is "separate and distinct" from the power of the Executive to enter into treaties and the power of Congress to regulate commerce); Brief for FICPI as Amicus Curiae Supporting Petitioner at 8-9, AT&T v. Microsoft, No. 05-1056 (U.S. Dec. 14, 2006), 2006 WL 3805865 [hereinafter FICPI Brief] (arguing that the United States has the duty, as a signatory of the Paris Convention, "to adopt in accordance with its constitution, the measures necessary to ensure the application of this Convention" and that for "§ 271(f) to extend to foreign countries, there must be a special agreement between the United States and the foreign countries by treaty, not by unilateral act of Congress"); Petitioner Brief, supra note 82, at 31 ("The presumption against the extraterritorial application of U.S. law is especially strong in the patent context because the application of U.S. patent law to foreign commercial activity intrudes upon other nations’ intellectual property law systems and thereby creates a significant risk of international discord.").
143. Certiorari Petition, supra note 81, at 23 (discussing Chi. & S. Air Lines, Inc. v. Watermann S.S. Corp., 333 U.S. 103, 111 (1948) (asserting that "the Judiciary has neither the aptitude, facilities nor responsibility" to make decisions affecting international relations)).
144. See Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 530-31 (1972) (refusing to interpret § 271(f) expansively in the absence of a "clear and certain signal from Congress" because "the sign of how far Congress has chosen to go [to promote the progress of science and the useful arts] can come only from Congress"); AT&T Corp. v. Microsoft Corp., 414 F.3d 1366, 1375 (Fed. Cir. 2005), cert. granted, 127 S. Ct. 467 (U.S. Oct. 27, 2006) (Rader, J., dissenting) (discussing the policy of Deepsouth); Government Brief, supra note 53, at 14 (giving the Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998) (codified at 17 U.S.C. §§ 1201-1204 (2000)), as an example of intellectual property right legislation enacted by Congress to address the technological advances of the digital era); Brief of Intel Corp. as Amicus Curiae in Support of Petitioner at 15-16, AT&T v. Microsoft, No. 05-1056 (U.S. Dec. 15, 2006) (discussing "the lesson of Deepsouth:" that "it is up to Congress, not the courts, to extend the territorial scope of U.S. patent law to address modern developments in technology and international trade").
145. See Parker v. Flook, 437 U.S. 584, 596 (1978) ("It is our duty to construe the patent statutes as they now read in light of our precedents, and we must proceed cautiously when we are asked to extend patent rights into areas wholly unforeseen by Congress.").
146. See F. Hoffmann-LaRoche Ltd. v. Empagran, S.A., 542 U.S. 155, 165 (2004) (discussing how the presumption against extraterritorial application of U.S. law "helps the potentially conflicting laws of different nations work together in harmony").
147. AT&T v. Microsoft, 414 F.3d at 1370.
148. See Wendy M. Grossman, Euro Software Patents Pending, Wired News, Mar. 19, 2005, http://www.wired.com/news/politics/0,1283,66938,00.html (describing how software patents granted by the European Patent Office have not been enforced in Germany); Wikipedia, Software patents under the European Patent Convention, http://en.wikipedia.org/wiki/Software_patent_under_the_European_Patent_Convention (naming the German Federal Court cases rejecting "monopoly claims to computers and programs operating thereon") (as of Apr. 2, 2007, 12:30 EST); R. G. C. Jenkins & Co., Computer Program Inventions Before the German Supreme Court--A Brief Summary, http://www.jenkins-ip.com/serv/serv_10.htm (last visited Mar. 25, 2007) (summarizing key software patent cases where patentability of software requires the invention to be of "a technical nature").
149. See Emma Barraclough, Japan’s Top IP Judges Overturn Panasonic Patent, Managing Intellectual Property News, Oct. 1, 2005, http://www.managingip.com (search for "Japan Panasonic Patent"; then follow hyperlink for article) (discussing the Japanese Intellectual Property High Court invalidation of Panasonic’s software patent in an infringement suit, despite the fact that Japan is typically considered to be much in line with the United States regarding the patentability of software).
150. See Brief of Amicus Curiae Yahoo! Inc. in Support of Petitioner at 18, AT&T v. Microsoft, No. 05-1056 (U.S. Dec. 15, 2006), 2006 WL 3723904 [hereinafter Yahoo Brief] ("These nations are actively engaged in deciding how and under what circumstances software should be patentable. Interference with their carefully made decisions in unlikely to be eagerly welcome.").
