Opinion ID: 210050
Heading Depth: 3
Heading Rank: 5

Heading: Adjustment of Damages under Microsoft v. AT & T

Text: Microsoft argues that any damages award to Amado must be adjusted in light of AT & T. AT & T, which was decided by the Supreme Court after the parties filed this appeal, held that liability under 35 U.S.C. § 271(f) does not extend to the installation of software onto a computer abroad when the copies of that software are made abroad, because in such case the copies are not supplied from the United States within the meaning of the statute. 127 S.Ct. at 1756, 1757. Consequently, Microsoft argues that [a]ny damages awarded to Amado should . . . be limited to products manufactured or sold in the United States. Amado counters that Microsoft failed to appeal liability under § 271(f) in Amado I, and thus its liability is cemented by the mandate rule. We first address Amado's contention that the mandate rule precludes Microsoft from receiving the benefit of the AT & T decision. As previously noted, the mandate rule forecloses reconsideration of issues implicitly or explicitly decided on appeal. Engel Indus., 166 F.3d at 1383. The mandate rule does not, however, affect issues that have been explicitly reserved or remanded. Id. Microsoft's request for application of the AT & T decision does not relate to the damages award for pre-verdict infringement, which we affirmed in Amado I. Rather, Microsoft seeks to have the decision applied only to the district court's March 13, 2007 award for post-verdict sales. That issue was not addressed by the Amado I panel and was, in fact, specifically reserved for the district court on remand. See Amado I, 185 Fed. Appx. at 953. Consequently, the issue is not foreclosed by the mandate rule. It is well-settled that [w]hen [the Supreme] Court applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate [] announcement of the rule. Harper v. Va. Dep't of Taxation, 509 U.S. 86, 97, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993). Although we conclude, pursuant to Harper, that Microsoft is entitled to assert the AT & T decision, we are unable to determine whether the infringing products sold by Microsoft were provided in such a way as to not be supplied from the United States as required to extinguish § 271(f) liability. The district court, which presided over the trial in this matter, is thus better-suited to decide the applicability of AT & T, and may do so when it reconsiders the proper disbursement of funds from escrow on remand.