Part I – Microsoft Corp. v. AT&T, 550 U.S. ____ (2007)
The question presented to the Supreme Court was whether Microsoft’s liability would extend to computers made in another country when loaded with Windows software copied abroad from a master disk or electronic transmission dispatched by Microsoft from the United States?
Generally, no patent infringement occurs when a patented product is made and sold in another country, except where the patented invention’s components are supplied from the United States for combination abroad. 35 U.S.C. § 271(f)(1).
AT&T holds a patent on a computer used to digitally encode and compress recorded speech. Microsoft’s Windows incorporates software that enables a computer to process speech in the manner claimed by AT&T’s patent. Microsoft sends its software on a master disk to foreign manufacturers, who then make copies of the disk and install them onto computers that they sell. The master disk is not installed.
AT&T sued Microsoft and argued that Microsoft infringed on its patent by supplying from the United States, for combination abroad, components of AT&T’s patented computer, and therefore Microsoft would be liable under § 271. Microsoft argued that the copies were not supplied from the United States and were not a component under § 271.
The Supreme Court answered the question presented in the negative, and characterized the copies of the Windows operating code as a blueprint giving instructions rather than a component as AT&T argued. The Supreme Court reasoned that a blueprint may contain precise instructions related to components of a patented instrument, but the blueprint itself is not a component of the patented instrument. Specifically, the court ruled that if the code is sent abroad, the copy made from it will not be considered a component under § 271. The Court explained that AT&T’s only options would be to seek foreign patent prosecution or seek a change in § 271 from Congress.