[A2k] SCOTUS: Abstract Code a Blueprint, not Component of a Patent

[Seth Johnson]

This is a multi-part message in MIME format.
--

(This finding proceeds from recognizing the crucial distinction of the
abstraction of code.  -- Seth)

> http://news.zdnet.com/2102-3513_22-6180188.html
> http://www.supremecourtus.gov/opinions/06pdf/05-1056.pdf

---

Supreme Court sides with Microsoft in patent spat

04/30/07

In what could be a broader victory for American software companies,
the U.S. Supreme Court on Monday ruled that Microsoft cannot be forced
to pay up for patent infringement that occurs when copies of Windows
are made and installed on computers abroad.

Generally, U.S. patent protection does not transcend American borders.
At issue in this case is a complex exception in patent law that bars
American companies from shipping "components" to foreign
manufacturers, which could then combine them to make a machine that
infringes on U.S. patents. The law does not, however, restrict sending
blueprints that could theoretically prompt a foreign company to build
an identical product.

Scarcely two months after they heard oral arguments in a patent
dispute that pitted the Windows maker against AT&T, the justices ruled
7-1 (PDF) that "abstract software code" shipped by Microsoft to
foreign manufacturers in the form of "golden master discs" amounts to
such a blueprint, not a "component" of the invention.

"The master disc or electronic transmission Microsoft sends from the
United States is never installed on any of the foreign-made computers
in question," the justices said in a majority opinion penned by
Justice Ruth Bader Ginsburg. "Instead, copies made abroad are used for
installation."

That means under existing federal law, the company cannot be held
liable for infringement that occurs as a result of those foreign
installations, the justices concluded, although they seemed to invite
Congress to take another look at what AT&T argued are loopholes in the
law.

If AT&T wants to prevent its inventions from being copied abroad, the
justices added, its "remedy lies in obtaining and enforcing foreign
patents."

Andrew Leibnitz, an intellectual property lawyer for Farella Braun and
Martel in San Francisco, said in making the ruling the court
determined that U.S. patent law governs only the U.S. and not the
world. Leibnitz said that is "recognition of a deference that the U.S.
has not previously evinced in world affairs."

It's also, he said, a sign that the high court is leery of expanding
patent law.
Related story
High court ruling could curb 'obvious' patents
Unanimous Supreme Court opinion calls for a more flexible standard to
decide whether combinations of existing elements deserve protection.

"I think it shows, if not hostility, a reluctance to see patent law
applied more broadly than absolutely necessary," Leibnitz said, adding
that the ruling will impact the whole software sector as well as other
industries. "The Supreme Court is talking about not just software, but
prototypes that are sent abroad...templates or blueprints or any other
idea that gets sent abroad that needs to be combined with something
physical in order to potentially infringe."

The decision could save Microsoft and other global software companies
billions of dollars. When a jury earlier this year ordered Redmond to
pay Alcatel-Lucent Technologies $1.5 billion in a patent dispute over
MP3 audio technology used in Windows, the company noted that about
half of the damages were calculated based on overseas sales of Windows
PCs.

Microsoft general counsel Brad Smith called the decision "important
for the entire information technology industry, adding clarity and
balance to our patent system." He said he believed the damage awards
in the Alcatel-Lucent case and an earlier case against the University
of California's Eolas spinoff would be revisited, and the company
welcomed that result.

"More generally, because Microsoft is such a large, rich company and
competes in so many business areas, it's increasingly been the target
of patent litigation," said Matt Rosoff, a lead analyst with the firm
Directions on Microsoft. "So any ruling that decreases the amount of
potential liability is a good thing for Microsoft."

AT&T Knowledge Ventures CEO Scott Frank said the company was
disappointed in the court's ruling. "All U.S.-based sources of
innovation--including the software development community--could
benefit from patent laws that enable fair, appropriate protection and
valuation of new technologies and inventions domestically and
overseas," he said in a statement.

The ruling marks the latest in a string of patent-focused cases heard
in the past year by the high court that have been hailed by technology
companies. Separately on Monday, the Supreme Court issued a unanimous
ruling designed to make it easier to weed out patents covering obvious
combinations of elements.

The Supreme Court agreed to review the Microsoft-AT&T matter after a
federal district court and the U.S. Court of Appeals for the Federal
Circuit both found Microsoft liable not only for violating an AT&T
patent covering a "digital speech coder" in U.S.-assembled computers
but also in those abroad. AT&T first sued Microsoft over the patent in
2001.
--

> http://www.supremecourtus.gov/opinions/06pdf/05-1056.pdf


SUPREME COURT OF THE UNITED STATES

No. 05=961056

MICROSOFT CORPORATION, PETITIONER v.
AT&T CORP.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT

[April 30, 2007]

JUSTICE GINSBURG delivered the opinion of the Court, except as to footnote =
14.

It is the general rule under United States patent law that no infringement =
occurs when a patented product is made and sold in another country. There i=
s an exception.Section 271(f) of the Patent Act, adopted in 1984, providest=
hat infringement does occur when one "supplies . . . from the United States=
," for "combination" abroad, a patented invention's "components." 35 U. S. =
C. =A7271(f)(1). This case concerns the applicability of =A7271(f) to compu=
ter softwarefirst sent from the United States to a foreign manufac-turer on=
 a master disk, or by electronic transmission, then copied by the foreign r=
ecipient for installation on computers made and sold abroad.

AT&T holds a patent on an apparatus for digitally encoding and compressing =
recorded speech. Microsoft's Windows operating system, it is conceded, has =
the potential to infringe AT&T's patent, because Windows incorpo-rates soft=
ware code that, when installed, enables a com-puter to process speech in th=
e manner claimed by that patent. It bears emphasis, however, that uninstall=
ed Windows software does not infringe AT&T's patent any more than a compute=
r standing alone does; instead, thepatent is infringed only when a computer=
 is loaded withWindows and is thereby rendered capable of performing asthe =
patented speech processor. The question before us: Does Microsoft's liabili=
ty extend to computers made inanother country when loaded with Windows soft=
warecopied abroad from a master disk or electronic transmis-sion dispatched=
 by Microsoft from the United States? Our answer is "No."

