There are two major patent decisions from the US Supreme Court today, and here they are, both PDFs: We can read them together, but it looks from media coverage like the patent world as we know it has just changed. For the better. Update: Here's the transcript [PDF] of oral argument in the Microsoft case, and here's the transcript [PDF] for KSR. You can now also read the ruling in KSR in HTML on Google Scholar and the Microsoft decision on Cornell University School of Law's Legal Information Institute's site, as well as below, on Groklaw.
Here are some news stories for context from Bloomberg. A bit more from Reuters and Law.com: Steve Maebius of Foley & Lardner said the wording of the decision suggests the high court "wanted to avoid a radical upsetting of the apple cart." But the decision will have a "really broad impact," because in the trade-off between flexibility and predictability, "the Court chose flexibility."
The new case-by-case approach "could increase litigation and the cost of obtaining a patent in the first place," Maebius says, because patent examiners will now feel freer to reject patent applications on obviousness grounds.
Rachel Krevans of Morrison & Foerster said in a statement, "The new test for obviousness, which will apply to challenges to patent validity regardless of whether the patent was issued before or after the KSR decision, may also impair the value of previously issued U.S. patents, because it makes it easier to challenge them in litigation, and to ask the patent office to reconsider the decision to issue the patent." You may recall that the Software Freedom Law Center filed an amicus brief with the court in support of Microsoft in the Microsoft v. AT&T case, so I'm very excited to read the decision. Dennis Crouch of Patently-O explained a bit about the AT&T patent back in 2005. His headline today is: Supreme Court Retracts Patent Protection: KSR v. Teleflex, 550 U. S. ____ (2007): In a unanimous opinion authored by Justice Kennedy, the Supreme Court held that the Federal Circuit's "narrow" & "rigid" TSM test is not the proper application of the nonobviousness doctrine of Section 103(a) of the Patent Act. The Microsoft decision was 7-1, with Justice Stevens dissenting. And here's the page, for your bookmarks, where you can always get the most recent Supreme Court decisions. We have it on Groklaw's permanent Legal Research page, if you prefer. Update: We have both decisions as text now. First, the KSR and then the Microsoft decisions. I've placed a double row of stars to mark the end of KSR.
My thanks to Groklaw member Mad Scientist for doing the OCR so quickly. Keep in mind that this is not an official text. It is my effort to make the decisions available quickly for keyword searching and so those who depend on readers can follow along easily. For anything official, you will have to go by the PDFs from the court.
In KSR Int'l Co. v. Teleflex Inc., the standout paragraph to me is this one: We build and create by bringing to the tangible and palpable reality around us
new works based on instinct, simple logic, ordinary inferences, extraordinary
ideas, and sometimes even genius. These advances, once part of our
shared
knowledge, define a new threshold from which innovation starts once more. And as
progress beginning from higher levels of achievement is expected in the normal
course, the results of ordinary innovation are not the subject of exclusive
rights under the patent laws. Were it otherwise patents might stifle, rather
than promote, the progress of useful arts. See U. S. Const., Art. I, §8, cl.
8. These premises led to the bar on patents claiming obvious subject matter
established in Hotchkiss and codified in §103. Application of the bar must not
be confined within a test or formulation too constrained to serve its purpose.
The court has raised the obviousness bar, or as they probably view it put it back where the founding fathers meant it to be. That greatly increases the value, in my opinion, of the Peer to Patent Project, and I can't wait to go obviousness hunting. I also hope Novell and anyone else who signed a patent agreement with Microsoft over Linux is kicking themselves now. Do you remember the recent statement by the EU Commission, that they examined Microsoft's claimed patents in that antitrust matter, and found them not so very innovative? In acknowledging the work of its designated trustee, Dr. Neil Barrett, the EU said it examined 160 Microsoft claims to patented technologies, and concluded that among those, only four may only deserve to claim "a limited degree of innovation."
Yes, sir. I see potential here.
In the Microsoft decision, I find two points particularly of interest: In the majority opinion, this footnote catches my eye: 13 We need not address whether software in the abstract, or any other intangible, can ever be a component under §271(f). If an intangible method or process, for instance, qualifies as a “patented invention” under §271(f) (a question as to which we express no opinion), the combinable components of that invention might be intangible as well. The invention before us, however, AT&T’s speech-processing computer, is a tangible thing. If you read Justice Stevens' dissent, you will perhaps agree with me that the footnote indicates progress. Secondly, in Justice Alito's concurring opinion (except for footnote 14), in which he was joined by Justices Thomas and Breyer, he wrote something that I noted: I agree with the Court that a component of a machine, whether a shrimp deveiner or a personal computer, must be something physical.... I agree with the Court that a set of instructions on how to build an infringing device, or even a template of the device, does not qualify as a component....To be sure, if these computers could not run Windows without inserting and keeping a CD-ROM in the appropriate drive, then the CD-ROMs might be components of the computer. But that is not the case here. Naturally, I think of Knoppix and other live CDs.
Any errors in our text version are mine, although I have aimed for accuracy, so if you note any errors, tell me, not the court. The changes I made here are for the blind and those dependent on readers -- I have put footnotes at the end of each section in Microsoft instead of at the bottom of each page. And because computers are not as smart as people, I had to make Justice Stevens' dissenting opinion's one footnote a double **, because an earlier concurring decision by Justice Alito already used up the single. There is one typo in KSR and I did fix that. Those are the only changes I made on purpose, but if you see others that were inadvertent, please let me know:
**********************************************************************
Cite as: 550 U.S. ____ (2007)
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the preliminary part of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D.C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 04-1350
KSR INTERNATIONAL CO., PETITIONER v.
TELEFLEX INC. Et Al.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[April 30, 2007]
JUSTICE KENNEDY delivered the opinion of the Court.
Teleflex Incorporated and its subsidiary Technology Holding Company -- both
referred to here as Teleflex -- sued KSR International Company for patent
infringement. The patent at issue, United States Patent No. 6,237,565B1, is
entitled “Adjustable Pedal Assembly With Electronic Throttle Control.”
Supplemental App. 1. The patentee is Steven J. Engelgau, and the patent is
referred to as “the Engelgau patent.” Teleflex holds the exclusive license to
the patent.
Claim 4 of the Engelgau patent describes a mechanism for combining an electronic
sensor with an adjustable automobile pedal so the pedal’s position can be
transmitted to a computer that controls the throttle in the vehicle’s engine.
When Teleflex accused KSR of infringing the Engelgau patent by adding an
electronic sensor to one of KSR’s previously designed pedals, KSR countered that
claim 4 was invalid under the Patent Act, 35 U. S. C. §103, because its subject
matter was obvious.
Section 103 forbids issuance of a patent when “the differences between the
subject matter sought to be pat-
ented and the prior art are such that the subject
matter as a whole would have been obvious at the time the invention was made to
a person having ordinary skill in the art to which said subject matter
pertains.”
In Graham v. John Deere Co. of Kansas City, 383 U. S. 1 (1966), the Court set
out a framework for applying the statutory language of §103, language itself
based on the logic of the earlier decision in Hotchkiss v. Greenwood, 11 How.
248 (1851), and its progeny. See 383 U. S., at 15–17. The analysis is
objective:
“Under §103, the scope and content of the prior art are to be determined;
differences between the prior art and the claims at issue are to be ascertained;
and the level of ordinary skill in the pertinent art resolved. Against this
background the obviousness or nonobviousness of the subject matter is
determined. Such secondary considerations as commercial success, long felt but
unsolved needs, failure of others, etc., might be utilized to give light to the
circumstances surrounding the origin of the subject matter sought to be
patented.” Id., at 17–18.
While the sequence of these questions might be reordered in any particular case,
the factors continue to define the inquiry that controls. If a court, or patent
examiner, conducts this analysis and concludes the claimed subject matter was
obvious, the claim is invalid under §103.
Seeking to resolve the question of obviousness with more uniformity and
consistency, the Court of Appeals for the Federal Circuit has employed an
approach referred to by the parties as the “teaching, suggestion, or
motivation” test (TSM test), under which a patent claim is only proved obvious if
“some motivation or suggestion to combine the prior art teachings” can be found
in the prior art, the nature of the problem, or the knowledge of a person having
ordinary skill in the art. See, e.g., Al-Site Corp. v. VSI
Int’l, Inc., 174 F.
3d 1308, 1323–1324 (CA Fed. 1999). KSR challenges that test, or at least its
application in this case. See 119 Fed. Appx. 282, 286–290 (CA Fed. 2005).
Because the Court of Appeals addressed the question of obviousness in a manner
contrary to §103 and our precedents, we granted certiorari, 547 U. S ___ (2006).
We now reverse.
I
A
In car engines without computer-controlled throttles,the accelerator pedal
interacts with the throttle via cable or other mechanical link. The pedal arm
acts as a lever rotating around a pivot point. In a cable-actuated throttle
control the rotation caused by pushing down the pedal pulls a cable, which in
turn pulls open valves in the carburetor or fuel injection unit. The wider the
valves open, the more fuel and air are released, causing combustion to increase
and the car to accelerate. When the driver takes his foot off the pedal, the
opposite occurs as the cable is released and the valves slide closed.
In the 1990’s it became more common to install computers in cars to control
engine operation. Computer-controlled throttles open and close valves in
response to electronic signals, not through force transferred from the pedal by
a mechanical link. Constant, delicate adjustments of air and fuel mixture are
possible. The computer’s rapid processing of factors beyond the pedal’s position
improves fuel efficiency and engine performance.
