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Can a company skirt infringement of a U.S. patent for a software-enabled computer by sending a master software disk from the United States to a non-U.S. country where computers are loaded with installation disks generated from the master disk, but are not loaded with the master disk itself? In Microsoft Corp. v. AT&T Corp., 550 U.S. ____, 127 S.Ct. 1746 (2007), a highly anticipated decision with potentially significant ramifications for the enforcement of software-based patents, the Supreme Court answered “yes.”

With Justice Ruth Bader Ginsburg writing for a 7-1 majority, the Court reversed the Federal Circuit’s ruling in favor of patentee AT&T. The statute at issue, 35 USC �271(f), extends, in limited circumstances, the reach of U.S. patent law to activities in non-US countries. Under this statute, a patent is infringed when one “supplies … from the United States” a patented invention’s “components” for “combination” abroad. The AT&T patent at issue, U.S. Reissue Patent No. 32,580, is for an invention with two components: a computer and its speech-processing software. According to the Court, Microsoft’s Windows operating system “has the potential to infringe AT&T’s patent, because Windows incorporates software code that, when installed, enables a computer to process speech in the manner claimed by that patent.”

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