The master disk or electronic transmission Microsoft sends from the United =
States is never installed on any ofthe foreign-made computers in question. =
Instead, copies made abroad are used for installation. Because Microsoft do=
es not export from the United States the copies actually installed, it does=
 not "suppl[y] . . . from the United States" "components" of the relevant c=
omputers, and therefore is not liable under =A7271(f) as currently written.

Plausible arguments can be made for and against extending =A7271(f) to the =
conduct charged in this case as infringing AT&T's patent. Recognizing that =
=A7271(f) is an exception to the general rule that our patent law does not =
apply extraterritorially, we resist giving the language in which Congress c=
ast =A7271(f) an expansive interpretation. Our decision leaves to Congress'=
 informed judgment any adjustment of =A7271(f) it deems necessary or proper=
.

I

Our decision some 35 years ago in Deepsouth Packing Co. v. Laitram Corp., 4=
06 U. S. 518 (1972), a case about a shrimp deveining machine, led Congress =
to enact =A7271(f).In that case, Laitram, holder of a patent on the time-an=
d-expense-saving machine, sued Deepsouth, manufacturer of an infringing dev=
einer. Deepsouth conceded that the Patent Act barred it from making and sel=
ling its deveining machine in the United States, but sought to salvage a po=
rtion of its business: Nothing in United States patent law, Deepsouth urged=
, stopped it from making in the United States the parts of its deveiner, as=
 opposed to themachine itself, and selling those parts to foreign buyers fo=
r assembly and use abroad. Id., at 522=96524.1 We agreed.

=97=97=97=97=97=97
1 Deepsouth shipped its deveining equipment "to foreign customers in three =
separate boxes, each containing only parts of the 1=BE-ton machines, yet th=
e whole [was] assemblable in less than one hour." Deepsouth Packing Co. v. =
Laitram Corp., 406 U. S. 518, 524 (1972).
=97=97=97=97=97=97

Interpreting our patent law as then written, we reiter-ated in Deepsouth th=
at it was "not an infringement to make or use a patented product outside of=
 the United States." Id., at 527; see 35 U. S. C. =A7271(a) (1970 ed.) ("[W=
]hoever without authority makes, uses or sells any patented invention, with=
in the United States during the term of the patent therefor, infringes the =
patent."). Deep-south's foreign buyers did not infringe Laitram's patent, w=
e held, because they assembled and used the deveining machines outside the =
United States. Deepsouth, we there-fore concluded, could not be charged wit=
h inducing orcontributing to an infringement. 406 U. S., at 526=96527.2 Nor=
 could Deepsouth be held liable as a direct infringer, for it did not make,=
 sell, or use the patented invention=97the fully assembled deveining machin=
e=97within the United States. The parts of the machine were not themselves =
patented, we noted, hence export of those parts, unassembled, did not rank =
as an infringement of Laitram's patent. Id., at 527=96529.

=97=97=97=97=97=97
2 See 35 U. S. C. =A7271(b) (1970 ed.) ("Whoever actively induces in-fringe=
ment of a patent shall be liable as an infringer."); =A7271(c) (rendering l=
iable as a contributory infringer anyone who sells or imports a"component" =
of a patented invention, "knowing the same to be especially made or especia=
lly adapted for use in an infringement of such patent, and not a staple art=
icle or commodity of commerce suitable for substantial non-infringing use")=
.
=97=97=97=97=97=97

Laitram had argued in Deepsouth that resistance to extension of the patent =
privilege to cover exported parts "derived from too narrow and technical an=
 interpretation of the [Patent Act]." Id., at 529. Rejecting that argument,=
 we referred to prior decisions holding that "a combination patent protects=
 only against the operable assembly of the whole and not the manufacture of=
 its parts." Id., at 528. Congress' codification of patent law, we said, si=
gnaled nointention to broaden the scope of the privilege. Id., at 530 ("Whe=
n, as here, the Constitution is permissive, the sign ofhow far Congress has=
 chosen to go can come only fromCongress."). And we again emphasized that

   "[o]ur patent system makes no claim to extraterritorial
   effect; these acts of Congress do not, and were not intended
   to, operate beyond the limits of the United States; and we
   correspondingly reject the claims of others to such control
   over our markets." Id., at 531 (quoting Brown v. Duchesne, 19
   How. 183, 195 (1857)).

Absent "a clear congressional indication of intent," we stated, courts had =
no warrant to stop the manufacture and sale of the parts of patented invent=
ions for assembly and use abroad. 406 U. S., at 532.

Focusing its attention on Deepsouth, Congress enacted =A7271(f). See Patent=
 Law Amendments Act of 1984, =A7101, 98 Stat. 3383; Fisch & Allen, The Appl=
ication of Domestic Patent Law to Exported Software: 35 U. S. C. =A7271(f),=
 25 U. Pa. J. Int'l Econ. L. 557, 565 (2004) ("Congress specifically intend=
ed =A7271(f) as a response to the Supreme Court's decision in Deepsouth").3=
 The provision expands the definition of infringement to include supplying =
from the United States a patented invention's components:

   "(1) Whoever without authority supplies or causesto be
   supplied in or from the United States all or a substantial
   portion of the components of a patented invention, where such
   components are uncombined inwhole or in part, in such manner
   as to actively induce the combination of such components
   outside of theUnited States in a manner that would infringe
   thepatent if such combination occurred within the United
   States, shall be liable as an infringer.

   "(2) Whoever without authority supplies or causesto be
   supplied in or from the United States any com-ponent of a
   patented invention that is especially madeor especially
   adapted for use in the invention and not a staple article or
   commodity of commerce suitable forsubstantial noninfringing
   use, where such componentis uncombined in whole or in part,
   knowing that such component is so made or adapted and
   intending that such component will be combined outside of the
   United States in a manner that would infringe thepatent if
   such combination occurred within the United States, shall be
   liable as an infringer." 35 U. S. C. =A7271(f).

