US software patents under legal scrutiny

On October 31, 2006 we blogged about the case Microsoft Corp. v. AT&T Corp. where the US Supreme Court accepted to hear a case about “extra territoriality” under US Patent Law art. 35 (USC § 271(f). On February 21, 2007, the court heard arguments in this case.
At issue the question: Is there patent infringement liability for the export of unpatented physical components of a patented combination?

In 1984, the U.S. Congress decided that US patent owners should be able to sue for infringement companies that supply from the U.S. components of a US patented invention off-shore for assembly outside the US that would infringe the patent if it occurred in the US. This rule is codified in US patent law as “Section 271(f)”.

The US and European IT industry are closely watching this case, as this might have implications in the US as well as in Europe.

Prof. Pamela Samuelson in her article, discussing this case and its implications, “Legally Speaking: Software Patents and the Metaphysics of 271(f)”, concludes:

“Because of this, it is difficult to believe that the Court would outlaw software patents altogether. But one can always hope. Based on twenty-four years of studying software intellectual property protection, I believe the software industry would be no less innovative and no less competitive in the world market if software patents disappeared tomorrow.”

This should be encouraging for those that have, for the last two years, argued that software patents should be abandoned in Europe all together as they rather stifle than stimulate innovation