151. See Brief for Amicus Curiae Bar of D.C., Patent, Trademark & Copyright Section in Support of Neither Party at 10, AT&T v. Microsoft, No. 05-1056 (U.S. Dec. 15, 2006), 2006 WL 3740356 ("Regardless of whether a violation of TRIPS has occurred, the Federal Circuit should be cognizant of possible missteps that would cause the United States to suffer international repercussions."); World Intellectual Property Organization, Substantive Patent Law Harmonization, http://www.wipo.int/patent/law/en/harmonization.htm (last visited Mar. 25, 2007) (describing the current drafting of the Substantive Patent Law Treaty); FICPI Brief, supra note 142, at 20 (discussing the failure of the European Union’s proposed Directive on software patentability and the impasse of the international negotiations over the Substantive Patent Law Treaty, partly due to the scope of software patentability).
152. Certiorari Petition, supra note 81, at 28-29. While AT&T v. Microsoft only deals with Microsoft’s activities in Japan and Germany, the impact of the Federal Circuit’s interpretation of § 271(f) will reach all foreign markets.
153. Id.
154. See discussion supra Part III.A; see also James Boyle, Shamans, Software, and Spleens: Law and the Construction of the Information Society 3 (Harvard University Press 1997) (1996) (discussing how the United States has become the world's most vigorous and effective champion of strengthened intellectual property rights). By interfering with the intellectual property regimes of other nations, the United States harms its reputation as champion of intellectual property rights.
155. See Brief Amici Curiae of Intellectual Property Professors in Support of Reversal at 11-12, AT&T v. Microsoft, No. 05-1056 (U.S. Dec. 14, 2006), 2006 WL 3740618.
156. Id.
157. See Certiorari Petition, supra note 81, at 20 (discussing "the looming threat of crippling global liability" U.S. companies face and the high risk due to the "thousands of unexploited patents that comprise the ‘modern patent thicket’").
158. See AT&T Corp. v. Microsoft Corp., 414 F.3d 1366, 1376 (Fed. Cir. 2005), cert. granted, 127 S. Ct. 467 (U.S. Oct. 27, 2006) (Rader, J., dissenting) (discussing how, prior to AT&T v. Microsoft, companies needed to seek protection for inventions abroad under the laws of other countries); Certiorari Petition, supra note 81, at 20, 22 (discussing the "daunting and unforeseen" potential infringement damages U.S. companies now face and how this "jeopardizes the billions of dollars of investments that American high-technology business have made in overseas manufacturing facilities"). The Federal Circuit’s interpretation of § 271(f) would create a situation much like a de facto compulsory licensing system because companies like Microsoft, who developed business models using foreign manufacturers to copy software for foreign markets, in reliance on the state of the law prior to AT&T v. Microsoft, will be forced now to either license the software for use abroad, risk liability for infringement under § 271(f), or incur the heavy costs of redesigning their business models.
159. Certiorari Petition, supra note 81, at 22. American companies that have such foreign manufacturing facilities will not have considered this liability in their foreign investment calculations and now may incur significant costs in changing their business strategy. Such companies also did not have the opportunity to negotiate better licensing terms than will be imposed by the courts. An example of the potential damages that can arise from expansive liability under § 271(f) is the recent verdict against Microsoft for $1.52 billion in damages for infringement (in the United States and abroad) of two software patents held by Lucent-Alcatel: this is the largest damages award for patent infringement to date. See Special Verdict Form, Lucent Techs. Inc. v. Gateway, Inc. (2007) (No. 02cv2060-B(CAB)), available at http://www.casd.uscourts.gov/casd/filerev.nsf/a4224145c26d1ccb88256913007f6e67/eaddc4a24ae1242d8825728b00047562?OpenDocument ; Jeff St. Onge and Bill Callahan, Microsoft Told to Pay Alcatel-Lucent $1.52 Billion (Update 7), Bloomberg.com, Feb. 22, 2007, http://www.bloomberg.com (search "Search News" for "Alcatel-Lucent"; then follow article hyperlink).
