That Which we Call a Component by any Other Name Would Still be a Component

In a decision with potentially profound implications for the multi-billion dollar software and "fabless" semiconductor industries, the U.S. Court of Appeals for the Federal Circuit has construed the term "component" in 35 U.S.C. § 271(f) to include software. Eolas Technologies, Inc. v. Microsoft Corp., Case No. 04-1234, 2005 U.S. App. LEXIS 3476 (Fed. Cir., March 2, 2005) (Rader, J).

Although the issue before the Court was one of first impression, it was a simple one: can a software company that designs, develops, tests, markets and supports in the United States a software program that when in operation infringes a patent escape liability under United States patent laws by transferring the step of installing the code onto computer hardware overseas? The Court answered with a resounding no.