=97=97=97=97=97=97
3 See also, e.g., Patent Law Amendments of 1984, S. Rep. No. 98=96663,pp. 2=
=963 (1984) (describing =A7271(f) as "a response to the Supreme Court's1972=
 Deepsouth decision which interpreted the patent law not to makeit infringe=
ment where the final assembly and sale is abroad"); Section-by-Section Anal=
ysis of H. R. 6286, 130 Cong. Rec. 28069 (1984) ("Thisproposal responds to =
the United States Supreme Court decision in Deepsouth . . . concerning the =
need for a legislative solution to close a loophole in [the] patent law.").
=97=97=97=97=97=97

II

Windows is designed, authored, and tested at Microsoft's Redmond, Washingto=
n, headquarters. Microsoft sells Windows to end users and computer manufact=
urers, both foreign and domestic. Purchasing manufacturersinstall the softw=
are onto the computers they sell. Microsoft sends to each of the foreign ma=
nufacturers a master version of Windows, either on a disk or via encrypted =
electronic transmission. The manufacturer uses the master version to genera=
te copies. Those copies, not the master sent by Microsoft, are installed on=
 the foreign manufacturer's computers. Once assembly is complete, the forei=
gn-made computers are sold to users abroad. App. to Pet. for Cert. 45a=9646=
a.4

=97=97=97=97=97=97
4 Microsoft also distributes Windows to foreign manufacturers indirectly, b=
y sending a master version to an authorized foreign "replicator"; the repli=
cator then makes copies and ships them to the manufacturers. App. to Pet. f=
or Cert. 45a=9646a.
=97=97=97=97=97=97

AT&T's patent ('580 patent) is for an apparatus (asrelevant here, a compute=
r) capable of digitally encodingand compressing recorded speech. Windows, t=
he partiesagree, contains software that enables a computer to proc-ess spee=
ch in the manner claimed by the '580 patent. In 2001, AT&T filed an infring=
ement suit in the United States District Court for the Southern District of=
 New York, charging Microsoft with liability for domestic and foreign insta=
llations of Windows.

Neither Windows software (e.g., in a box on the shelf) nor a computer stand=
ing alone (i.e., without Windows installed) infringes AT&T's patent. Infrin=
gement occursonly when Windows is installed on a computer, thereby renderin=
g it capable of performing as the patented speech processor. Microsoft stip=
ulated that by installing Win-dows on its own computers during the software=
 develop-ment process, it directly infringed the '580 patent.5 Micro-soft f=
urther acknowledged that by licensing copies ofWindows to manufacturers of =
computers sold in theUnited States, it induced infringement of AT&T's paten=
t.6 Id., at 42a; Brief for Petitioner 3=964; Brief for Respondent9, 19.

=97=97=97=97=97=97
5 See 35 U. S. C. =A7271(a) ("[W]hoever without authority makes, uses, offe=
rs to sell, or sells any patented invention, within the United States or im=
ports into the United States any patented invention during the term of the =
patent therefor, infringes the patent.").

6 See =A7271(b) ("Whoever actively induces infringement of a patentshall be=
 liable as an infringer.").
=97=97=97=97=97=97


Microsoft denied, however, any liability based on the master disks and elec=
tronic transmissions it dispatched to foreign manufacturers, thus joining i=
ssue with AT&T. Bysending Windows to foreign manufacturers, AT&T con-tended=
, Microsoft "supplie[d] . . . from the United States,"for "combination" abr=
oad, "components" of AT&T's pat-ented speech processor; accordingly, AT&T u=
rged, Micro-soft was liable under =A7271(f). See supra, at 5 (reproducing t=
ext of =A7271(f)). Microsoft responded that unincorporatedsoftware, because=
 it is intangible information, cannot betyped a "component" of an invention=
 under =A7271(f). In anyevent, Microsoft urged, the foreign-generated copie=
s of Windows actually installed abroad were not "supplie[d] . . . from the =
United States." Rejecting these responses, the District Court held Microsof=
t liable under =A7271(f). 71 USPQ 2d 1118 (SDNY 2004). On appeal, a divided=
 panel of the Court of Appeals for the Federal Circuit affirmed.414 F. 3d 1=
366 (2005). We granted certiorari, 549 U. S.___ (2006), and now reverse.

III

A

This case poses two questions: First, when, or in whatform, does software q=
ualify as a "component" under=A7271(f)? Second, were "components" of the fo=
reign-made computers involved in this case "supplie[d]" by Microsoft"from t=
he United States"?7

=97=97=97=97=97=97
7 The record leaves unclear which paragraph of =A7271(f) AT&T's claim invok=
es. While there are differences between =A7271(f)(1) and (f)(2), see, e.g.,=
 infra, at 18, n. 18, the parties do not suggest that those differences are=
 outcome determinative. Cf. infra, at 14=9615, n. 16 (explaining whyboth pa=
ragraphs yield the same result). For clarity's sake, we focus our analysis =
on the text of =A7271(f)(1).
=97=97=97=97=97=97

As to the first question, no one in this litigation argues that software ca=
n never rank as a "component" under =A7271(f). The parties disagree, howeve=
r, over the stage at which software becomes a component. Software, the "set=
 of instructions, known as code, that directs a computer to perform specifi=
ed functions or operations," Fantasy Sports Properties, Inc. v. Sportsline.=
com, Inc., 287 F. 3d 1108, 1118 (CA Fed. 2002), can be conceptualized in (a=
t least) two ways. One can speak of software in the abstract: the instructi=
ons themselves detached from any medium. (An analogy: The notes of Beethove=
n's Ninth Symphony.) One can alternatively envision a tangible "copy" of so=
ftware,the instructions encoded on a medium such as a CD-ROM. (Sheet music =
for Beethoven's Ninth.) AT&T argues thatsoftware in the abstract, not simpl=
y a particular copy ofsoftware, qualifies as a "component" under =A7271(f).=
 Micro-soft and the United States argue that only a copy of soft-ware, not =
software in the abstract, can be a component.8

=97=97=97=97=97=97
8 Microsoft and the United States stress that to count as a component, the =
copy of software must be expressed as "object code." "Software in the form =
in which it is written and understood by humans is called 'source code.' To=
 be functional, however, software must be converted (or 'compiled') into it=
s machine-usable version," a sequence of binary number instructions typed "=
object code." Brief for United States as Amicus Curiae 4, n. 1; 71 USPQ 2d =
1118, 1119, n. 5 (SDNY 2004)(recounting Microsoft's description of the soft=
ware development proc-ess). It is stipulated that object code was on the ma=
ster disks andelectronic transmissions Microsoft dispatched from the United=
 States.
=97=97=97=97=97=97

The significance of these diverse views becomes appar-ent when we turn to t=
he second question: Were compo-nents of the foreign-made computers involved=
 in this case "supplie[d]" by Microsoft "from the United States"? If the re=
levant components are the copies of Windows actually installed on the forei=
gn computers, AT&T could not per-suasively argue that those components, tho=
ugh generated abroad, were "supplie[d] . . . from the United States" as =A7=
271(f) requires for liability to attach.9 If, on the other hand, Windows in=
 the abstract qualifies as a component within =A7271(f)'s compass, it would=
 not matter that the master copies of Windows software dispatched from theU=
nited States were not themselves installed abroad as working parts of the f=
oreign computers.10 With this explanation of the relationship between the t=
wo questions in view, we further consider the twin inquiries.

