TO: Professor Risch
FROM: Jennifer L. Deitz
DATE: November 6, 2007
RE: Microsoft Corp. v. AT&T, 127 S. Ct. 1746 (U.S. 2007)
Facts: AT&T holds a patent for a computer for digitally encoding and compressing recorded speech. Microsoft’s Windows operating system has the potential to infringe on AT&T’s patent because Windows has a software code, that when installed on a computer, enables that computer to process speech in the same way claimed by the AT&T patent. However, uninstalled Windows software does not infringe on AT&T’s patent. Microsoft sent master versions of the Windows software on disks or through encrypted e-mails to foreign computer manufacturers. The manufacturers then made copies from this master version and installed them on the foreign manufacturer’s computers. The computers were then sold to foreign users abroad. AT&T sued Microsoft for infringement under 35 U.S.C § 271(f), claiming that Microsoft “supplied . . . from the United States," for "combination" abroad, "components" of AT&T's patented speech-processing computer†and thus violated the statute.
Procedural History: The district court found Microsoft liable under 35 U.S.C. § 271(f) and a divided Federal Circuit panel affirmed. Microsoft appealed the decision to the U.S. Supreme Court.
Rule: 35 U.S.C. § 271(f)(1), which states that infringement does occur when a person or company “supplies… from the United States,†for “combination†abroad, a patented invention’s “components.â€
Issue: Under 35 U.S.C. § 271(f), the exception to the no infringement rule for products made and sold in another country, is Microsoft liable for infringement of AT&T’s patent for a computer used to digitally encode and compress recorded speech when they sent a master copy of Windows software with the ability to infringe the patent to foreign computer manufacturers, which were copied and then installed on the foreign manufactured computers and sold abroad?
Holding: The Supreme Court held that since Microsoft did not export the copies of the Windows software that were actually installed on the foreign computers, but only exported a master version, that it did not “supply… from the United States,†“ components†of the foreign made computers and thus was not liable for infringement under 35 U.S.C. § 271(f).
Reasoning: The Court stated that neither party argued that software can ever qualify as a “component†under § 271(f), but the parties disagreed on when software becomes a component. The Court defined software as the “set of instructions, known as code that directs a computer to perform specified functions or operations.†Citing Fantasy Sports Properties, Inc. v. Sportsline.com, Inc., 287 F.3d 1108, 1118 (C.A. Fed. 2002). According to the Court software can be “conceptualized†in two ways. The first is software in the abstract, meaning the instructions themselves detached from any medium, this is the view that AT&T argued. The second is a tangible copy of the software, such as the instructions encoded on a CD-ROM. However, the Court disagreed with AT&T, but stated that software is not a component under the statute until it is expressed as a computer-readable “copy.†According to the Court any software while it remains detached from an activating medium remains uncombinable. The abstract view of software is just an idea without any physical embodiment, and thus does not fall within the language of § 271 that the alleged infringer must supply “components†amenable to “combination.†The Court compared Windows in the abstract to a blueprint, in that they both have a detailed set of instructions for the construction and combination of components of a patented device, but Windows abstracted, like a blueprint, is not itself a combinable component of that device. The further stated that especially in patent law there is a presumption against extraterritoriality and that presumption is not defeated by the exception created in § 271(f), but “remains instructive in determining the extent of the statutory exception.†For the above reasons the U.S. Supreme Court held that Microsoft was liable to AT&T for infringement under 35 U.S.C. § 271(f).
Analysis: I do not completely understand the distinction the Supreme Court made between the master disk of the Windows software sent, on either a physical disk or an encrypted e-mail, to the foreign manufacturers versus the copies made from that master version and then installed on the foreign computers, thus enabling them to infringe on AT&T’s patent. Did Microsoft still not “supply… from the United States†a “component†that when installed on the computers enabled the infringement? Without the master version sent to the foreign manufacturers by Microsoft, they never could have installed any Windows software on the computers.
