Page 114 - Intellectual Property Disputes

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." Simply, the court determined,
"[o]ur answer is ‘No.’" fn 9

The Supreme Court recognized that

[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. 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. fn 10

The Supreme Court explained that "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)." Further, the
Supreme Court concluded that "[a]bstract software code is an idea without physical embodiment, and as
such, it does not match §271(f)’s categorization: ‘components’ amenable to ‘combination.’" fn 11 In
clarifying, Justice Ruth Bader Ginsburg remarked, "Congress, 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)." fn 12

Most recently, in June 2018, the Supreme Court ruled in WesternGeco v. ION Geophysical (2018) fn 13
that a company can be liable for lost profit damages if it ships components of a patented invention
overseas to be assembled and sold there. This ruling reverses Federal Circuit rulings to the contrary and
establishes a debate over what level of components are required to be made in the United States to allow
damages to include foreign sales and profits. Expect more cases and arguments to follow regarding what
constitutes "a substantial portion" or which components are "especially made or adapted" as patent
holders seek lost profit damages from foreign sales.

In Voda v. Cordis Corp., fn 14 the Federal Circuit reviewed its jurisdiction over foreign patent claims.
The patents in this matter related to cardiology catheters, and the alleged infringement occurred both
domestically and internationally. Voda held similar patents in each country and sought to consolidate its
worldwide infringement action in the U.S. District Court. The appellate court found that the district
court abused its discretion in its exercise of supplemental jurisdiction. The Supreme Court has noted that
Judiciary and Judicial Procedure, USC 28, Section 1367(c) "reflects the understanding that, when
deciding whether to exercise supplemental jurisdiction, ‘a federal court should consider and weigh in
each case, and at every stage of the litigation, the values of judicial economy, convenience, fairness, and

fn 9 Id.

fn 10 Id.

fn 11 Id.

fn 12 Id.

fn 13 WesternGeco LLC v. ION Geophysical Corp., S. Ct. 16-1011 (2018).

fn 14 Voda v. Cordis Corp., 476 F.3d 887 (Fed. Cir. 2007).

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