For a computer-controlled throttle to respond to a driver’s operation of the
car, the computer must know what is happening with the pedal. A cable or
mechanical link does not suffice for this purpose; at some point, an electronic
sensor is necessary to translate the mechanical operation into digital data the
computer can understand.
Before discussing sensors further we turn to the me-
chanical design of the pedal
itself. In the traditional design a pedal can be pushed down or released but
cannot have its position in the footwell adjusted by sliding the pedal forward
or back. As a result, a driver who wishes to be closer or farther from the pedal
must either reposition himself in the driver’s seat or move the seat in some
way. In cars with deep footwells these are imperfect solutions for drivers of
smaller stature. To solve the problem, inventors, beginning in the 1970’s,
designed pedals that could be adjusted to change their location in the footwell.
Important for this case are two adjustable pedals disclosed in U. S. Patent Nos.
5,010,782 (filed July 28, 1989) (Asano) and 5,460,061 (filed Sept. 17, 1993)
(Redding). The Asano patent reveals a support structure that houses the pedal so
that even when the pedal location is adjusted relative to the driver, one of the
pedal’s pivot points stays fixed. The pedal is also designed so that the force
necessary to push the pedal down is the same regardless of adjustments to its
location. The Redding patent reveals a different, sliding mechanism where both
the pedal and the pivot point are adjusted.
We return to sensors. Well before Engelgau applied for his challenged patent,
some inventors had obtained patents involving electronic pedal sensors for
computer-controlled throttles. These inventions, such as the device disclosed in
U. S. Patent No. 5,241,936 (filed Sept. 9, 1991) (’936), taught that it was
preferable to detect the pedal’s position in the pedal assembly, not in the
engine. The ’936 patent disclosed a pedal with an electronic sensor on a pivot
point in the pedal assembly. U. S. Patent No. 5,063,811 (filed July 9, 1990)
(Smith) taught that to prevent the wires connecting the sensor to the computer
from chafing and wearing out, and to avoid grime and damage from the driver’s
foot, the sensor should be put on a fixed part of the pedal assembly rather than
in or on the pedal’s footpad.
In addition to patents for pedals with integrated sensors inventors obtained
patents for self-contained modular sensors. A modular sensor is designed
independently of a given pedal so that it can be taken off the shelf and
attached to mechanical pedals of various sorts, enabling the pedals to be used
in automobiles with computer-controlled throttles. One such sensor was disclosed
in U. S. Patent No. 5,385,068 (filed Dec. 18, 1992) (’068). In 1994, Chevrolet
manufactured a line of trucks using modular sensors “attached to the pedal
support bracket, adjacent to the pedal and engaged with the pivot shaft about
which the pedal rotates in operation.” 298 F. Supp. 2d 581, 589 (ED Mich.
2003).
The prior art contained patents involving the placement of sensors on adjustable
pedals as well. For example, U. S. Patent No. 5,819,593 (filed Aug. 17, 1995)
(Rixon) discloses an adjustable pedal assembly with an electronic sensor for
detecting the pedal’s position. In the Rixon pedal the sensor is located in the
pedal footpad. The Rixon pedal was known to suffer from wire chafing when the
pedal was depressed and released.
This short account of pedal and sensor technology leads to the instant case.
B
KSR, a Canadian company, manufactures and supplies auto parts, including pedal
systems. Ford Motor Company hired KSR in 1998 to supply an adjustable pedal
system for various lines of automobiles with cable-actuated throttle controls.
KSR developed an adjustable mechanical pedal for Ford and obtained U. S. Patent
No. 6,151,976 (filed July 16, 1999) (’976) for the design. In 2000, KSR was
chosen by General Motors Corporation (GMC or GM)to supply adjustable pedal
systems for Chevrolet and GMC light trucks that used engines with
computer-controlled throttles. To make the ’976 pedal compatible with the
trucks, KSR merely took that design and added a modular sensor.
Teleflex is a rival to KSR in the design and manufacture of adjustable pedals.
As noted, it is the exclusive licensee of the Engelgau patent. Engelgau filed
the patent application on August 22, 2000 as a continuation of a previous
application for U. S. Patent No. 6,109,241, which was filed on January 26, 1999.
He has sworn he invented the patent’s subject matter on February 14, 1998. The
Engelgau patent discloses an adjustable electronic pedal described in the
specification as a “simplified vehicle control pedal assembly that is less
expensive, and which uses fewer parts and is easier to package within the
vehicle.” Engelgau, col. 2, lines 2–5, Supplemental App. 6. Claim 4 of the
patent, at issue here, describes:
“A vehicle control pedal apparatus comprising:
a support adapted to be mounted
to a vehicle structure; an adjustable pedal assembly having a pedal arm moveable
in for[e] and aft directions with respect to said support;
a pivot for pivotally supporting said adjustable pedal assembly with respect to
said support and defining a pivot axis;
and an electronic control attached to
said support for controlling a vehicle system;
said apparatus characterized by said electronic control being responsive to said
pivot for providing a signal that corresponds to pedal arm position as said
pedal arm pivots about said pivot axis between rest and applied positions
wherein the position of said pivot remains constant while said pedal arm moves
in fore and aft directions with respect to said pivot.” Id., col.
6, lines 17–36,
Supplemental App. 8 (diagram numbers omitted).
We agree with the District Court that the claim discloses “a position-adjustable
pedal assembly with an electronic pedal position sensor attached to the support
member of the pedal assembly. Attaching the sensor to the support member allows
the sensor to remain in a fixed position while the driver adjusts the pedal.”
298 F. Supp. 2d, at 586–587.
Before issuing the Engelgau patent the U. S. Patent and Trademark Office (PTO)
rejected one of the patent claims that was similar to, but broader than, the
present claim 4. The claim did not include the requirement that the sensor be
placed on a fixed pivot point. The PTO concluded the claim was an obvious
combination of the prior art disclosed in Redding and Smith, explaining:
“‘Since the prior ar[t] references are from the field of endeavor, the purpose
disclosed . . . would have been recognized in the pertinent art of Redding.
Therefore it would have been obvious . . . to provide the device of Redding with
the . . . means attached to a support member as taught by Smith.’” Id., at 595.
In other words Redding provided an example of an adjustable pedal and Smith
explained how to mount a sensor on a pedal’s support structure, and the rejected
patent claim merely put these two teachings together.
Although the broader claim was rejected, claim 4 was later allowed because it
included the limitation of a fixed pivot point, which distinguished the design
from Redding’s. Ibid. Engelgau had not included Asano among the prior art
references, and Asano was not mentioned in the patent’s prosecution. Thus, the
PTO did not have before it an adjustable pedal with a fixed pivot point. The
patent issued on May 29, 2001 and was assigned to Teleflex.
Upon learning of KSR’s design for GM, Teleflex sent a
warning letter informing
KSR that its proposal would violate the Engelgau patent. “‘Teleflex believes
that any supplier of a product that combines an adjustable pedal with an
electronic throttle control necessarily employs technology covered by one or
more’” of Teleflex’s patents. Id., at 585. KSR refused to enter a royalty
arrangement with Teleflex; so Teleflex sued for infringement, asserting KSR’s
pedal infringed the Engelgau patent and two other patents. Ibid. Teleflex later
abandoned its claims regarding the other patents and dedicated the patents to
the public. The remaining contention was that KSR’s pedal system for GM
infringed claim 4 of the Engelgau patent. Teleflex has not argued that the other
three claims of the patent are infringed by KSR’s pedal, nor has Teleflex argued
that the mechanical adjustable pedal designed by KSR for Ford infringed any of
its patents.
C
The District Court granted summary judgment in KSR’s favor. After reviewing the
pertinent history of pedal design, the scope of the Engelgau patent, and the
relevant prior art, the court considered the validity of the contested claim. By
direction of 35 U. S. C. §282, an issued patent is presumed valid. The District
Court applied Graham’s framework to determine whether under summary-judgment
standards KSR had overcome the presumption and demonstrated that claim 4 was
obvious in light of the prior art in existence when the claimed subject matter
was invented. See §102(a).
The District Court determined, in light of the expert
testimony and the parties’ stipulations, that the level of ordinary skill in
pedal design was “‘an undergraduate degree in mechanical engineering (or an
equivalent amount of industry experience) [and] familiarity with pedal control
systems for vehicles.’” 298 F. Supp. 2d, at 590. The court then set forth the
relevant prior art, in-
cluding the patents and pedal designs described above.
Following Graham’s direction, the court compared the teachings of the prior art
to the claims of Engelgau. It found “little difference.” 298 F. Supp. 2d, at
590. Asano taught everything contained in claim 4 except the use of a sensor to
detect the pedal’s position and transmit it to the computer controlling the
throttle. That additional aspect was revealed in sources such as the ’068 patent
and the sensors used by Chevrolet.
Under the controlling cases from the Court of Appeals for the Federal Circuit,
however, the District Court was not permitted to stop there. The court was
required also to apply the TSM test. The District Court held KSR had satisfied
the test. It reasoned (1) the state of the industry would lead inevitably to
combinations of electronic sensors and adjustable pedals, (2) Rixon provided the
basis for these developments, and (3) Smith taught a solution to the wire
chafing problems in Rixon, namely locating the sensor on the fixed structure of
the pedal. This could lead to the combination of Asano, or a pedal like it, with
a pedal position sensor.
The conclusion that the Engelgau design was obvious was supported, in the
District Court’s view, by the PTO’s rejection of the broader version of claim 4.
