Microsoft Corp. v. AT&T Corp.
AT&T sued Microsoft for patent infringement. Microsoft supplies master versions of its Windows software to foreign computer manufacturers, who are licensed to generate multiple copies of Windows for installation on foreign-assembled computers that are then sold to foreign customers. The master versions are created in the United States and are sent abroad for replication. AT&T alleged that the exported master versions of Windows incorporated certain computer codes ("speech codecs"), which, when installed on a computer, infringe a patent owned by AT&T. Title 35 U.S.C. § 271(f)(1) provides that a patent is infringed if "components of a patented invention" are "supplie[d]. . . from the United States . . . in such manner as to actively induce the combination of such components outside of the United States." The district court ruled in favor of AT&T. On appeal, Microsoft argued that software could not be a component of a patented invention for the purposes of 35 U.S.C. § 271(f)(1), and further that it should not be liable for copies of Windows made abroad because those copies are not “supplied” from the United States.
The Court of Appeals for the Federal Circuit affirmed, holding that software could be a “component” of a patented invention and that software replicated abroad from a master version exported from the United States–with the intent that it be replicated–is “supplied” from the United States for the purposes of § 271(f).
Questions Presented:
Title 35 U.S.C. § 271(f)(1) provides that it is an act of direct patent infringement to “suppl[y]. . . from the United States . . . components of a patented invention . . . in such manner as to actively induce the combination of such components outside of the United States.”
In this case, AT&T Corp. alleges that when Microsoft Corporation’s Windows software is installed on a personal computer, the programmed computer infringes AT&T’s patent for a “Digital Speech Coder” system. AT&T sought damages not only for each Windows-based computer made or sold in the United States, but also, under Section 271(f)(1), for each computer made and sold abroad. Extending Section 271(f)–and consequently, the extraterritorial application of U.S. patent law–the Federal Circuit held that Microsoft infringed under Section 271(f)(1) when it exported master versions of its Windows software code to foreign computer manufacturers, who then copied the software code and installed the duplicate versions on foreign-manufactured computers that were sold only to foreign consumers. The questions presented are:
(1) Whether digital software code–an intangible sequence of “1’s” and “0’s”–may be considered a “component[] of a patented invention” within the meaning of Section 271(f)(1); and, if so,
(2) Whether copies of such a “component[]” made in a foreign country are “supplie[d] . . . from the United States.”
