Number: RS22670
Title: Exporting Software and the Extraterritorial Reach of U.S. Patent Law: Microsoft Corp. v. AT&T Corp.
Authors: Brian T. Yeh, American Law Division 
Abstract: Generally speaking, United States patent law does not have extraterritorial effect. The exception, however, is § 271(f) of the Patent Act, which makes it an act of patent infringement to manufacture within the United States the components of a patented invention and then export those disassembled parts for combination abroad into an end product. However, in Microsoft Corp. v. AT&T Corp. (550 U.S. ___ , No. 05-1056, decided April 30, 2007), the U.S. Supreme Court held that software companies are not liable for patent infringement under § 271(f) when they export software that has been embodied in machine-readable, physical form (a CD-ROM, for example), with the intent that such software be copied abroad for installation onto foreign-manufactured computers. In this case, AT&T holds a patent on a speech software program upon which Microsoft's Windows operating system infringes. Microsoft ships abroad a "master version" of Windows, either on a disk or via encrypted electronic transmission, which foreign computer manufacturers use to generate copies. Thus, the actual copies of the Windows software that are installed onto the foreign-made computers are made abroad. Consequently, according to the Supreme Court, liability for such unauthorized replication, if any, would have to arise under the patent laws of those foreign countries, not the U.S. Patent Act.
Pages: 6
Date: May 31, 2007