Had Engelgau included Asano in his patent application, it reasoned, the PTO
would have found claim 4 to be an obvious combination of Asano and Smith, as it
had found the broader version an obvious combination of Redding and Smith. As a
final matter, the District Court held that the secondary factor of Teleflex’s
commercial success with pedals based on Engelgau’s design did not alter its
conclusion. The District Court granted summary judgment for KSR.
With principal reliance on the TSM test, the Court of Appeals reversed. It ruled
the District Court had not been strict enough in applying the test, having
failed to make“‘finding[s] as to the specific understanding or principle
within the knowledge of a skilled artisan that would have motivated one with no
knowledge of [the] invention’ . . . to attach an electronic control to the
support bracket of the Asano assembly.” 119 Fed. Appx., at 288 (brackets in
original) (quoting In re Kotzab, 217 F. 3d 1365, 1371 (CA Fed. 2000)). The Court
of Appeals held that the District Court was incorrect that the nature of the
problem to be solved satisfied this requirement because unless the “prior art
references address[ed] the precise problem that the patentee was trying to
solve,” the problem would not motivate an inventor to look at those references.
119 Fed. Appx., at 288.
Here, the Court of Appeals found, the Asano pedal was designed to solve the
“‘constant ratio problem’” -- that is, to ensure that the force required to depress
the pedal is the same no matter how the pedal is adjusted -- whereas Engelgau
sought to provide a simpler, smaller, cheaper adjustable electronic pedal. Ibid.
As for Rixon, the court explained, that pedal suffered from the problem of wire
chafing but was not designed to solve it. In the court’s view Rixon did not
teach anything helpful to Engelgau’s purpose. Smith, in turn, did not relate to
adjustable pedals and did not “necessarily go to the issue of motivation to
attach the electronic control on the support bracket of the pedal assembly.”
Ibid. When the patents were interpreted in this way, the Court of Appeals held,
they would not have led a person of ordinary skill to put a sensor on the sort
of pedal described in Asano.
That it might have been obvious to try the combination of Asano and a sensor was
likewise irrelevant, in the court’s view, because “‘“[o]bvious to try” has long
been held not to constitute obviousness.’” Id., at 289 (quoting In re Deuel, 51
F. 3d 1552, 1559 (CA Fed. 1995)).
The Court of Appeals also faulted the District Court’s consideration of the
PTO’s rejection of the broader version of claim 4. The District Court’s role,
the Court of Appeals
explained, was not to speculate regarding what the PTO
might have done had the Engelgau patent mentioned Asano. Rather, the court held,
the District Court was obliged first to presume that the issued patent was valid
and then to render its own independent judgment of obviousness based on a review
of the prior art. The fact that the PTO had rejected the broader version of
claim 4, the Court of Appeals said, had no place in that analysis.
The Court of Appeals further held that genuine issues of material fact precluded
summary judgment. Teleflex had proffered statements from one expert that claim 4
“‘was a simple, elegant, and novel combination of features,’” 119 Fed. Appx., at
290, compared to Rixon, and from another expert that claim 4 was non obvious
because, unlike in Rixon, the sensor was mounted on the support bracket rather
than the pedal itself. This evidence, the court concluded, sufficed to require a
trial.
II
A
We begin by rejecting the rigid approach of the Court of Appeals. Throughout
this Court’s engagement with the question of obviousness, our cases have set
forth an expansive and flexible approach inconsistent with the way the Court of
Appeals applied its TSM test here. To be sure, Graham recognized the need for
“uniformity and definiteness.” 383 U. S., at 18. Yet the principles laid down
in Graham reaffirmed the “functional approach” of Hotchkiss, 11 How. 248. See
383 U. S., at 12. To this end, Graham set forth a broad inquiry and invited
courts, where appropriate, to look at any secondary considerations that would
prove instructive. Id., at 17.
Neither the enactment of §103 nor the analysis in Graham disturbed this Court’s
earlier instructions concerning the need for caution in granting a patent based
on the combination of elements found in the prior art. For over a
half century,
the Court has held that a “patent for a combination which only unites old
elements with no change in their respective functions . . . obviously withdraws
what is already known into the field of its monopoly and diminishes the
resources available to skillful men.” Great Atlantic & Pacific Tea Co. v.
Supermarket Equipment Corp., 340 U. S. 147, 152 (1950). This is a principal
reason for declining to allow patents for what is obvious. The combination of
familiar elements according to known methods is likely to be obvious when it
does no more than yield predictable results. Three cases decided after Graham
illustrate the application of this doctrine.
In United States v. Adams, 383 U. S. 39, 40 (1966), a companion case to Graham,
the Court considered the obviousness of a “wet battery” that varied from prior
designs in two ways: It contained water, rather than the acids conventionally
employed in storage batteries; and its electrodes were magnesium and cuprous
chloride, rather than zinc and silver chloride. The Court recognized that when a
patent claims a structure already known in the prior art that is altered by the
mere substitution of one element for another known in the field, the combination
must do more than yield a predictable result. 383 U. S., at 50–51. It
nevertheless rejected the Government’s claim that Adams’s battery was obvious.
The Court relied upon the corollary principle that when the prior art teaches
away from combining certain known elements, discovery of a successful means of
combining them is more likely to be nonobvious. Id., at 51–52. When Adams
designed his battery, the prior art warned that risks were involved in using the
types of electrodes he employed. The fact that the elements worked together in
an unexpected and fruitful manner supported the conclusion that Adams’s design
was not obvious to those skilled in the art.
In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396 U. S. 57 (1969), the
Court elaborated on this approach.
The subject matter of the patent before the Court was a device combining two
pre-existing elements: a radiant-heat burner and a paving machine. The device,
the Court concluded, did not create some new synergy: The radiant-heat burner
functioned just as a burner was expected to function; and the paving machine did
the same. The two in combination did no more than they would in
separate, sequential operation. Id., at 60–62. In those circumstances, “while the
combination of old elements performed a useful function, it added nothing to the
nature and quality of the radiant-heat burner already patented,” and the patent
failed under §103. Id., at 62 (footnote omitted).
Finally, in Sakraida v. AG Pro, Inc., 425 U. S. 273 (1976), the Court derived
from the precedents the conclusion that when a patent “simply arranges old
elements with each performing the same function it had been known to perform”
and yields no more than one would expect from such an arrangement, the
combination is obvious. Id., at 282.
The principles underlying these cases are instructive when the question is
whether a patent claiming the combination of elements of prior art is obvious.
When a work is available in one field of endeavor, design incentives and other
market forces can prompt variations of it, either in the same field or a
different one. If a person of ordinary skill can implement a predictable
variation, §103 likely bars its patentability. For the same reason, if a
technique has been used to improve one device, and a person of ordinary skill in
the art would recognize that it would improve similar devices in the same way,
using the technique is obvious unless its actual application is beyond his or
her skill. Sakraida and Anderson’s-Black Rock are illustrative -- a court must
ask whether the improvement is more than the predictable use of prior art
elements according to their established functions.
Following these principles may be more difficult in other
cases than it is here
because the claimed subject matter may involve more than the simple substitution
of one known element for another or the mere application of a known technique to
a piece of prior art ready for the improvement. Often, it will be necessary for
a court to look to interrelated teachings of multiple patents; the effects of
demands known to the design community or present in the market place; and the
background knowledge possessed by a person having ordinary skill in the art, all
in order to determine whether there was an apparent reason to combine the known
elements in the fashion claimed by the patent at issue. To facilitate review,
this analysis should be made explicit. See In re Kahn, 441 F. 3d 977, 988 (CA
Fed. 2006) (“[R]ejections on obviousness grounds cannot be sustained by mere
conclusory statements; instead, there must be some articulated reasoning with
some rational underpinning to support the legal conclusion of obviousness”). As
our precedents make clear, however, the analysis need not seek out precise
teachings directed to the specific subject matter of the challenged claim, for a
court can take account of the inferences and creative steps that a person of
ordinary skill in the art would employ.
B
When it first established the requirement of demonstrating a teaching,
suggestion, or motivation to combine known elements in order to show that the
combination is obvious, the Court of Customs and Patent Appeals captured a
helpful insight. See Application of Bergel, 292 F. 2d 955, 956–957 (1961). As is
clear from cases such as Adams, a patent composed of several elements is not
proved obvious merely by demonstrating that each of its elements was,
independently, known in the prior art. Although common sense directs one to look
with care at a patent application that claims as innovation the combination of
two known devices according to their established functions, it can be important
to identify a reason that would have prompted a person of ordinary skill in the
relevant field to combine the elements in the way the claimed new invention
does. This is so because inventions in most, if not all, instances rely upon
building blocks long since uncovered, and claimed discoveries almost of necessity
will be combinations of what, in some sense, is already known.
Helpful insights, however, need not become rigid and mandatory formulas; and
when it is so applied, the TSM test is incompatible with our precedents. The
obviousness analysis cannot be confined by a formalistic conception of the words
teaching, suggestion, and motivation, or by overemphasis on the importance of
published articles and the explicit content of issued patents. The diversity of
inventive pursuits and of modern technology counsels against limiting the
analysis in this way. In many fields it may be that there is little discussion
of obvious techniques or combinations, and it often may be the case that market
demand, rather than scientific literature, will drive design trends. Granting
patent protection to advances that would occur in the ordinary course without
real innovation retards progress and may, in the case of patents combining
previously known elements, deprive prior inventions of their value or utility.
In the years since the Court of Customs and Patent Appeals set forth the essence
of the TSM test, the Court of Appeals no doubt has applied the test in accord
with these principles in many cases. There is no necessary inconsistency between
the idea underlying the TSM test and the Graham analysis. But when a court
transforms the general principle into a rigid rule that limits the obviousness
inquiry, as the Court of Appeals did here, it errs.
