Wednesday, February 21, 2007

Oral arguments in Microsoft v. AT&T on Feb. 21

Oral arguments in Microsoft v. AT&T heard on Feb. 21, 2007 were not favorable to the AT&T position.

The transcript of the oral argument may be found here.

On page 3 of the transcript (the first page of actual dialog), Justice Scalia makes the first remark, concerning rumors that a stipulation has already been reached between the parties. Sadly, the transcript refers to this as a "muteness" [sic: mootness] problem. Both Justice Scalia and Justice Kennedy were concerned about this issue. [See also page 51.]

Justice Stevens tried to crystallize the issue: "whether the software is really being copied when it's transferred from the golden disk to the new manufacturer, or whether it's actually being supplied?"

Microsoft's position is that the master disk is NOT a component of the final computers.

In the vicinity of page 10 of the transcript, Mr. Olson is evasive in not answering direct questions. On page 13, Mr. Olson has the memorable line: two plus two equals four can't be patented.

On page 14, Justice Ginsburg referred to the CAFC opinion as ambiguous.

On page 15, Justice Alito suggested Olson's point was an artificial distinction.

Mr. Joseffer explained the limited scope the US government assigns to 271(f). He made clear that 271(f) does not apply to the acts of copying AND selling abroad. He made the point that NO foreign country currently applies its laws in the way AT&T is proposing to apply US law (271(f)) abroad. He also made the point that a foreign country might not grant a patent on something that the US did grant a patent upon [this topic has come up in the patent quality debate.]

At pages 19-20, Justice Breyer chimed in to answer an IP question: Copyright, copyright.

At page 22, the issue of the patentability of software per se arises.

There is an interesting assertion/question on page 24 by Justice Alito: "...the component is the electrons in the hard drive?" [At some point, one might want to review principles of magnetism. The ferromagnetic material in a hard drive gives rise to the ability to store binary information (1's and 0's), and the ferromagnetic material obtains its properties from domains, which do get their magnetism from "electron spin" (electrons have magnetic moments). However, only a fraction of all electrons in the hard drive would relate to the relevant "component." Justice Alito was not on the Supreme Court when Festo was decided, wherein the key technical issue was the magnetizable sleeve, and no justice wanted to talk about the scientific underpinnings of "magnetizable." ]

At page 27, Justice Stevens asks if software is patentable.

At page 30, Justice Breyer refers to the US as having stolen technology for "weaving machines and cotton spinners" from England.

At page 32, one has a discussion of a stream of photons going under the land and under the Atlantic Ocean.

At page 37, one has the statement by Justice Breyer about "I don't see how to decide for you." Justice Breyer is talking about the blueprint/transmitting a patent text analogy.

There's a great line on page 40 about "golden disk"/ Scheherazade. [But see page 51.]

On page 41, the previous "photons" under the Atlantic have become "protons" under the Atlantic.

On page 44, "nobody is paying billions of dollars from an idea."

Patently-O has a discussion of the oral arguments.

One comment of interest to IPBiz was:

First, both sides appear to agree that exporting the Golden Disk is “supplying” under 35 USC 271(f). However, I have to agree with Microsoft, if the Golden Master is never used in a computer then it is not assembled into the invention and thus non-infringing, “standing alone”.

Second, does replication fit the meaning of "or causing to be supplied"? My understanding is that without the Golden Disk, the replication could not occur. Further, the requested replication appears caused by the supplier of the Golden Disk, and the resulting physical object is practically an identical functional copy of the Golden Master. Additionally, no significant transformation occurs since the Golden Master and the Copy are functionally identical.

On the second question I have to agree with ATT, because the ultimately assembled components are functional replicas of the supplied Golden Master, who’s [sic] sole purpose is to make replicated components, (because as Microsoft asserts, “never used in a computer”). Moreover, since the Golden Master has only one purpose, then the supply of the ultimately assembled components was caused by Microsoft.

A recap in light of 35 USC 271(f) (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 non-infringing 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.” [separated at commas for clarity]

I [ee4law] would argue that the result of exporting the asserted single purpose Golden Master and causing replication for assembly is pertinent to the last clause of 271(f)(2), that of “knowing” the Golden Disk is “adapted and” [Microsoft] “intending that such component will be combined”

I rely here on “combined” to incorporate the aspects of replication that have been the focal point for many. Microsoft argues that the replication is part of the assembly process, then based on Microsoft’s assertion “combining’ the Golden Master in the same way within the U.S. would have resulted in infringement. The Golden Master replication would occur first, then replicas assembled into the patented invention.

Therefore, based on Microsoft’s own position, and in light of 271(f)(2), the ATT position appears more persuasive.

post by ee4law


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