"(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." AT&T argue that their patented invention relating to computer speech algorithms is infringed by software included within Microsoft's Windows operating system. The key point is that AT&T claim damages not only for infringement within the US, but also for infringement wherever Windows is sold outside the US, since Microsoft have supplied "components" abroad (master copies of the operating system) to others, who have then incorporated these components into a product (i.e. a computer with Windows installed on it).
(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.
The IPKat awaits the outcome of this argument with interest, and would not like to bet on which way it is likely to go. There are arguments about whether applying s.271(f) effectively extends US jurisdiction beyond the boundaries of the US, but on the other hand the wording of the law appears to be reasonably clear. There is no equivalent UK (or, to this Kat's knowledge, other European) provision to s.271(f), the nearest provision in the UK being section 60(2) of the Patents Act. This UK provision (as interpreted according to Menashe v William Hill) only applies where the extraterritorial act results in putting "the invention into effect in the United Kingdom". The same argument could not therefore apply over here. Would it be fair if a US court were to rule on damages for acts that might properly fall under the jurisdiction of a UK court?
Postscript (22 February): Patently-O now has extracts from a transcript of the oral arguments, which make for interesting, though not necessarily very illuminating, reading.