C
The flaws in the analysis of the Court of Appeals relate
for the most part to
the court’s narrow conception of the obviousness inquiry reflected in its
application of the TSM test. In determining whether the subject matter of a
patent claim is obvious, neither the particular motivation nor the avowed
purpose of the patentee controls. What matters is the objective reach of the
claim. If the claim extends to what is obvious, it is invalid under §103. One of
the ways in which a patent’s subject matter can be proved obvious is by noting
that there existed at the time of invention a known problem for which there was
an obvious solution encompassed by the patent’s claims.
The first error of the Court of Appeals in this case was to foreclose this
reasoning by holding that courts and patent examiners should look only to the
problem the patentee was trying to solve. 119 Fed. Appx., at 288. The Court of
Appeals failed to recognize that the problem motivating the patentee may be only
one of many addressed by the patent’s subject matter. The question is not
whether the combination was obvious to the patentee but whether the combination
was obvious to a person with ordinary skill in the art. Under the correct
analysis, any need or problem known in the field of endeavor at the time of
invention and addressed by the patent can provide a reason for combining the
elements in the manner claimed.
The second error of the Court of Appeals lay in its assumption that a person of
ordinary skill attempting to solve a problem will be led only to those elements
of prior art designed to solve the same problem. Ibid. The primary purpose of
Asano was solving the constant ratio problem; so, the court concluded, an
inventor considering how to put a sensor on an adjustable pedal would have no
reason to consider putting it on the Asano pedal. Ibid. Common sense teaches,
however, that familiar items may have obvious uses beyond their primary
purposes, and in many cases a person of ordinary skill will be able to fit the
teachings of multiple patents together like pieces of a
puzzle. Regardless of
Asano’s primary purpose, the design provided an obvious example of an adjustable
pedal with a fixed pivot point; and the prior art was replete with patents
indicating that a fixed pivot point was an ideal mount for a sensor. The idea
that a designer hoping to make an adjustable electronic pedal would ignore Asano
because Asano was designed to solve the constant ratio problem makes little
sense. A person of ordinary skill is also a person of ordinary creativity, not
an automaton.
The same constricted analysis led the Court of Appeals to conclude, in error,
that a patent claim cannot be proved obvious merely by showing that the
combination of elements was “obvious to try.” Id., at 289 (internal quotation
marks omitted). When there is a design need or market pressure to solve a
problem and there are a finite number of identified, predictable solutions, a
person of ordinary skill has good reason to pursue the known options within his
or her technical grasp. If this leads to the anticipated success, it is likely
the product not of innovation but of ordinary skill and common sense. In that
instance the fact that a combination was obvious to try might show that it was
obvious under §103.
The Court of Appeals, finally, drew the wrong conclusion from the risk of courts
and patent examiners falling prey to hindsight bias. A factfinder should be
aware, of course, of the distortion caused by hindsight bias and must be
cautious of arguments reliant upon ex post reasoning. See Graham, 383 U. S., at
36 (warning against a “temptation to read into the prior art the teachings of
the invention in issue” and instructing courts to “‘guard against slipping into
the use of hindsight’” (quoting Monroe Auto Equipment Co. v. Heckethorn Mfg.
& Supply Co., 332 F. 2d 406, 412 (CA6 1964))). Rigid preventative rules that
deny factfinders recourse to common sense, however, are neither necessary under
our case law nor consistent with it.
We note the Court of Appeals has since elaborated a
q broader conception of the
TSM test than was applied in the instant matter. See, e.g., DyStar Textilfarben
GmbH & Co. Deutschland KG v. C. H. Patrick Co., 464 F. 3d 1356, 1367 (2006)
(“Our suggestion test is in actuality quite flexible and not only permits, but
requires, consideration of common knowledge and common sense”); Alza Corp. v.
Mylan Labs., Inc., 464 F. 3d 1286, 1291 (2006) (“There is flexibility in our
obviousness jurisprudence because a motivation may be found implicitly in the
prior art. We do not have a rigid test that requires an actual teaching to
combine . . .”). Those decisions, of course, are not now before us and do not
correct the errors of law made by the Court of Appeals in this case. The extent
to which they may describe an analysis more consistent with our earlier
precedents and our decision here is a matter for the Court of Appeals to
consider in its future cases. What we hold is that the fundamental
misunderstandings identified above led the Court of Appeals in this case to
apply a test inconsistent with our patent law decisions.
III
When we apply the standards we have explained to the instant facts, claim 4 must
be found obvious. We agree with and adopt the District Court’s recitation of the
relevant prior art and its determination of the level of ordinary skill in the
field. As did the District Court, we see little difference between the teachings
of Asano and Smith and the adjustable electronic pedal disclosed in claim 4 of
the Engelgau patent. A person having ordinary skill in the art could have
combined Asano with a pedal position sensor in a fashion encompassed by claim 4,
and would have seen the benefits of doing so.
A
Teleflex argues in passing that the Asano pedal cannot be combined with a
sensor in the manner described by
claim 4 because of the design of Asano’s pivot
mechanisms. See Brief for Respondents 48–49, and n. 17. Therefore, Teleflex
reasons, even if adding a sensor to Asano was obvious, that does not establish
that claim 4 encompasses obvious subject matter. This argument was not,
however, raised before the District Court. There Teleflex was content to assert
only that the problem motivating the invention claimed by the Engelgau patent
would not lead to the solution of combining of Asano with a sensor. See
Teleflex’s Response to KSR’s Motion for Summary Judgment of Invalidity in No.
02–74586 (ED Mich.), pp. 18–20, App. 144a–146a. It is also unclear whether the
current argument was raised before the Court of Appeals, where Teleflex advanced
the nonspecific, conclusory contention that combining Asano with a sensor would
not satisfy the limitations of claim 4. See Brief for Plaintiffs-Appellants in
No. 04–1152 (CA Fed.), pp. 42–44. Teleflex’s own expert declarations, moreover,
do not support the point Teleflex now raises. See Declaration of Clark J.
Radcliffe, Ph.D., Supplemental App. 204–207; Declaration of Timothy L. Andresen,
id., at 208–210. The only statement in either declaration that might bear on the
argument is found in the Radcliffe declaration:
“Asano . . . and Rixon . . . are complex mechanical linkage-based devices that
are expensive to produce and assemble and difficult to package. It is exactly
these difficulties with prior art designs that [Engelgau] resolves. The use of
an adjustable pedal with a single pivot reflecting pedal position combined with
an electronic control mounted between the support and the adjustment assembly at
that pivot was a simple, elegant, and novel combination of features in the
Engelgau ’565 patent.” Id., at 206, ¶16.
Read in the context of the declaration as a whole this is best interpreted to
mean that Asano could not be used to
solve “[t]he problem addressed by Engelgau
’565[:] to provide a less expensive, more quickly assembled, and smaller package
adjustable pedal assembly with electronic control.” Id., at 205, ¶10.
The District Court found that combining Asano with a pivot-mounted pedal
position sensor fell within the scope of claim 4. 298 F. Supp. 2d, at 592–593.
Given the significance of that finding to the District Court’s judgment, it is
apparent that Teleflex would have made clearer challenges to it if it intended
to preserve this claim. In light of Teleflex’s failure to raise the argument in
a clear fashion, and the silence of the Court of Appeals on the issue, we take
the District Court’s conclusion on the point to be correct.
B
The District Court was correct to conclude that, as of the time Engelgau
designed the subject matter in claim 4, it was obvious to a person of ordinary
skill to combine Asano with a pivot-mounted pedal position sensor. There then
existed a marketplace that created a strong incentive to convert mechanical
pedals to electronic pedals, and the prior art taught a number of methods for
achieving this advance. The Court of Appeals considered the issue too narrowly
by, in effect, asking whether a pedal designer writing on a blank slate would
have chosen both Asano and a modular sensor similar to the ones used in the
Chevrolet truckline and disclosed in the ’068 patent. The District Court
employed this narrow inquiry as well, though it reached the correct result
nevertheless. The proper question to have asked was whether a pedal designer of
ordinary skill, facing the wide range of needs created by developments in the
field of endeavor, would have seen a benefit to upgrading Asano with a sensor.
In automotive design, as in many other fields, the interaction of multiple
components means that changing one
component often requires the others to be
modified as well. Technological developments made it clear that engines using
computer-controlled throttles would become standard. As a result, designers
might have decided to design new pedals from scratch; but they also would have
had reason to make pre-existing pedals work with the new engines. Indeed,
upgrading its own pre-existing model led KSR to design the pedal now accused of
infringing the Engelgau patent.
For a designer starting with Asano, the question was where to attach the sensor.
The consequent legal question, then, is whether a pedal designer of ordinary
skill starting with Asano would have found it obvious to put the sensor on a
fixed pivot point. The prior art discussed above leads us to the conclusion that
attaching the sensor where both KSR and Engelgau put it would have been obvious
to a person of ordinary skill.
The ’936 patent taught the utility of putting the sensor on the pedal device,
not in the engine. Smith, in turn, explained to put the sensor not on the
pedal’s footpad but instead on its support structure. And from the known
wire-chafing problems of Rixon, and Smith’s teaching that “the pedal assemblies
must not precipitate any motion in the connecting wires,” Smith, col. 1, lines
35–37, Supplemental App. 274, the designer would know to place the sensor on a
nonmoving part of the pedal structure. The most obvious nonmoving point on the
structure from which a sensor can easily detect the pedal’s position is a pivot
point. The designer, accordingly, would follow Smith in mounting the sensor on a
pivot, thereby designing an adjustable electronic pedal covered by claim 4.