=97=97=97=97=97=97
9 On this view of "component," the copies of Windows on the masterdisks and=
 electronic transmissions that Microsoft sent from the United States could =
not themselves serve as a basis for liability, because thosecopies were not=
 installed on the foreign manufacturers' computers. See =A7271(f)(1) (encom=
passing only those components "combin[ed] . . . outside of the United State=
s in a manner that would infringe the patent if such combination occurred w=
ithin the United States").

10 The Federal Circuit panel in this case, relying on that court's prior de=
cision in Eolas Technologies Inc. v. Microsoft Corp., 399 F. 3d 1325 (2005)=
, held that software qualifies as a component under =A7271(f). We are unabl=
e to determine, however, whether the Federal Circuit panelsregarded as a co=
mponent software in the abstract, or a copy of software.
=97=97=97=97=97=97

B

First, when, or in what form, does software become a "component" under =A72=
71(f)? We construe =A7271(f)'s terms "in accordance with [their] ordinary o=
r natural meaning." FDIC v. Meyer, 510 U. S. 471, 476 (1994). Section 271(f=
) applies to the supply abroad of the "components of a pat-ented invention,=
 where such components are uncombined in whole or in part, in such manner a=
s to actively induce the combination of such components." =A7271(f)(1) (emp=
hasisadded). The provision thus applies only to "such compo-nents"11 as are=
 combined to form the "patented invention"at issue. The patented invention =
here is AT&T's speech-processing computer.

=97=97=97=97=97=97
11 "Component" is commonly defined as "a constituent part," "element," or "=
ingredient." Webster's Third New International Dictionary of the English La=
nguage 466 (1981).
=97=97=97=97=97=97

Until it is expressed as a computer-readable "copy," e.g., on a CD-ROM, Win=
dows software=97indeed any software detached from an activating medium=97re=
mains uncombinable. It cannot be inserted into a CD-ROM drive or downloaded=
 from the Internet; it cannot be installed or executed on a computer. Abstr=
act software code is an idea without physical embodiment, and as such, it d=
oes not match =A7271(f)'s categorization: "components" amenable to "combina=
tion." Windows abstracted from a tangible copy no doubt is information =97-=
 a detailed set of instructions =97- and thus might be compared to a bluepr=
int (or anything containing design information, e.g., a schematic, template=
, or prototype). A blueprint may contain precise instructions for the const=
ruction and combination of the components of a patented device, but it is n=
ot itself a combinablecomponent of that device. AT&T and its amici do not s=
uggest otherwise. Cf. Pellegrini v. Analog Devices, Inc., 375 F. 3d 1113, 1=
117=961119 (CA Fed. 2004) (transmission abroad of instructions for producti=
on of patented computerchips not covered by =A7271(f)).

AT&T urges that software, at least when expressed as machine-readable objec=
t code, is distinguishable from design information presented in a blueprint=
. Software, unlike a blueprint, is "modular"; it is a stand-alone product d=
eveloped and marketed "for use on many different types of computer hardware=
 and in conjunction with many other types of software." Brief for Responden=
t 5; Tr. of Oral Arg. 46. Software's modularity persists even after install=
ation; it can be updated or removed (deleted) without affecting the hardwar=
e on which it is installed. Ibid. Software, unlike a blueprint, is also "dy=
namic." Tr. of Oral Arg. 46. After a device has been built according to a b=
lueprint's instructions, the blueprint's work is done (as AT&T puts it, the=
 blueprint's instructions have been "exhausted," ibid.). Software's instruc=
tions, in contrast, are contained in and continuously performed by a comput=
er. Brief for Respondent 27=9628; Tr. of Oral Arg. 46. See also Eolas Techn=
ologies Inc. v. Microsoft Corp., 399 F. 3d 1325, 1339 (CA Fed. 2005) ("[S]o=
ftware code . . . drives the functional nucleus of the finished computer pr=
oduct." (quoting Im-agexpo, L. L. C. v. Microsoft Corp., 299 F. Supp. 2d 55=
0, 553 (ED Va. 2003))).

The distinctions advanced by AT&T do not persuade us to characterize softwa=
re, uncoupled from a medium, as a combinable component. Blueprints too, or =
any design information for that matter, can be independently developed, bou=
ght, and sold. If the point of AT&T's argument is that we do not see bluepr=
ints lining stores' shelves, the same observation may be made about softwar=
e in the abstract: What retailers sell, and consumers buy, are copies of so=
ftware. Likewise, before software can be contained in and continuously perf=
ormed by a computer, before it can be updated or deleted, an actual,physica=
l copy of the software must be delivered by CD-ROM or some other means capa=
ble of interfacing with the computer.12

=97=97=97=97=97=97
12 The dissent, embracing AT&T's argument, contends that, "unlike a bluepri=
nt that merely instructs a user how to do something, software actually caus=
es infringing conduct to occur." Post, at 3 (STEVENS, J., dissenting). We h=
ave emphasized, however, that Windows can "caus[e] infringing conduct to oc=
cur"=97i.e., function as part of AT&T's speech-processing computer=97only w=
hen expressed as a computer-readable copy. Abstracted from a usable copy, W=
indows code is intangible, uncombinable information, more like notes of mus=
ic in the head of a composer than "a roller that causes a player piano to p=
roduce sound." Ibid.
=97=97=97=97=97=97

