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Microsoft v. AT&T: The Supreme Court Grapples with How to Treat Software under '271(f) of the Patent Act
On April 30, 2007, the Supreme Court handed down its decision in Microsoft Corp. v. AT&T Corp., No. 05-1056, 127 S. Ct. 1746 (2007). The Microsoft decision addressed the scope of '271(f) of the Patent Act, 35 U.S.C. '271(f), which provides that it is an act of infringement to 'supply' the 'components' of a patented invention from the United States for combination outside the United States.
The Federal Circuit had held that Microsoft infringed an AT&T U.S. patent under '271(f) when it sent software from the United States to a foreign country (by shipping a master disk or by electronic transmission), where the software was then copied onto disks and installed onto foreign computers. The Supreme Court reversed in a 7-1 decision, holding that Microsoft did not infringe under '271(f). The four justices in the majority held that only the actual physical copies of the software stored on the disks and installed onto the foreign computers ' not the software code in the abstract ' qualified as 'components,' and thus that there was no liability because these copies had not been 'supplied' from the United States. The three justices who concurred went even further, holding that a 'component' must be something physical, and that because no physical thing originating in the United States was 'combined' with the foreign computers, there was no infringement.
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