infringe the patent if such combination occurred in the United States, shall be liable as an infringer.

Section 271(f) defines a basis for both inducement (paragraph 1) and contributory (paragraph 2) infringement of a U.S. patent where only a part of the claimed invention is supplied “in or from the United States”. Under paragraph 1, where most but not all of the patented invention is supplied from the U.S. to a foreign country, and there is an active inducement to complete the claimed invention abroad, there may be an indirect infringement. Using standards similar to those found in Section 271 (c), paragraph 2 establishes a basis for indirect infringement where a material item is shipped outside the U.S. for combination in a manner that would otherwise directly infringe if in the U.S., subject to the requisite knowledge requirement. Clearly, the transmission of software and even information to foreign customers from the U.S. may fall under these provisions. The extent to which the U.S. law may be extended to cover E-commerce export activities still remains to be decided. However, this provision does offer a significant tool for non-U.S. companies to prevent infringement of U.S. patents by entities in the U.S. who ship only parts of a protected invention outside of the U.S.

Section 271 (g)

Whoever without authority imports into the United States or offers to sell, sells or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell sale or use of the product occurs during the term of such process patent….,

This section was added by the Process Patent Amendment Act of 1988 in an effort to extend the reach of the U.S. patent law to countries where processes protected by U.S. patents are utilized without authorization to produce “products” for import into the U.S., even where those products are not themselves patented. The mere offer for sale of such product, or its import results in an infringement. In the E-commerce environment, where the patented process or business method is practiced outside of the U.S. and the result is information, data, rights in intangible property (stocks) or even money, the question not yet addressed by the courts is whether this section of the statute would be interpreted such that there is an infringement if such products are brought into the U.S. As in the past, this provision may offer a threat to non-U.S. origin E-commerce, but also may offer an opportunity to prevent infringement of patents held by entities around the word.

Territorial Aspects of Enforcement

The principles of patent law throughout the world are based on an assumption that the enforceable rights are limited to the territory of the granting country. Sections 271(a) and 271(c) are consistent with that assumption. However, the provisions of Sections 271(b), 271(f) and 271(g) are exceptions to this general rule and at least contemplate the extension of the U;S. patent law beyond its national borders, into the sovereign jurisdiction of other nations who have their own patent laws. As previously demonstrated, these five sections of the U.S. patent law may have important ramifications with regard to business methods that are practiced abroad but reach into the U.S. through the Internet. Where U.S. patents exist on those business methods, a significant offensive and defensive advantage can be obtained by the patent proprietor.

VIII. Conclusions

The SS Business Methods has set sail. The waters are still uncharted, and the fare is substantial. Nonetheless, it is not too late to get on board, if the promise of offensive and defensive strategic advantage in the U.S., and undoubtedly elsewhere in the future, is at all attractive. Where a business is certain to focus on the U.S. as a market for its core business, or where the depth of a patent portfolio will be enhanced by the addition of protection for new business methods employed in current or future strategies, the need to consider protection for BM inventions through the patent system is compelling. On the basis of timely and honest in-house analysis and planning, and with the assistance of competent legal counsel, a serviceable strategy to at least evaluate the opportunities for protecting core business ideas, particularly if they are computer or internet based, can be achieved. However, it is imperative to act promptly, lest the opportunity and advantage be taken by the competition, and you are left to say only that --- you “missed the boat.”