Because it is so easy to encode software's instructionsonto a medium that c=
an be read by a computer, AT&T intimates, that extra step should not play a=
 decisive role under =A7271(f). But the extra step is what renders the soft=
ware a usable, combinable part of a computer; easy ornot, the copy-producin=
g step is essential. Moreover, many tools may be used easily and inexpensiv=
ely to generate theparts of a device. A machine for making sprockets mightb=
e used by a manufacturer to produce tens of thousands ofsprockets an hour. =
That does not make the machine a "component" of the tens of thousands of de=
vices in whichthe sprockets are incorporated, at least not under any ordina=
ry understanding of the term "component." Congress, of course, might have i=
ncluded within =A7271(f)'s compass, for example, not only combinable "compo=
nents" of a patented invention, but also "information, instruc-tions, or to=
ols from which those components readily may be generated." It did not. In s=
um, a copy of Windows, not Windows in the abstract, qualifies as a "compone=
nt" under =A7271(f).13

=97=97=97=97=97=97
13 We need not address whether software in the abstract, or any other intan=
gible, can ever be a component under =A7271(f). If an intangible method or =
process, for instance, qualifies as a "patented invention" under =A7271(f) =
(a question as to which we express no opinion), the combinable components o=
f that invention might be intangible as well. The invention before us, howe=
ver, AT&T's speech-processing computer, is a tangible thing.
=97=97=97=97=97=97

C

The next question, has Microsoft "supplie[d] . . . from the United States" =
components of the computers here involved? Under a conventional reading of =
=A7271(f)'s text,the answer would be "No," for the foreign-made copies of W=
indows actually installed on the computers were "sup-plie[d]" from places o=
utside the United States. The Fed-eral Circuit majority concluded, however,=
 that "for soft-ware 'components,' the act of copying is subsumed in the ac=
t of 'supplying.'" 414 F. 3d, at 1370. A master sent abroad, the majority o=
bserved, differs not at all from theexact copies, easily, inexpensively, an=
d swiftly generated from the master; hence "sending a single copy abroad wi=
th the intent that it be replicated invokes =A7271(f) liability for th[e] f=
oreign-made copies." Ibid.; cf. post, at 2 (STEVENS, J., dissenting) ("[A] =
master disk is the functional equiva-lent of a warehouse of components . . =
. that Microsoft fully expects to be incorporated into foreign-manufactured=
 computers.").

Judge Rader, dissenting, noted that "supplying" is ordinarily understood to=
 mean an activity separate and distinct from any subsequent "copying, repli=
cating, or reproducing=97in effect manufacturing." 414 F. 3d, at 1372=96137=
3 (internal quotation marks omitted); see id., at 1373 ("[C]opying and supp=
lying are separate acts with different consequences=97particularly when the=
 'supplying' occurs inthe United States and the copying occurs in Dusseldor=
f or Tokyo. As a matter of logic, one cannot supply one hundred components =
of a patented invention without first making one hundred copies of the comp=
onent . . . ."). He further observed: "The only true difference between mak=
-ing and supplying software components and physical components [of other pa=
tented inventions] is that copies ofsoftware components are easier to make =
and transport." Id., at 1374. But nothing in =A7271(f)'s text, Judge Rader =
maintained, renders ease of copying a relevant, no lessdecisive, factor in =
triggering liability for infringement. See ibid. We agree.

Section 271(f) prohibits the supply of components "from the United States .=
 . . in such manner as to actively induce the combination of such component=
s." =A7271(f)(1) (emphasis added). Under this formulation, the very compone=
nts supplied from the United States, and not copies thereof, trigger =A7271=
(f) liability when combined abroad to form the patented invention at issue.=
 Here, as we have repeatedly noted, see supra, at 1=962, 5=966, the copies =
of Windows actually installed on the foreign computers were not themselves =
supplied from the United States.14 Indeed, those copies did not exist until=
 they were generated by third parties outside the United States.15 Copying =
software abroad, all might agree, is indeed easy and inexpensive. But the s=
ame could be said of other items: "Keys or machine parts might be copied fr=
om a master; chemical or biological substances might be created by reproduc=
tion; and paper products might be made by electronic copying and printing."=
 Brief for United States as Amicus Curiae 24. See also supra, at 11=9612 (r=
ejecting argument similarly based on ease of copying in construing "compone=
nt").Section 271(f) contains no instruction to gauge when du-plication is e=
asy and cheap enough to deem a copy in factmade abroad nevertheless "suppli=
e[d] . . . from the UnitedStates." The absence of anything addressing copyi=
ng inthe statutory text weighs against a judicial determination that replic=
ation abroad of a master dispatched from the United States "supplies" the f=
oreign-made copies from the United States within the intendment of =A7271(f=
).16

=97=97=97=97=97=97
14 In a footnote, Microsoft suggests that even a disk shipped from the Unit=
ed States, and used to install Windows directly on a foreign com-puter, wou=
ld not give rise to liability under =A7271(f) if the disk were removed afte=
r installation. See Brief for Petitioner 37, n. 11; cf. post, at 2=964 (ALI=
TO, J., concurring). We need not and do not reach that issue here.

15 The dissent analogizes Microsoft's supply of master versions of Windows =
abroad to "the export of an inventory of . . . knives to be warehoused unti=
l used to complete the assembly of an infringing machine." Post, at 2. But =
as we have underscored, foreign-made copiesof Windows, not the masters Micr=
osoft dispatched from the United States, were installed on the computers he=
re involved. A more aptanalogy, therefore, would be the export of knives fo=
r copying abroad, with the foreign-made copies "warehoused until used to co=
mplete the assembly of an infringing machine." Ibid. Without stretching =A7=
271(f) beyond the text Congress composed, a copy made entirely abroad does =
not fit the description "supplie[d] . . . from the United States."