FROM: Jennifer L. Deitz
DATE: November 6, 2007
RE: Microsoft Corp. v. AT&T, 127 S. Ct. 1746 (U.S. 2007)
Facts: AT&T holds a patent for a computer for digitally encoding and compressing recorded speech. Microsoft’s Windows operating system has the potential to infringe on AT&T’s patent because Windows has a software code, that when installed on a computer, enables that computer to process speech in the same way claimed by the AT&T patent. However, uninstalled Windows software does not infringe on AT&T’s patent. Microsoft sent master versions of the Windows software on disks or through encrypted e-mails to foreign computer manufacturers. The manufacturers then made copies from this master version and installed them on the foreign manufacturer’s computers. The computers were then sold to foreign users abroad. AT&T sued Microsoft for infringement under 35 U.S.C § 271(f), claiming that Microsoft “supplied . . . from the United States," for "combination" abroad, "components" of AT&T's patented speech-processing computer†and thus violated the statute.
Procedural History: The district court found Microsoft liable under 35 U.S.C. § 271(f) and a divided Federal Circuit panel affirmed. Microsoft appealed the decision to the U.S. Supreme Court.
Rule: 35 U.S.C. § 271(f)(1), which states that infringement does occur when a person or company “supplies… from the United States,†for “combination†abroad, a patented invention’s “components.â€
Issue: Under 35 U.S.C. § 271(f), the exception to the no infringement rule for products made and sold in another country, is Microsoft liable for infringement of AT&T’s patent for a computer used to digitally encode and compress recorded speech when they sent a master copy of Windows software with the ability to infringe the patent to foreign computer manufacturers, which were copied and then installed on the foreign manufactured computers and sold abroad?
Holding: The Supreme Court held that since Microsoft did not export the copies of the Windows software that were actually installed on the foreign computers, but only exported a master version, that it did not “supply… from the United States,†“ components†of the foreign made computers and thus was not liable for infringement under 35 U.S.C. § 271(f).
Reasoning: The Court stated that neither party argued that software can ever qualify as a “component†under § 271(f), but the parties disagreed on when software becomes a component. The Court defined software as the “set of instructions, known as code that directs a computer to perform specified functions or operations.†Citing Fantasy Sports Properties, Inc. v. Sportsline.com, Inc., 287 F.3d 1108, 1118 (C.A. Fed. 2002). According to the Court software can be “conceptualized†in two ways. The first is software in the abstract, meaning the instructions themselves detached from any medium, this is the view that AT&T argued. The second is a tangible copy of the software, such as the instructions encoded on a CD-ROM. However, the Court disagreed with AT&T, but stated that software is not a component under the statute until it is expressed as a computer-readable “copy.†According to the Court any software while it remains detached from an activating medium remains uncombinable. The abstract view of software is just an idea without any physical embodiment, and thus does not fall within the language of § 271 that the alleged infringer must supply “components†amenable to “combination.†The Court compared Windows in the abstract to a blueprint, in that they both have a detailed set of instructions for the construction and combination of components of a patented device, but Windows abstracted, like a blueprint, is not itself a combinable component of that device. The further stated that especially in patent law there is a presumption against extraterritoriality and that presumption is not defeated by the exception created in § 271(f), but “remains instructive in determining the extent of the statutory exception.†For the above reasons the U.S. Supreme Court held that Microsoft was liable to AT&T for infringement under 35 U.S.C. § 271(f).
Analysis: I do not completely understand the distinction the Supreme Court made between the master disk of the Windows software sent, on either a physical disk or an encrypted e-mail, to the foreign manufacturers versus the copies made from that master version and then installed on the foreign computers, thus enabling them to infringe on AT&T’s patent. Did Microsoft still not “supply… from the United States†a “component†that when installed on the computers enabled the infringement? Without the master version sent to the foreign manufacturers by Microsoft, they never could have installed any Windows software on the computers.