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Patent Not Infringed When Foreign Producer Adds Components Out of the U.S.
Description Supreme Court held that Microsoft did not infringe an AT&T patent when foreign makers of computers added the AT&T patented component to Windows operating systems provided by Microsoft.
Topic Intellectual Property
Key Words Patents; Infringement; Foreign Usage; Liability
C A S E   S U M M A R Y
Facts AT&T holds a patent on a computer use to digitally encode and compress recorded speech. Windows operating system has the potential to infringe because it incorporates code that enables a computer to process speech in a manner claimed by the patent. Microsoft sells Windows to foreign manufacturers who install the software on computers they sell. AT&T sued for infringement for the foreign installations of Windows. Microsoft contended that software installed overseas was not supplied from the U.S. The lower courts held for AT&T; Microsoft appealed.
Decision Reversed. AT&T is correct that a copy of computer software qualifies as a component within the meaning of the Patent Act providing that infringement occurs when one supplies from the United States for combination abroad. However, this section is not applicable where computer software, Windows, was first sent from the U.S. to a foreign computer maker on master disk, or by electronic transmission, and then copied by the foreign recipient for installation on computers made and sold abroad. The copies, as components installed on the foreign computers, were not supplied from the U.S.
Citation Microsoft v. AT&T, 127 S.Ct. 1746 (Sup. Ct., 2007)

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