16 Our analysis, while focusing on =A7271(f)(1), is equally applicable to =
=A7271(f)(2). But cf. post, at 1 (STEVENS, J., dissenting) (asserting "para=
-graph (2) . . . best supports AT&T's position here"). While the two paragr=
aphs differ, among other things, on the quantity of components that must be=
 "supplie[d] . . . from the United States" for liability to attach, see inf=
ra, at 18, n. 18, that distinction does not affect our analysis. Paragraph =
(2), like (1), covers only a "component" amenableto "combination." =A7271(f=
)(2); see supra, at 9=9612 (explaining why Windows in the abstract is not a=
 combinable component). Paragraph (2), like (1), encompasses only the "[s]u=
ppl[y] . . . from the United States" of"such [a] component" as will itself =
"be combined outside of the United States." =A7271(f)(2); see supra, at 12=
=9613 and this page (observing that foreign-made copies of Windows installe=
d on computers abroad were not "supplie[d] . . . from the United States"). =
It is thus unsurprising that AT&T does not join the dissent in suggesting t=
hat the outcome might turn on whether we view the case under paragraph (1) =
or (2).
=97=97=97=97=97=97

D

Any doubt that Microsoft's conduct falls outside =A7271(f)'scompass would b=
e resolved by the presumption against extraterritoriality, on which we have=
 already touched. See supra, at 2, 4. The presumption that United States la=
wgoverns domestically but does not rule the world applieswith particular fo=
rce in patent law. The traditional un-derstanding that our patent law "oper=
ate[s] only domesti-cally and d[oes] not extend to foreign activities," Fis=
ch & Allen, supra, at 559, is embedded in the Patent Act itself, which prov=
ides that a patent confers exclusive rights in aninvention within the Unite=
d States. 35 U. S. C. =A7154(a)(1) (patentee's rights over invention apply =
to manufacture, use, or sale "throughout the United States" and to impor-ta=
tion "into the United States"). See Deepsouth, 406 U. S., at 531 ("Our pate=
nt system makes no claim to extraterri-torial effect"; our legislation "d[o=
es] not, and [was] notintended to, operate beyond the limits of the United =
States, and we correspondingly reject the claims of others to such control =
over our markets." (quoting Brown, 19 How., at 195)).

As a principle of general application, moreover, we have stated that courts=
 should "assume that legislators takeaccount of the legitimate sovereign in=
terests of othernations when they write American laws." F. Hoffmann-La Roch=
e Ltd v. Empagran S. A., 542 U. S. 155, 164 (2004); see EEOC v. Arabian Ame=
rican Oil Co., 499 U. S. 244, 248 (1991). Thus, the United States accuratel=
y conveyed inthis case: "Foreign conduct is [generally] the domain of forei=
gn law," and in the area here involved, in particular,foreign law "may embo=
dy different policy judgments aboutthe relative rights of inventors, compet=
itors, and the public in patented inventions." Brief for United States as A=
micus Curiae 28. Applied to this case, the presumptiontugs strongly against=
 construction of =A7271(f) to encompass as a "component" not only a physica=
l copy of software, but also software's intangible code, and to render "sup=
plie[d]. . . from the United States" not only exported copies of software, =
but also duplicates made abroad.

AT&T argues that the presumption is inapplicable because Congress enacted =
=A7271(f) specifically to extend the reach of United States patent law to c=
over certain activityabroad. But as this Court has explained, "the presump-=
tion is not defeated . . . just because [a statute] specificallyaddresses [=
an] issue of extraterritorial application," Smith v. United States, 507 U. =
S. 197, 204 (1993); it remains instructive in determining the extent of the=
 statutoryexception. See Empagran, 542 U. S., at 161=96162, 164=96165; Smit=
h, 507 U. S., at 204.

AT&T alternately contends that the presumption holds no sway here given tha=
t =A7271(f), by its terms, applies only to domestic conduct, i.e., to the s=
upply of a patented invention's components "from the United States." =A7271=
(f)(1). AT&T's reading, however, "converts a single act of supply from the =
United States into a springboard for liability each time a copy of the soft=
ware is subsequently made [abroad] and combined with computer hardware [abr=
oad] for sale [abroad.]" Brief for United States as Amicus Curiae 29; see 4=
14 F. 3d, at 1373, 1375 (Rader, J., dissenting). In short, foreign law alon=
e, not United States law, currently governs the manufacture and sale of com=
ponentsof patented inventions in foreign countries. If AT&T desires to prev=
ent copying in foreign countries, its remedytoday lies in obtaining and enf=
orcing foreign patents. See Deepsouth, 406 U. S., at 531. 17

IV

AT&T urges that reading =A7271(f) to cover only those copies of software ac=
tually dispatched from the United States creates a "loophole" for software =
makers. Liabilityfor infringing a United States patent could be avoided, as=
Microsoft's practice shows, by an easily arranged circum-vention: Instead o=
f making installation copies of software in the United States, the copies c=
an be made abroad, swiftly and at small cost, by generating them from a mas=
-ter supplied from the United States. The Federal Circuit majority found AT=
&T's plea compelling:

   "Were we to hold that Microsoft's supply by exportation of the
   master versions of the Windows=AE software =97- specifically for
   the purpose of foreign replication =97- avoids infringement, we
   would be subverting the remedial nature of =A7271(f), permitting
   a technical avoidance of the statute by ignoring the advances
   in a field of technology -=97 and its associated industry
   practices -=97 that developed after the enactment of =A7271(f). .
   . . Section =A7271(f), if it is to remain effective, must
   therefore be interpreted in a manner that is appropriate to
   the nature of the technology at issue."414 F. 3d, at 1371.

While the majority's concern is understandable, we are not persuaded that d=
ynamic judicial interpretation of =A7271(f) is in order. The "loophole," in=
 our judgment, is properly left for Congress to consider, and to close if i=
t finds suchaction warranted.

There is no dispute, we note again, that =A7271(f) is inapplicable to the e=
xport of design tools=97blueprints, schematics, templates, and prototypes -=
=97 all of which may provide the information required to construct and comb=
ine overseas the components of inventions patented under United States law.=
 See supra, at 10=9612. We have no license to attribute to Congress an unst=
ated intention to place the information Microsoft dispatched from the Unite=
d Statesin a separate category.

=97=97=97=97=97=97
17 AT&T has secured patents for its speech processor in Canada,France, Germ=
any, Great Britain, Japan, and Sweden. App. in No. 04=961285 (CA Fed.), p. =
1477. AT&T and its amici do not relate what protec-tions and remedies are, =
or are not, available under these foreign re-gimes. Cf. Brief for Responden=
t 46 (observing that "foreign patentprotections are sometimes weaker than t=
heir U. S. counterparts" (emphasis added)).
=97=97=97=97=97=97

