Microsoft Corporation v. At&T Corp.

550 U.S. 437 (2007)

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Nature of the Case

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Facts

Windows is designed, authored, and tested at D's Redmond, Washington, headquarters. D sells Windows to end-users and computer manufacturers, both foreign and domestic. Purchasing manufacturers install the software onto the computers they sell. D 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 are installed on the foreign manufacturer's computers. These foreign-made computers are sold to users abroad. P's '580 patent is for an apparatus capable of digitally encoding and compressing recorded speech. P sued D for infringement. Windows contains software that enables a computer to process speech in the manner claimed by the '580 patent. Neither Windows software nor a computer standing alone infringes P's patent. Infringement occurs only when Windows is installed on a computer, thereby rendering it capable of performing as the patented speech processor. D stipulated that by installing Windows on its own computers during the software development process, it directly infringed the '580 patent. D acknowledged that by licensing copies of Windows to manufacturers of computers sold in the United States, it induced infringement of P's patent. D denied liability based on the master disks and electronic transmissions it dispatched to foreign manufacturers. P claimed liability under §271(f). D claimed that the foreign-generated copies of Windows actually installed abroad were not 'supplied from the United States. The District Court held Microsoft liable under § 271(f). The Court of Appeals affirmed. The Supreme Court granted certiorari.