Title 35 U.S.C. section 271(f)(1) provides that it is an act of direct patent infringement to
"suppl[y]... from the United States ... components of a patented invention ... in
such manner as to actively induce the combination of such components outside of
the United States."
In this case, AT&T Corp. alleges that when Microsoft Corporation's Windows
software is installed on a personal computer, the programmed computer infringes
AT&T's patent for a "Digital Speech Coder" system. AT&T sought damages not only
for each Windows-based computer made or sold in the United States, but also,
under Section 271(f)(1), for each computer made and sold abroad. Extending
Section 271(f)—and consequently, the extraterritorial application of U.S. patent
law—the Federal Circuit held that Microsoft infringed under Section 271(f)(1) when
it exported master versions of its Windows software code to foreign computer
manufacturers, who then copied the software code and installed the duplicate
versions on foreign-manufactured computers that were sold only to foreign
consumers. The questions presented are:
Whether digital software code—an intangible sequence of "1's" and "0's"—may
be considered a "component[] of a patented invention" within the meaning of
Section 271(f)(1); and, if so,
Whether copies of such a "component[]" made in a foreign country are "supplie
[d] . . . from the United States."