Just as it was possible to begin with the objective to upgrade Asano to work
with a computer-controlled throttle, so too was it possible to take an
adjustable electronic pedal like Rixon and seek an improvement that would avoid
the wire-chafing problem. Following similar steps to
those just explained, a
designer would learn from Smith to avoid sensor movement and would come, thereby,
to Asano because Asano disclosed an adjustable pedal with a fixed pivot.
Teleflex indirectly argues that the prior art taught away from attaching a
sensor to Asano because Asano in its view is bulky, complex, and expensive. The
only evidence Teleflex marshals in support of this argument, however, is the
Radcliffe declaration, which merely indicates that Asano would not have solved
Engelgau’s goal of making a small, simple, and inexpensive pedal. What the
declaration does not indicate is that Asano was somehow so flawed that there was
no reason to upgrade it, or pedals like it, to be compatible with modern
engines. Indeed, Teleflex’s own declarations refute this conclusion. Dr.
Radcliffe states that Rixon suffered from the same bulk and complexity as did
Asano. See id., at 206. Teleflex’s other expert, however, explained that Rixon
was itself designed by adding a sensor to a pre-existing mechanical pedal. See
id., at 209. If Rixon’s base pedal was not too flawed to upgrade, then Dr.
Radcliffe’s declaration does not show Asano was either. Teleflex may have made a
plausible argument that Asano is inefficient as compared to Engelgau’s preferred
embodiment, but to judge Asano against Engelgau would be to engage in the very
hindsight bias Teleflex rightly urges must be avoided. Accordingly, Teleflex has
not shown anything in the prior art that taught away from the use of Asano.
Like the District Court, finally, we conclude Teleflex has shown no secondary
factors to dislodge the determination that claim 4 is obvious. Proper
application of Graham and our other precedents to these facts therefore leads to
the conclusion that claim 4 encompassed obvious subject matter. As a result, the
claim fails to meet the requirement of §103.
We need not reach the question whether the failure to
disclose Asano during the
prosecution of Engelgau voids the presumption of validity given to issued
patents, for claim 4 is obvious despite the presumption. We nevertheless think
it appropriate to note that the rationale underlying the presumption -- that the
PTO, in its expertise, has approved the claim -- seems much diminished here.
IV
A separate ground the Court of Appeals gave for reversing the order for summary
judgment was the existence of a dispute over an issue of material fact. We
disagree with the Court of Appeals on this point as well. To the extent the court
understood the Graham approach to exclude the possibility of summary judgment
when an expert provides a conclusory affidavit addressing the question of
obviousness, it misunderstood the role expert testimony plays in the analysis. In
considering summary judgment on that question the district court can and should
take into account expert testimony, which may resolve or keep open certain
questions of fact. That is not the end of the issue, however. The ultimate
judgment of obviousness is a legal determination. Graham, 383 U. S., at 17.
Where, as here, the content of the prior art, the scope of the patent claim,and
the level of ordinary skill in the art are not in material dispute, and the
obviousness of the claim is apparent in light of these factors, summary judgment
is appropriate. Nothing in the declarations proffered by Teleflex prevented the
District Court from reaching the careful conclusions underlying its order for
summary judgment in this case.
* * *
We build and create by bringing to the tangible and palpable reality around us
new works based on instinct, simple logic, ordinary inferences, extraordinary
ideas, and sometimes even genius. These advances, once part of our
shared
knowledge, define a new threshold from which innovation starts once more. And as
progress beginning from higher levels of achievement is expected in the normal
course, the results of ordinary innovation are not the subject of exclusive
rights under the patent laws. Were it otherwise patents might stifle, rather
than promote, the progress of useful arts. See U. S. Const., Art. I, §8, cl.
8. These premises led to the bar on patents claiming obvious subject matter
established in Hotchkiss and codified in §103. Application of the bar must not
be confined within a test or formulation too constrained to serve its purpose.
KSR provided convincing evidence that mounting a modular sensor on a fixed pivot
point of the Asano pedal was a design step well within the grasp of a person of
ordinary skill in the relevant art. Its arguments, and the record, demonstrate
that claim 4 of the Engelgau patent is obvious. In rejecting the District Court’s
rulings, the Court of Appeals analyzed the issue in a narrow, rigid manner
inconsistent with §103 and our precedents. The judgment of the Court of Appeals
is reversed, and the case remanded for further proceedings consistent with this
opinion.
It is so ordered.
************************************************************
************************************************************
Cite as: 550 U.S. ____________(2007)
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the preliminary part of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D.C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 05-1056
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 is an
exception. Section 271(f) of the Patent Act, adopted in 1984, provides that
infringement does occur when one “supplies . . . from the United States,” for
“combination” abroad, a patented invention’s “components.” 35 U. S. C.
§271(f)(1). This case concerns the applicability of §271(f) to computer software
first sent from the United States to a foreign manufacturer on a master disk, or
by electronic transmission, then copied by the foreign recipient 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 incorporates software
code that, when installed, enables a computer to process speech in the manner
claimed by that patent. It bears emphasis, however, that uninstalled
Windows
software does not infringe AT&T’s patent any more than a computer standing
alone does; instead, the patent is infringed only when a computer is loaded with
Windows and is thereby rendered capable of performing as the patented speech
processor. The question before us: Does Microsoft’s liability 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? Our answer is “No.”
The master disk or electronic transmission Microsoft sends from the United
States is never installed on any of the foreign-made computers in question.
Instead, copies made abroad are used for installation. Because Microsoft does
not export from the United States the copies actually installed, it does not
“suppl[y] . . . from the United States” “components” of the relevant computers,
and therefore is not liable under §271(f) as currently written.
Plausible arguments can be made for and against extending §271(f) to the conduct
charged in this case as infringing AT&T’s patent. Recognizing that §271(f)
is an exception to the general rule that our patent law does not apply
extraterritorially, we resist giving the language in which Congress cast §271(f)
an expansive interpretation. Our decision leaves to Congress’ informed judgment
any adjustment of §271(f) it deems necessary or proper.
I
Our decision some 35 years ago in Deepsouth Packing Co. v. Laitram Corp., 406 U.
S. 518 (1972), a case about a shrimp deveining machine, led Congress to enact
§271(f). In that case, Laitram, holder of a patent on the time and
expense-saving machine, sued Deepsouth, manufacturer of an infringing deveiner.
Deepsouth conceded that the Patent Act barred it from making and selling its
deveining machine in the United States, but sought to salvage a
portion 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 the machine itself, and selling those parts to foreign buyers for
assembly and use abroad. Id., at 522–524.1 We agreed.
Interpreting our patent law as then written, we reiterated in Deepsouth that 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. §271(a) (1970 ed.) (“[W]hoever without
authority makes, uses or sells any patented invention, within the United States
during the term of the patent therefor, infringes the patent.”). Deep-south’s
foreign buyers did not infringe Laitram’s patent, we held, because they
assembled and used the deveining machines outside the United States. Deepsouth,
we therefore concluded, could not be charged with inducing or contributing to an
infringement. 406 U. S., at 526–527.2 Nor could Deepsouth be held liable as a
direct infringer, for it did not make, sell, or use the patented invention -- the
fully assembled deveining machine -- within 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
527–529.
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, signaled no intention to broaden the scope of the
privilege. Id., at 530 (“When, as here, the Constitution is permissive, the sign
of how far Congress has chosen to go can come only from Congress.”). 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 inventions for
assembly and use abroad. 406 U. S., at 532.
Focusing its attention on Deepsouth, Congress enacted §271(f). See Patent Law
Amendments Act of 1984, §101, 98 Stat. 3383; Fisch & Allen, The Application
of Domestic Patent Law to Exported Software: 35 U. S. C. §271(f), 25 U. Pa. J.
Int’l Econ. L. 557, 565 (2004) (“Congress specifically intended §271(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 causes to 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 in whole or in part, in such
manner as to actively induce the combination of such components outside of the
United States in a manner that would infringe the patent if such combination
occurred within the United States, shall be liable as an infringer.
“(2) Whoever without authority supplies or causes to be supplied in or from the
United States any component of a patented invention that is especially made or
especially adapted for use in the invention and not a staple article or
commodity of commerce suitable for substantial noninfringing use, where such
component is 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 the patent if such combination
occurred within the United States, shall be liable as an infringer.” 35 U. S. C.
§271(f).
II
Windows is designed, authored, and tested at Microsoft’s Redmond, Washington,
headquarters. Microsoft sells Windows to end users and computer manufacturers,
both foreign and domestic. Purchasing manufacturers install the software onto
the computers they sell. Microsoft sends to each of the foreign manufacturers a
master version of Windows, either on a disk or via encrypted electronic
transmission. The manufacturer uses the master version to generate copies. Those
copies, not the master sent by Microsoft, are installed on the foreign
manu-
facturer’s computers. Once assembly is complete, the foreign-made computers
are sold to users abroad. App. to Pet. for Cert. 45a–46a.4
AT&T’s patent (’580 patent) is for an apparatus (as relevant here, a
computer) capable of digitally encoding and compressing recorded speech.
Windows, the parties agree, contains software that enables a computer to process
speech in the manner claimed by the ’580 patent. In 2001, AT&T filed an
infringement suit in the United States District Court for the Southern District
of New York, charging Microsoft with liability for domestic and foreign
installations of Windows.
Neither Windows software (e.g., in a box on the shelf) nor a computer standing
alone (i.e., without Windows installed) infringes AT&T’s patent.
