Mary LaFrance on Software as a "Component" of a Patented Invention under Section 271(f): Microsoft Corp. v. AT&T Corp. 127 S.Ct. 1746, 167 L.Ed.2d 737, 2007 U.S. LEXIS 4744 (2007)
Professor of Law, William S. Boyd School of Law, University of Nevada Las Vegas
When software object code supplied from the United States is copied overseas, and only the copies are installed in computers so as to produce a programmed computer that would infringe a patent if assembled in the United States, the Supreme Court held in Microsoft v. AT&T that the exporter has not "supplied " a "component" of a patented invention for assembly overseas. As such, the action has not infringed within the meaning of 35 USCS 271(f). Discussing the court's analysis, the differing perspectives of the majority and dissent, and unanswered questions, Law Professor Mary LaFrance writes:
The issue raised in Microsoft v. AT&T was whether either provision of Section 271(f) applies when software is sent abroad from the United States , on a master disk or by electronic transmission, then copied by the foreign recipient and installed on computers that were made and sold overseas. As framed by the Supreme Court, there were two issues: First, under what circumstances does software alone qualify as a “component” under Section 271(f)? Second, on the facts presented in this case, were one or more “components” of the patented invention “supplied” from the United States?
On the first question, while a majority of the Court declined to address “whether software in the abstract, or any other intangible, can ever be a component under § 271(f),” (emphasis in original), the majority held that software can be a component when it is expressed in a tangible machine-readable copy, such as a CDROM. On the second question, the majority held that, on the facts presented in this case, the “components” in question (that is, the tangible machine-readable copies of software) were not “supplied” from the United States, because the tangible copies that were actually installed in the overseas computers were made outside the United States, even though they were reproduced from the copies that were shipped, or electronically transmitted, from the United States.
As a result of this ruling, infringement liability for supplying software for overseas use in a patented combination can easily be avoided if the actual copies of the software used in the combination are made overseas, even if they are copied from a master copy that was supplied from the United States. However, anyone taking advantage of this opportunity faces possible liability for copyright infringement under the laws of the country where the software is copied, if the copyright laws of that country extend to computer software. In addition, if the combination in question is patented under the laws of the country where the software is installed in the computers, there is potential liability for patent infringement under local law. Thus, before taking advantage of the Court’s narrow interpretation of the terms “component” and “supplied,” it is important to assess potential liability under foreign law for the activities taking place on foreign soil.
(Citation omitted.)