Academic journal article Journal of Corporation Law

Apocalypse Soon: How the Implementation of Web Services Changes the Game for Extraterritoriality

Academic journal article Journal of Corporation Law

Apocalypse Soon: How the Implementation of Web Services Changes the Game for Extraterritoriality

Article excerpt

  I. INTRODUCTION
 II. BACKGROUND
     A. Extraterritoriality and the Enactment of [section] 1(f)
     B. The Evolution of Method and Process Patents Under [section]
        271(f)
        1. Early Cases: Unequivocal Refusal to Include Method and
           Process Patents
        2. The Gradual Broadening of [section] 271(f)
     C. A Return to the Narrowing of [section] 271(f): Cardiac
          Pacemakers
        1. Majority Opinion
        2. Dissenting Opinion
     D. The Future of the Software Industry: Web Services
III. ANALYSIS
     A. Cardiac Pacemakers Majority: Encouraging Infringement Under
        [section] 271(f)
        1. The Majority Opinion Cannot be Reconciled with Eli Lilly
        2. The Concerns of Major United States Software Companies Are
           Not Universal
     B. Cardiac Pacemakers Dissent: The Correct Interpretation of
        [section] 271(f)?
     C. Implications of Cardiac Pacemakers for Web Services
        1. The Importance of Software Patents
        2. The New Problem Presented by Web Services
        3. The Effect on Small Companies and Independent Inventors
 IV. Recommendation
     A. The Necessary Amendment to [section] 271(f)--Explicit
        Protection of Method and Process Patents
     B. Cardiac Pacemakers Dissent--The Necessary Interpretation of
        [section] 271(f)
        1. Protecting the United States Software Industry
        2. Preventing Damage to U.S. Manufacturing
  V. CONCLUSION

I. INTRODUCTION

The purpose of U.S. intellectual property laws was set forth in the Constitution when the Framers gave Congress the power "[t]o promote the Progress of Science ... by securing for limited Times to ... Inventors the exclusive Right to their respective ... Discoveries." (1) However, the ever-growing importance of overseas markets for the software industry has led major corporations to evade these laws. While U.S. patent law largely covers only domestic conduct, there is one exception--35 U.S.C. [section] 271(f)--that allows infringement liability based on the exportation of components of patented inventions for assembly abroad. (2)

Congress enacted [section] 271(f) in a time when the manufacturing of physical products dominated the United States economy. (3) Since then, the focus of the economy has shifted from tangible goods to intangibles, such as software. (4) The rapid rate of innovation in the economy is mirrored in the software industry, whose future lies in the movement away from traditional packaged software towards Web Services. (5) This movement makes the interpretation of [section] 271(f) even more difficult, as future infringement claims will focus on intangible software stored on network servers, rather than physical copies of software alleged infringers ship from the United States.

This Note suggests that [section] 271(f) should protect method and process patents. Part II examines the history of [section] 271(f) and the evolution of courts' interpretations of the statute with respect to method and process patents, and the most recent decision in this area--Cardiac Pacemakers v. St. Jude (6) Part II also addresses the future of the software industry and [section] 271(f)'s new problem--Web Services. Part III addresses how both the majority and dissent of Cardiac Pacemakers will affect extraterritorial patent infringement, what implications they will have for the future of Web Services, and their effect on the ability of small companies and independent inventors to collect damages for infringement of their patents. Finally, Part IV examines how courts and Congress can use [section] 271(f) to protect method and process patents, and why this is particularly important for small companies and independent inventors. In short, this Note addresses why the implementation of Web Services provides the right incentive for courts and Congress to provide more protection for method and process patents under [section] 271(f). …

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