Infringement occurs only when Windows is installed on a computer, thereby
rendering it capable of performing as the patented speech processor. Microsoft
stipulated that by installing Windows on its own computers during the software
development process, it directly infringed the ’580 patent.5 Microsoft further
acknowledged that by licensing copies of Windows to manufacturers of computers
sold in the United States, it induced infringement of AT&T’s patent.6 Id., at
42a; Brief for Petitioner 3–4; Brief for Respondent 9, 19.
Microsoft denied, however, any liability based on the master disks and
electronic transmissions it dispatched to
foreign manufacturers, thus joining
issue with AT&T. By sending Windows to foreign manufacturers, AT&T
contended, Microsoft “supplie[d] . . . from the United States,” for “combination”
abroad, “components” of AT&T’s patented speech processor; accordingly,
AT&T urged, Microsoft was liable under §271(f). See supra, at 5
(reproducing text of §271(f)). Microsoft responded that unincorporated software,
because it is intangible information, cannot be typed a “component” of an
invention under §271(f). In any event, Microsoft urged, the foreign-generated
copies of Windows actually installed abroad were not “supplie[d] . . . from the
United States.” Rejecting these responses, the District Court held Microsoft
liable under §271(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 1366 (2005). We
granted certiorari, 549 U. S.___ (2006), and now reverse.
III
A
This case poses two questions: First, when, or in what form, does software
qualify as a “component” under §271(f)? Second, were “components” of the
foreign-made computers involved in this case “supplie[d]” by Microsoft “from the
United States”?7
As to the first question, no one in this litigation argues that software can
never rank as a “component” under §271(f). The parties disagree, however, over
the stage at which software becomes a component. Software, the “set of
instructions, known as code, that directs a computer to
perform specified
functions or operations,” Fantasy Sports Properties, Inc. v. Sportsline.com,
Inc., 287 F. 3d 1108, 1118 (CA Fed. 2002), can be conceptualized in (at least)
two ways. One can speak of software in the abstract: the instructions themselves
detached from any medium. (An analogy: The notes of Beethoven’s Ninth Symphony.)
One can alternatively envision a tangible “copy” of software, the instructions
encoded on a medium such as a CD-ROM. (Sheet music for Beethoven’s Ninth.)
AT&T argues that software in the abstract, not simply a particular copy of
software, qualifies as a “component” under §271(f). Microsoft and the United
States argue that only a copy of software, not software in the abstract, can be
a component.8
The significance of these diverse views becomes apparent when we turn to the
second question: Were components of the foreign-made computers involved in this
case “supplie[d]” by Microsoft “from the United States”? If the relevant
components are the copies of Windows actually installed on the foreign
computers, AT&T could not persuasively argue that those components, though
generated abroad, were “supplie[d] . . . from the United States” as §271(f)
requires for liability to attach.9 If, on the other
hand, Windows in the abstract
qualifies as a component within §271(f)’s compass, it would not matter that the
master copies of Windows software dispatched from the United States were not
themselves installed abroad as working parts of the foreign computers.10
With this explanation of the relationship between the two questions in view, we
further consider the twin inquiries.
B
First, when, or in what form, does software become a “component” under §271(f)?
We construe §271(f)’s terms “in accordance with [their] ordinary or natural
meaning.” FDIC v. Meyer, 510 U. S. 471, 476 (1994). Section 271(f) applies to
the supply abroad of the “components of a patented invention, where such
components are uncombined in whole or in part, in such manner as to actively
induce the combination of such components.” §271(f)(1) (emphasis added). The
provision thus applies only to “such components”11 as are combined to form the
“patented invention” at issue. The patented invention here is AT&T’s
speech-processing computer.
Until it is expressed as a computer-readable “copy,”
e.g., on a CD-ROM, Windows software -- indeed any software detached from an
activating medium -- remains uncombinable. It cannot be inserted into a CD-ROM
drive or downloaded from the Internet; it cannot be installed or executed on a
computer. Abstract software code is an idea
without physical embodiment, and as
such, it does not match §271(f)’s categorization: “components” amenable to
“combination.” Windows abstracted from a tangible copy no doubt is information --
a detailed set of instructions -- and thus might be compared to a blueprint (or
anything containing design information, e.g., a schematic, template, or
prototype). A blueprint may contain precise instructions for the construction
and combination of the components of a patented device, but it is not itself a
combinable component of that device. AT&T and its amici do not suggest
otherwise. Cf. Pellegrini v. Analog Devices, Inc., 375 F. 3d 1113, 1117–1119 (CA
Fed. 2004) (transmission abroad of instructions for production of patented
computerchips not covered by §271(f)).
AT&T urges that software, at least when expressed as machine-readable object
code, is distinguishable from design information presented in a blueprint.
Software, unlike a blueprint, is “modular”; it is a stand-alone product
developed and marketed “for use on many different types of computer hardware and
in conjunction with many other types of software.” Brief for Respondent 5; Tr.
of Oral Arg. 46. Software’s modularity persists even after installation; it can
be updated or removed (deleted) without affecting the hardware on which it is
installed. Ibid. Software, unlike a blueprint, is also “dynamic.” Tr. of Oral
Arg. 46. After a device has been built according to a blueprint’s instructions,
the blueprint’s work is done (as AT&T puts it, the blueprint’s instructions
have been “exhausted,” ibid.). Software’s instructions, in contrast, are
contained in and continuously performed by a computer. Brief for Respondent
27–28; Tr. of Oral Arg. 46. See also Eolas Technologies Inc. v. Microsoft Corp.,
399 F. 3d 1325, 1339 (CA Fed. 2005) (“[S]oftware code . . . drives the
functional nucleus of the finished computer product.” (quoting Imagexpo, L. L.
C. v. Microsoft Corp., 299 F. Supp. 2d 550, 553 (ED Va. 2003))).
The distinctions advanced by AT&T do not persuade us to characterize
software, uncoupled from a medium, as a combinable component. Blueprints too, or
any design information for that matter, can be independently developed, bought,
and sold. If the point of AT&T’s argument is that we do not see blueprints
lining stores’ shelves, the same observation may be made about software in the
abstract: What retailers sell, and consumers buy, are copies of software.
Likewise, before software can be contained in and continuously performed by a
computer, before it can be updated or deleted, an actual, physical copy of the
software must be delivered by CDROM or some other means capable of interfacing
with the computer.12
Because it is so easy to encode software’s instructions onto a medium that can
be read by a computer, AT&T intimates, that extra step should not play a
decisive role under §271(f). But the extra step is what renders the software a
usable, combinable part of a computer; easy or not, the copy-producing step is
essential. Moreover, many tools may be used easily and inexpensively to generate
the parts of a device. A machine for making sprockets might be used by a
manufacturer to produce tens of thousands of sprockets an hour. That does not
make the machine a “component” of the tens of thousands of devices in which the
sprockets are incorporated, at least not under any ordinary understanding of the
term “component.”
Con-
gress, of course, might have included within §271(f)’s compass, for example,
not only combinable “components” of a patented invention, but also “information,
instructions, or tools from which those components readily may be generated.” It
did not. In sum, a copy of Windows, not Windows in the abstract, qualifies as a
“component” under §271(f).13
C
The next question, has Microsoft “supplie[d] . . . from the United States”
components of the computers here involved? Under a conventional reading of
§271(f)’s text,the answer would be “No,” for the foreign-made copies of Windows
actually installed on the computers were “supplie[d]” from places outside the
United States. The Federal Circuit majority concluded, however, that “for
software ‘components,’ the act of copying is subsumed in the act of
‘supplying.’” 414 F. 3d, at 1370. A master sent abroad, the majority observed,
differs not at all from the exact copies, easily, inexpensively, and swiftly
generated from the master; hence “sending a single copy abroad with the intent
that it be replicated invokes §271(f) liability for th[e] foreign-made copies.”
Ibid.; cf. post, at 2 (STEVENS, J., dissenting) (“[A] master disk is the
functional equivalent 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 dis-
tinct from any subsequent “copying, replicating, or
reproducing -- in effect manufacturing.” 414 F. 3d, at 1372-1373 (internal
quotation marks omitted); see id., at 1373 (“[C]opying and supplying are
separate acts with different consequences -- particularly when the ‘supplying’
occurs in the United States and the copying occurs in Dusseldorf 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 component . .
. .”). He further observed: “The only true difference between making and
supplying software components and physical components [of other patented
inventions] is that copies of software components are easier to make and
transport.” Id., at 1374. But nothing in §271(f)’s text, Judge Rader maintained,
renders ease of copying a relevant, no less decisive, 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 components.”
