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Infringement By Source Code 'Golden Master': Developments in Patent Infringement Law Concerning Extra-U.S. Sales

By Douglas E. Lumish and Sonal N. Mehta
January 04, 2006

Until recently, U.S. software companies comfortably operated under the assumption that selling software that was copied from a “golden master” CD outside of the United States, and which was sold only to customers outside of the United States, did not infringe U.S. patents. Recent developments in the law have destroyed that comfort and made clear that infringement liability may very well lie for exactly those types of foreign sales.

Before 1984, patent infringement liability existed only for the making, using, sale or offer for sale of patented inventions in the United States. This territorial limitation on infringement liability created a safe harbor ' or a loophole depending on your perspective ' for would-be infringers: Under the pre-1984 version of 35 U.S.C. '271, an alleged infringer could make the individual components of a patented system or apparatus in the United States and ship them abroad with instructions on how the parts should be put together, all without any liability for patent infringement.

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