160. Certiorari Petition, supra note 81, at 22.
161. See Certiorari Petition, supra note 81, at 21 (discussing how the Federal Circuit’s expansive interpretation of ‘component’ of a patented invention opens the door to liability in the semiconductor and biotechnology industries); Brief of SIIA as Amicus Curiae Supporting Petitioner at 18-19, AT&T v. Microsoft, No. 05-1056, 2006 WL 3740362 [hereinafter SIIA Brief]; Patents and Global Drug Development, Pharma Focus Asia, Feb. 2007, http://www.pharmafocusasia.com/magazine/previous_issue/coverstory.htm. In the face of such open-ended liability, there have been moves in Congress to amend and repeal § 271(f); see also supra text accompanying notes 137-40.
162. Government Brief, supra note 53, at I.
163. See, e.g.,Yahoo Brief, supra note 150, at 8-9 (software code on the golden master disks is a form of instructions that, when installed on computers, creates a component); SIIA Brief, supra note 161, at 9 ("[A] ‘component’ . . . in the context of computer code must refer to the particular instance of the computer code that is downloaded onto, and thus physically part of, an accused computer system."); Government Brief, supra note 53, at 7-10 (Software is not "intangible information" because it has a physical presence; software can be a component because it can be "a part, element or ingredient of a patented invention.").
164. Government Brief, supra note 53, at I. In the author’s opinion, the court is likely to answer the first question in the affirmative based on its own and the Federal Circuit’s software patent jurisprudence.
165. EEOC v. Arabian American Oil Co. (Aramco), 499 U.S. 244, 248 (1991).
166. See AT&T Corp. v. Microsoft Corp., 414 F.3d 1366, 1369-71 (Fed. Cir. 2005), cert. granted, 127 S. Ct. 467 (U.S. Oct. 27, 2006).
167. Petitioner Brief, supra note 82, at 30 (quoting F. Hoffmann-LaRoche Ltd. v. Empagran, S.A., 542 U.S. 155, 174 (2004)) (citations omitted).
168. See Certiorari Petition, supra note 81, at 24 (discussing how "[e]ven where Congress has unequivocally expressed its intention to give a U.S. law extraterritorial effect, the parameters of that authority must be strictly construed in light of the general presumption against extraterritoriality").
169. AT&T v. Microsoft, 414 F.3d at 1369 (quoting Williams v. Taylor, 529 U.S. 420, 431 (2000)).
170. Id .at 1372 (Rader, J., dissenting).
171. Id.
172. Id. at 1374. Judge Rader points out that the majority’s interpretation of "supplies" was based on the ease with which software code can be copied and transported, not on the principle that the two acts are the same thing.
173. See id. (discussing 130 Cong. Rec. 28069 (daily ed. Oct. 1, 1984) (Congressional debate on Patent Law Amendments Act of 1984, Pub. L. No. 98-622, 98 Stat. 3383) ("This proposal responds to the United States Supreme Court decision in Deepsouth Packing . . . concerning the need for a legislative solution to close a loophole in patent law."); see also supra text accompanying notes 11-15.
174. AT&T v. Microsoft, 414 F.3d at 1375 (Rader, J., dissenting).
175. See id. at 1372, 1376. This interpretation is consistent with the Federal Circuit’s decisions in both Waymark Corp. v. Porta Systems Corp., 245 F.3d 1364, 1368 (Fed. Cir. 2001), and Pellegrini v. Analog Devices, Inc., 375 F.3d 1113, 1117 (Fed. Cir. 2004), as there is no intent that master copies of the software shipped abroad be combined with foreign computers to create infringing devices; only the foreign-made copies of the software, which are not supplied from the United States, will be combined.
176. See AT&T v. Microsoft, 414 F.3d at 1376 (Rader, J., dissenting).
177. See id. (discussing how the majority’s decision expanded the remedies available to patent holders to include liability for acts conducted abroad).
178. See F. Hoffmann-LaRoche Ltd. v. Empagran, S.A., 542 U.S. 155, 166 (2004) ("Why is it reasonable to apply [U.S.] law to conduct that is significantly foreign insofar as that conduct causes independent foreign harm and that foreign harm alone gives rise to the plaintiff's claim? We can find no good answer to the question."); see also supra Parts III.A-B (discussing the principles of comity and national treatment and the separation of powers doctrine with respect to the presumption against extraterritorial application of U.S. patent law).