§271(f)(1) (emphasis added). Under this formulation, the very components
supplied from the United States, and not copies thereof, trigger §271(f)
liability when combined abroad to form the patented invention at issue. Here, as
we have repeatedly noted, see supra, at 1-2, 5-6, 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 same could be said of other items: “Keys or
machine parts might be copied from a master; chemical or biological substances
might be created by reproduction; and paper products might be made by electronic
copying and printing.” Brief for United States as Amicus Curiae 24. See also
supra, at 11-12 (rejecting argument similarly based on ease of copying in
construing “component”). Section 271(f) contains no instruction to gauge when
duplication is easy and cheap enough to deem a copy in fact made abroad
nevertheless “supplie[d] . . . from the United States.” The absence of anything
addressing copying in the statutory text weighs against a judicial determination
that replication abroad of a master dispatched from the United States “supplies”
the foreign-made copies from the United States within the intendment of
§271(f).16
D
Any doubt that Microsoft’s conduct falls outside §271(f)’s compass would be
resolved by the presumption against extraterritoriality, on which we have
already touched. See supra, at 2, 4. The presumption that United States law
governs domestically but does not rule the world applies with particular force
in patent law. The traditional understanding that our patent law “operate[s]
only domestically and d[oes] not extend to foreign activities,” Fisch &
Allen, supra, at 559, is embedded in the Patent Act itself, which provides that
a patent confers exclusive rights in an invention within the United States. 35
U. S. C. §154(a)(1) (patentee’s rights over invention apply to manufacture, use,
or sale “throughout the United States” and to importation “into the United
States”). See Deepsouth, 406 U. S., at 531 (“Our patent system makes no claim to
extraterritorial effect”; our legislation “d[oes] not, and [was] 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.” (quoting Brown,
19 How., at 195)).
As a principle of general application, moreover, we have stated that courts
should “assume that legislators take account of the legitimate sovereign
interests of other nations when they write American laws.” F. Hoffmann-La Roche
Ltd v. Empagran S. A., 542 U. S. 155, 164 (2004); see EEOC v. Arabian American
Oil Co., 499 U. S. 244, 248 (1991). Thus, the United States accurately conveyed
in this case: “Foreign conduct is [generally] the domain of foreign law,” and in
the area here involved, in particular, foreign law “may embody different policy
judgments about the relative rights of inventors, competitors, and the pub-
lic in
patented inventions.” Brief for United States as Amicus Curiae 28. Applied to
this case, the presumption tugs strongly against construction of §271(f) to
encompass as a “component” not only a physical copy of software, but also
software’s intangible code, and to render “supplie[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
§271(f) specifically to extend the reach of United States patent law to cover
certain activity abroad. But as this Court has explained, “the presumption is
not defeated . . . just because [a statute] specifically addresses [an] issue of
extraterritorial application,” Smith
v. United States, 507 U. S. 197, 204 (1993); it remains instructive in
determining the extent of the statutory exception. See Empagran, 542 U. S., at
161–162, 164–165; Smith, 507 U. S., at 204.
AT&T alternately contends that the presumption holds no sway here given that
§271(f), by its terms, applies only to domestic conduct, i.e., to the supply of
a patented invention’s components “from the United States.”
§271(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
software is subsequently made [abroad] and combined with computer hardware
[abroad] for sale [abroad.]” Brief for United States as Amicus Curiae 29; see
414 F. 3d, at 1373, 1375 (Rader, J., dissenting). In short, foreign law alone,
not United States law, currently governs the manufacture and sale of components
of patented inventions in foreign countries. If AT&T desires to prevent
copying in foreign countries, its remedy today lies in obtaining and enforcing
foreign patents. See Deepsouth, 406 U. S., at 531.17
IV
AT&T urges that reading §271(f) to cover only those copies of software
actually dispatched from the United States creates a “loophole” for software
makers. Liability for infringing a United States patent could be avoided, as
Microsoft’s practice shows, by an easily arranged circumvention: Instead of
making installation copies of software in the United States, the copies can be
made abroad, swiftly and at small cost, by generating them from a master
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® software—specifically for the purpose of foreign replication --
avoids infringement, we would be subverting the remedial nature of §271(f),
permitting a technical avoidance of the statute by ignoring the advances in a
field of technology -- and its associated industry practices -- that developed after
the enactment of §271(f). . . . Section §271(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
dynamic judicial interpretation of §271(f) is in order. The “loophole,” in our
judgment, is properly left for Congress to consider, and to close if it finds
such action warranted.
There is no dispute, we note again, that §271(f) is inapplicable to the export
of design tools -- blueprints, schemat-
ics, templates, and prototypes -- all of which
may provide the information required to construct and combine overseas the
components of inventions patented under United States law. See supra, at 10–12.
We have no license to attribute to Congress an unstated intention to place the
information Microsoft dispatched from the United States in a separate category.
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 that case
were undeniably at the fore when §271(f) was in the congressional hopper. In
Deepsouth, the items exported were kits containing all the physical, readily
assemblable parts of a shrimp deveining machine (not an intangible set of
instructions), and those parts themselves (not foreign-made copies of them)
would be combined abroad by foreign buyers. Having attended to the gap made
evident in Deepsouth, Congress did not address other arguable gaps: Section
271(f) does not identify as an infringing act conduct in the United States that
facilitates making a component of a patented invention outside the United
States; nor does the provision check “suppl[ying] . . . from the United States”
information, instructions, or other materials needed to make copies abroad.18
Given that Congress did not home in on the loophole AT&T describes, and in
view of the expanded extraterritorial thrust AT&T’s reading of §271(f)
entails, our precedent leads us to leave in Congress’ court the
patent-protective determination AT&T
seeks. Cf. Sony Corp. of America v.
Universal City Studios, Inc., 464 U. S. 417, 431 (1984) (“In a case like this,
in which Congress has not plainly marked our course, we must be circumspect in
construing the scope of rights created by a legislative enactment which never
contemplated such a calculus of interests.”).
Congress is doubtless aware of the ease with which software (and other
electronic 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. Corley, 273
F. 3d 429, 435 (CA2 2001). The resulting measure, the Digital Millennium
Copyright Act, 17 U. S. C. §1201 et seq., “backed with legal sanctions the
efforts of copyright owners to protect their works from piracy behind digital
walls such as encryption codes or password protections.” Universal City Studios,
273 F. 3d, at 435. If the patent law is to be adjusted better “to account for
the realities of software distribution,” 414 F. 3d, at 1370, the alteration
should be made after focused legislative consideration, and not by the Judiciary
forecasting Congress’ likely disposition.
For the reasons stated, the judgment of the Court of Appeals for the Federal
Circuit is
Reversed.
THE CHIEF JUSTICE took no part in the consideration or decision of this case.
__________________
1 Deepsouth shipped its deveining equipment “to foreign customers in three
separate boxes, each containing only parts of the 1¾-ton machines, yet the whole
[was] assemblable in less than one hour.” Deepsouth Packing Co. v. Laitram
Corp., 406 U. S. 518, 524 (1972).
2 See 35 U. S. C. §271(b) (1970 ed.) (“Whoever actively induces
infringement of a patent shall be liable as an infringer.”); §271(c) (rendering
liable as a contributory infringer anyone who sells or imports a “component” of a
patented invention, “knowing the same to be especially made or especially
adapted for use in an infringement of such patent, and not a staple article or
commodity of commerce suitable for substantial non-infringing use”).
3 See also, e.g., Patent Law Amendments of 1984, S. Rep. No.
98–663,pp. 2–3 (1984) (describing §271(f) as “a response to the Supreme
Court’s 1972 Deepsouth decision which interpreted the patent law not to make it
infringement where the final assembly and sale is abroad”); Section-by-Section
Analysis of H. R. 6286, 130 Cong. Rec. 28069 (1984) (“This proposal 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.”).
4 Microsoft also distributes Windows to foreign manufacturers
indirectly, by sending a master version to an authorized foreign “replicator”;
the replicator then makes copies and ships them to the manufacturers. App. to
Pet. for Cert. 45a–46a.
5 See 35 U. S. C. §271(a) (“[W]hoever without authority makes, uses,
offers to sell, or sells any patented invention, within the United States or
imports into the United States any patented invention during the term of the
patent therefor, infringes the patent.”).
6 See §271(b) (“Whoever actively induces infringement of a patent
shall be liable as an infringer.”).
7 The record leaves unclear which paragraph of §271(f) AT&T’s
claim invokes. While there are differences between §271(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 14–15, n. 16 (explaining why both
paragraphs yield the same result). For clarity’s sake, we focus our analysis on
the text of §271(f)(1).
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 its
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 software development
process). It is stipulated that object code was on the master disks and
electronic transmissions Microsoft dispatched from the United States.
9
On this view of “component,” the copies of Windows on the master
disks and electronic transmissions that Microsoft sent from the United States
could not themselves serve as a basis for liability, because those copies were
not installed on the foreign manufacturers’ computers. See §271(f)(1)
(encompassing only those components “combin[ed] . . . outside of the United
States in a manner that would infringe the patent if such combination occurred
within the United States”)
10 The Federal Circuit panel in this case, relying on that court’s
prior decision in Eolas Technologies Inc. v. Microsoft Corp., 399 F. 3d 1325
(2005), held that software qualifies as a component under §271(f). We are unable
to determine, however, whether the Federal Circuit panels regarded as a
component software in the abstract, or a copy of software.
11“Component” is commonly defined as “a constituent part,” “element,”
or “ingredient.” Webster’s Third New International Dictionary of the English
Language 466 (1981).
12 The dissent, embracing AT&T’s argument, contends that, “unlike
a blueprint that merely instructs a user how to do something, software actually
causes infringing conduct to occur.” Post, at 3 (STEVENS, J., dissenting). We
have emphasized, however, that Windows can “caus[e] infringing conduct to occur”
-- i.e., function as part of AT&T’s speech-processing computer -- only when
expressed as a computer-readable copy. Abstracted from a usable copy, Windows
code is intangible, uncombinable information, more like notes of music in the
head of a composer than “a roller that causes a player piano to produce sound.”
Ibid.
13 We need not address whether software in the abstract, or any other
intangible, can ever be a component under §271(f). If an intangible method or
process, for instance, qualifies as a “patented invention” under §271(f) (a
question as to which we express no opinion), the combinable components of that
invention might be intangible as well. The invention before us, however,
AT&T’s speech-processing computer, is a tangible thing.