Section 271(f) was a direct response to a gap in our patent law revealed by=
 this Court's Deepsouth decision. See supra, at 4, and n. 3. The facts of t=
hat case were undeniably at the fore when =A7271(f) was in the congressiona=
l hopper. In Deepsouth, the items exported were kits containing all the phy=
sical, readily assemblable parts of a shrimp deveining machine (not an inta=
ngible set of instructions), and those parts themselves (not foreign-made c=
opies of them) would be combined abroad by foreign buyers. Having attended =
to the gap made evident in Deepsouth, Congress did not address other arguab=
le gaps: Section 271(f) does not identify as an infringing act con-duct in =
the United States that facilitates making a compo-nent of a patented invent=
ion outside the United States; nor does the provision check "suppl[ying] . =
. . from the United States" information, instructions, or other materi-als =
needed to make copies abroad.18 Given that Congressdid not home in on the l=
oophole AT&T describes, and inview of the expanded extraterritorial thrust =
AT&T's read-ing of =A7271(f) entails, our precedent leads us to leave in Co=
ngress' court the patent-protective determination AT&T seeks. Cf. Sony Corp=
. of America v. Universal City Stu-dios, Inc., 464 U. S. 417, 431 (1984) ("=
In a case like this, inwhich Congress has not plainly marked our course, we=
must be circumspect in construing the scope of rights created by a legislat=
ive enactment which never contem-plated =09such a calculus of interests.").

=97=97=97=97=97=97
18 Section 271(f)'s text does, in one respect, reach past the facts of Deep=
south. While Deepsouth exported kits containing all the parts of its devein=
ing machines, =A7271(f)(1) applies to the supply abroad of "all or a substa=
ntial portion of" a patented invention's components. And =A7271(f)(2) appli=
es to the export of even a single component if it is"especially made or esp=
ecially adapted for use in the invention and nota staple article or commodi=
ty of commerce suitable for substantial noninfringing use."
=97=97=97=97=97=97

Congress is doubtless aware of the ease with which software (and other elec=
tronic media) can be copied, and has not left the matter untouched. In 1998=
, Congress addressed "the ease with which pirates could copy and distribute=
 a copyrightable work in digital form." Universal City Studios, Inc. v. Cor=
ley, 273 F. 3d 429, 435 (CA2 2001). The resulting measure, the Digital Mill=
ennium Copyright Act, 17 U. S. C. =A71201 et seq., "backed with legal sanct=
ions the efforts of copyright owners to protect their works from piracy beh=
ind digital walls such as encryption codes or password protections." Univer=
sal City Studios, 273 F. 3d, at 435. If the patent law is to be adjusted be=
tter "to ac-count for the realities of software distribution," 414 F. 3d, a=
t 1370, the alteration should be made after focused legis-lative considerat=
ion, and not by the Judiciary forecasting Congress' likely disposition.

* * *

For the reasons stated, the judgment of the Court ofAppeals for the Federal=
 Circuit is Reversed.

THE CHIEF JUSTICE took no part in the consideration or decision of this cas=
e.

_________________

_________________

ALITO, J., concurring in part

SUPREME COURT OF THE UNITED STATES

No. 05=961056

MICROSOFT CORPORATION, PETITIONER v.
AT&T CORP.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT

[April 30, 2007]

JUSTICE ALITO, with whom JUSTICE THOMAS and JUSTICE BREYER join, concurring=
 as to all but footnote 14.

I agree with the Court that no "component[s]" of theforeign-made computers =
involved in this case were "sup-plie[d]" by Microsoft "from the United Stat=
es." 35 U. S. C. =A7271(f)(1). I write separately because I reach this conc=
lu-sion through somewhat different reasoning.

I

Computer programmers typically write programs in a "human readable" program=
ming language. This "'source code'" is then generally converted by the comp=
uter into a "machine readable code" or "machine language" expressed in a bi=
nary format. Brief for Respondent 5, n. 1 (citing R. White, How Computers W=
ork 87, 94 (8th ed. 2006)); E.Walters, Essential Guide to Computing 204=962=
05 (2001). During the Windows writing process, the program existsin the for=
m of machine readable code on the magnetic tape fields of Microsoft's compu=
ters' hard drives. White, supra, at 144=96145; Walters, supra, at 54=9655.

When Microsoft finishes writing its Windows programin the United States, it=
 encodes Windows onto CD-ROMs known as "'golden masters'" in the form of ma=
chine read-able code. App. 31, =B64. This is done by engraving eachdisk in =
a specific way such that another computer can read the engravings, understa=
nd what they mean, and writethe code onto the magnetic fields of its hard d=
rive. Ibid.; Brief for Petitioner 4, n. 2.

Microsoft ships these disks (or sends the code via elec-tronic transmission=
) abroad, where the code is copied ontoother disks that are then placed int=
o foreign-made com-puters for purposes of installing the Windows program. A=
pp. 31=9632, =B6=B65=968. No physical aspect of a Windows CD-ROM=97original=
 disk or copy=97is ever incorporated into the computer itself. See Stenogra=
ph L. L. C. v. Bossard As-socs., Inc., 144 F. 3d 96, 100 (CADC 1998) (notin=
g that, within the context of the Copyright Act, "installation of software =
onto a computer results in 'copying'"); White, supra, at 144=96145, 172=961=
73. The intact CD-ROM is then removed and may be discarded without affectin=
g the computer's implementation of the code.* The parties agree for purpose=
s of this litigation that a foreign-made computer containing the Windows co=
de would violate AT&T's patent if present in the United States. Pet. for Ce=
rt. 42a, =B65.

II

A

I agree with the Court that a component of a machine,whether a shrimp devei=
ner or a personal computer, must be something physical. Ante, at 9=9611. Th=
is is because the word "component," when concerning a physical device, is m=
ost naturally read to mean a physical part of the device. See Webster's Thi=
rd New International Dictionary 466 (1976) (component is a "constituent par=
t: INGREDIENT"); Random House Dictionary of the English Language 301 (1967)=
 (component is "a component part; constituent"). Furthermore, =A7271(f) req=
uires that the component be "combined" with other components to form the in=
fringing device, meaning that the component must remain a part of the devic=
e. Webster's, supra, at 452 (combine means "to join in physical or chemical=
 union"; "to become one"; "to unite into a chemical compound"); Random Hous=
e, supra,at 293 (combine means "to bring or join into a close union or whol=
e"). For these reasons, I agree with the Court that a set of instructions o=
n how to build an infringing device, or even a template of the device, does=
 not qualify as a component. Ante, at 9=9610.