14 In a footnote, Microsoft suggests that even a disk shipped from the
United States, and used to install Windows directly on a foreign computer, would
not give rise to liability under §271(f) if the disk were removed after
installation. See Brief for Petitioner 37, n. 11; cf. post, at 2–4 (ALITO, 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
until used to complete the assembly of an infringing machine.” Post, at 2. But
as we have underscored, foreign-made copies of Windows, not the masters
Microsoft dispatched from the United States, were installed on the computers
here involved. A more apt analogy, therefore, would be the export of knives for
copying abroad, with the foreign-made copies “warehoused until used to complete
the assembly of an infringing machine.” Ibid. Without stretching §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 §271(f)(1), is equally applicable
to §271(f)(2). But cf. post, at 1 (STEVENS, J., dissenting) (asserting
“paragraph (2) . . . best supports AT&T’s position here”). While the two
paragraphs differ, among other things, on the quantity of components that must
be “supplie[d] . . . from the United States” for liability to attach, see infra,
at 18, n. 18, that distinction does not affect our analysis. Paragraph (2), like
(1), covers only a “component” amenable to “combination.” §271(f)(2); see supra,
at 9–12 (explaining why Windows in the abstract is not a combinable component).
Paragraph (2), like (1), encompasses only the “[s]uppl[y] . . . from the United
States” of “such [a] component” as will itself “be combined outside of the United
States.” §271(f)(2); see supra, at 12–13 and this page (observing that
foreign-made copies of Windows installed 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 that the outcome might
turn on whether we view the case under paragraph (1) or (2).
17 AT&T has secured patents for its speech processor in
Canada, France, Germany, Great Britain, Japan, and Sweden. App. in No. 04– 1285
(CA Fed.), p. 1477. AT&T and its amici do not relate what protections and
remedies are, or are not, available under these foreign regimes. Cf. Brief for
Respondent 46 (observing that “foreign patent protections are sometimes weaker
than their U. S. counterparts” (emphasis added)).
18 Section 271(f)’s text does, in one respect, reach past the facts of
Deepsouth. While Deepsouth exported kits containing all the parts of its
deveining machines, §271(f)(1) applies to the supply abroad of “all or a
substantial portion of” a patented invention’s components. And §271(f)(2)
applies to the export of even a single component if it is “especially made or
especially adapted for use in the invention and not a staple article or
commodity of commerce suitable for substantial noninfringing use.”
ALITO, J., concurring
SUPREME COURT OF THE UNITED STATES
No. 05-1056
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 the foreign-made computers
involved in this case were “supplie[d]” by Microsoft “from the United States.”
35 U. S. C. §271(f)(1). I write separately because I reach this conclusion
through somewhat different reasoning.
I
Computer programmers typically write programs in a “human readable” programming
language. This “‘source code’” is then generally converted by the computer into
a “machine readable code” or “machine language” expressed in a binary format.
Brief for Respondent 5, n. 1 (citing R. White, How Computers Work 87, 94 (8th
ed. 2006)); E. Walters, Essential Guide to Computing 204–205 (2001). During the
Windows writing process, the program exists in the form of machine readable code
on the magnetic tape fields of Microsoft’s computers’ hard drives. White,
supra,at 144–145; Walters, supra, at 54–55.
When Microsoft finishes writing its
Windows program in the United States, it encodes Windows onto CD-ROMs known as
“‘golden masters’” in the form of machine readable code. App. 31, ¶4. This is
done by engraving each disk in a specific way such that another computer can
read
the engravings, understand what they mean, and write the code onto the
magnetic fields of its hard drive. Ibid.; Brief for Petitioner 4, n. 2.
Microsoft ships these disks (or sends the code via electronic transmission)
abroad, where the code is copied onto other disks that are then placed into
foreign-made computers for purposes of installing the Windows program. App.
31–32, ¶¶5–8. No physical aspect of a Windows CDROM -- original disk or copy -- is
ever incorporated into the computer itself. See Stenograph L. L. C. v. Bossard
Assocs., Inc., 144 F. 3d 96, 100 (CADC 1998) (noting that, within the context of
the Copyright Act, “installation of software onto a computer results in
‘copying’”); White, supra, at 144–145, 172–173. The intact CD-ROM is then
removed and may be discarded without affecting the computer’s implementation of
the code.* The parties agree for purposes of this litigation that a foreign-made
computer containing the Windows code would violate AT&T’s patent if present
in the United States. Pet. for Cert. 42a, ¶5.
II
A
I agree with the Court that a component of a machine,whether a shrimp deveiner
or a personal computer, must be something physical. Ante, at 9-11. This is
because the word “component,” when concerning a physical device, is most
naturally read to mean a physical part of the device. See Webster’s Third New
International Dictionary 466 (1976) (component is a “constituent part:
INGREDIENT”); Random House Dictionary of the English Language 301
(1967) (component is a “a component part;
constituent”). Furthermore, §271(f) requires that the component be “combined”
with other components to form the infringing device, meaning that the component
must remain a part of any. Webster’s, supra, at 452 (combine means “to join in
physical or chemical union”; “to become one”; “to unite into a chemical
compound”); Random House, supra, at 293 (combine means “to bring or join into a
close union or whole”). For these reasons, I agree with the Court that a set of
instructions on how to build an infringing device, or even a template of the
device, does not qualify as a component. Ante, at 9-10.
B
As the parties agree, an inventor can patent a machine that carries out a
certain process, and a computer may constitute such a machine when it executes
commands -- given to it by code -- that 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 question. The
computer would not be an infringing device prior to the installation, or even
during the installation. And the computer remains an infringing device after the
installation process because, 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, whether
on a master disk or by means of an electronic transmission, and eventually
copied onto the hard drives of the foreign-made computers. Once the copying
process was completed, the Windows program was recorded in a physical form,
i.e., in magnetic fields on the computers’ hard drives. See Brief for Respondent
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 unchanged by the copying
process. See Brief for Petitioner 4, n. 2 (citing White, How Computers Work, at
144–145, 172–173). There is nothing in the record to suggest that any physical
part of the disk became a physical part of the foreign-made computer, and such
an occurrence would be contrary to the general workings of computers.
Because no physical object originating in the United States was combined with
these computers, there was no violation of §271(f). Accordingly, it is
irrelevant that the Windows software was not copied onto the foreign-made
computers directly from the master disk or from an electronic transmission that
originated in the United States. To be sure, if these computers could not run
Windows without inserting and keeping a CD-ROM in the appropriate drive, then
the CD-ROMs might be components of the computer. But that is not the case here.
* * *
Because the physical incarnation of code on the Windows CD-ROM supplied from the
United States is not a “component” of an infringing device under §271(f), it
logically follows that a copy of such a CD-ROM also is not a component. For this
reason, I join the Court’s opinion, except for footnote 14.
_________________________
*
In a sense, the whole process is akin to an author living prior to the
existence of the printing press, who created a story in his mind, wrote a
manuscript, and sent it to a scrivener, who in turn copied the story by hand
into a blank book.
STEVENS, J., dissenting
SUPREME COURT OF THE UNITED STATES
No. 05-1056
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 can be made for and against
extending §271(f) to the conduct charged in this case as infringing AT&T’s
patent.” Ante, at 2. Strong policy considerations, buttressed by the presumption
against the application of domestic patent law in foreign markets, support
Microsoft Corporation’s position. I am, however, persuaded that an affirmance of
the Court of Appeals’ judgment is more faithful to the intent of the Congress
that enacted §271(f) than a reversal.
The provision was a response to our decision in Deepsouth Packing Co. v.
Laitram Corp., 406 U. S. 518 (1972), holding that a patent on a shrimp deveining
machine had not been infringed by the export of components for assembly abroad.
Paragraph (1) of §271(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 component
of a patented
invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending thaat such component will be combined outside of the
United States in a manner that would infringe the patent if such combination
occurred within the United States, shall be liable as an infringer.” 35 U. S. C.
§271(f)(2).
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
infringement. It follows that §271(f)(2) would cover the export of an inventory
of such knives to be warehoused until used to complete the assembly of an
infringing machine.
The relevant component in this case is not a physical item like a knife. Both
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 important ingredient of that component is
not also a component. Indeed, the master disk is the functional equivalent of a
warehouse of components -- components that Microsoft fully expects to be
incorporated into foreign-manufactured computers. Put somewhat differently: On
the Court’s view, Microsoft could be liable under §271(f) only if it sends
individual copies of its software directly from the United States with the
intent that each copy would be incorporated into a separate infringing computer.
But it seems to me that an indirect transmission via a master disk warehouse is
likewise covered by §271(f).
I disagree with the Court’s suggestion that because software is analogous to an
abstract set of instructions, it cannot be regarded as a “component” within the
meaning of §271(f). See ante, at 9-10. Whether attached or detached from any
medium, software plainly satisfies the dictionary definition of that word. See
ante, at 9, n. 11 (observing that “‘[c]omponent’ is commonly defined as ‘a
constituent part,’ ‘element,’ or ‘ingredient’”). And unlike a blueprint that
merely instructs a user how to do something, software actually causes infringing
conduct to occur. It is more like a roller that causes a player piano to produce
sound than sheet music that tells a pianist what to do. Moreover, it is surely
not “a staple article or commodity of commerce suitable for substantial noninfringing use” as that term is used in §271(f)(2). On the contrary, its sole
intended use is an infringing use.
I would therefore affirm the judgment of the Court of Appeals.
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**
“Whoever without authority supplies or causes to 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 in whole or in part, in such
manner as to actively induce the combination of such components outside of the
United States in a manner that would infringe the patent if such combination
occurred within the United States, shall be liable as an infringer.” 35 U. S. C.
§271(f)(1).
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