=97=97=97=97=97=97
* In a sense, the whole process is akin to an author living prior to the ex=
istence of the printing press, who created a story in his mind, wrote a man=
uscript, and sent it to a scrivener, who in turn copied the story by hand i=
nto a blank book.
=97=97=97=97=97=97

B

As the parties agree, an inventor can patent a machine that carries out a c=
ertain process, and a computer mayconstitute such a machine when it execute=
s commands=97 given to it by code=97that allow it to carry out that process=
. Such a computer would not become an infringing device until enough of the=
 code is installed on the computer to allow it to execute the process in qu=
estion. The computer would not be an infringing device prior to the install=
ation, or even during the installation. And the computer re-mains an infrin=
ging device after the installation processbecause, even though the original=
 installation device (such as a CD-ROM) has been removed from the computer,=
 the code remains on the hard drive.

III

Here, Windows software originating in the United States was sent abroad, wh=
ether on a master disk or bymeans of an electronic transmission, and eventu=
ally cop-ied onto the hard drives of the foreign-made computers.Once the co=
pying process was completed, the Windows program was recorded in a physical=
 form, i.e., in magneticfields on the computers' hard drives. See Brief for=
 Re-spondent 5. The physical form of the Windows program on the master disk=
, i.e., the engravings on the CD-ROM,remained on the disk in a form unchang=
ed by the copying process. See Brief for Petitioner 4, n. 2 (citing White, =
How Computers Work, at 144=96145, 172=96173). There is nothing in the recor=
d to suggest that any physical part of the diskbecame a physical part of th=
e foreign-made computer, and such an occurrence would be contrary to the ge=
neral work-ings of computers.Because no physical object originating in the =
United States was combined with these computers, there was noviolation of =
=A7271(f). Accordingly, it is irrelevant that theWindows software was not c=
opied onto the foreign-made computers directly from the master disk or from=
 an elec-tronic transmission that originated in the United States.To be sur=
e, if these computers could not run Windowswithout inserting and keeping a =
CD-ROM in the appropri-ate drive, then the CD-ROMs might be components of t=
he computer. But that is not the case here.

* * *

Because the physical incarnation of code on the Win-dows CD-ROM supplied fr=
om the United States is not a"component" of an infringing device under =A72=
71(f), it logi-cally follows that a copy of such a CD-ROM also is not a com=
ponent. For this reason, I join the Court's opinion,except for footnote 14.

_________________

_________________

JUSTICE STEVENS, dissenting

SUPREME COURT OF THE UNITED STATES

No. 05=961056

MICROSOFT CORPORATION, PETITIONER v.
AT&T CORP.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT

[April 30, 2007]

JUSTICE STEVENS, dissenting.

As the Court acknowledges, "[p]lausible arguments canbe made for and agains=
t extending =A7271(f) to the conduct charged in this case as infringing AT&=
T's patent." Ante, at 2. Strong policy considerations, buttressed by the pr=
esumption against the application of domestic patentlaw in foreign markets,=
 support Microsoft Corporation's position. I am, however, persuaded that an=
 affirmanceof the Court of Appeals' judgment is more faithful tothe intent =
of the Congress that enacted =A7271(f) than a reversal.

The provision was a response to our decision in Deep-south Packing Co. v. L=
aitram Corp., 406 U. S. 518 (1972), holding that a patent on a shrimp devei=
ning machine had not been infringed by the export of components for assem-b=
ly abroad. Paragraph (1) of =A7271(f) would have been sufficient on its own=
 to overrule Deepsouth,* but it is paragraph (2) that best supports AT&T's =
position here. It provides:

   "Whoever without authority supplies or causes to be supplied
   in or from the United States any componentof a patented
   invention that is especially made or es-pecially adapted for
   use in the invention and not astaple article or commodity of
   commerce suitable forsubstantial noninfringing use, where such
   componentis uncombined in whole or in part, knowing that such
   component is so made or adapted and intending that such
   component will be combined outside of the United States in a
   manner that would infringe thepatent if such combination
   occurred within the United States, shall be liable as an
   infringer." =A7271(f)(2).

=97=97=97=97=97=97
* "Whoever without authority supplies or causes to be supplied in orfrom th=
e United States all or a substantial portion of the components ofa patented=
 invention, where such components are uncombined in whole or in part, in su=
ch manner as to actively induce the combination of suchcomponents outside o=
f the United States in a manner that would infringe the patent if such comb=
ination occurred within the United States, shall be liable as an infringer.=
" 35 U. S. C. =A7271(f)(1).
=97=97=97=97=97=97

Under this provision, the export of a specially designed knife that has no =
use other than as a part of a patented deveining machine would constitute i=
nfringement. It follows that =A7271(f)(2) would cover the export of an inve=
n-tory of such knives to be warehoused until used to com-plete the assembly=
 of an infringing machine.

The relevant component in this case is not a physicalitem like a knife. Bot=
h Microsoft and the Court think that means it cannot be a "component." See =
ante, at 10. But if a disk with software inscribed on it is a "component," =
I find it difficult to understand why the most importantingredient of that =
component is not also a component. Indeed, the master disk is the functiona=
l equivalent of a warehouse of components=97components that Microsoftfully =
expects to be incorporated into foreign-manufactured computers. Put somewha=
t differently: On the Court's view, Microsoft could be liable under =A7271(=
f) only if it sends individual copies of its software directly from the Uni=
ted States with the intent that each copy would be incorporated into a sepa=
rate infringing computer. But it seems to me that an indirect transmission =
via a master disk warehouse is likewise covered by =A7271(f).

I disagree with the Court's suggestion that because software is analogous t=
o an abstract set of instructions, itcannot be regarded as a "component" wi=
thin the meaning of =A7271(f). See ante, at 9=9610. Whether attached or de-=
tached from any medium, software plainly satisfies the dictionary definitio=
n of that word. See ante, at 9, n. 11 (observing that "'[c]omponent' is com=
monly defined as 'aconstituent part,' 'element,' or 'ingredient'"). And unl=
ike a blueprint that merely instructs a user how to do some-thing, software=
 actually causes infringing conduct to occur.It is more like a roller that =
causes a player piano to pro-duce sound than sheet music that tells a piani=
st what todo. Moreover, it is surely not "a staple article or commod-ity of=
 commerce suitable for substantial noninfringing use" as that term is used =
in =A7271(f)(2). On the contrary, its sole intended use is an infringing us=
e.

I would therefore affirm the judgment of the Court of Appeals.
--