US Supreme Court Will Hear Microsoft v AT&T Patent Dispute

By deciding to hear the patent infringement case Microsoft v AT&T, the US Supreme Court has set the stage for a possible outcome that could extend the reach of US patent law to include foreign activities. Microsoft Inc (Microsoft) exported copies of its Windows operating system software from the US to foreign computer manufacturers. Those manufacturers installed Windows on computers which were sold outside the US. However, Microsoft Windows contained speech encoding and compression software which is the subject of a US patent owned by AT&T Corp (AT&T). 35 USC §271(f) prohibits the export from the US of components of patented inventions to be assembled elsewhere and holds an exporter of such components liable for patent infringement. The Trial and Appeal Courts found that foreign-made copies of AT&T's US-patented software sold outside the US infringed AT&T's patent. Microsoft was held liable for damages resulting from the foreign sales. Microsoft claims that the ruling in its current form could impose substantial liability on US software companies and could force many of them to locate R&D jobs overseas. Meanwhile AT&T's lawyers stated, "… [C]ongressional authority is [designed] to protect the rights of U.S. inventors, not U.S. infringers." The US Department of Justice (DOJ) filed an amicus curiae brief supporting Microsoft's request for the Supreme Court to hear this case. According to the DOJ, AT&T should obtain and enforce foreign patents instead of extending US patent law overseas. The DOJ brief argues that the decision as it now stands "improperly extends United States patent law to foreign markets and puts United States software companies at a competitive disadvantage vis-a-vis their foreign competitors in foreign markets." For more information see: http://news.lp.findlaw.com/ap/f/66/10-27-2006/691d0011c6dd991d.html; http://www.patentlyo.com/patent/2006/10/supreme_court_l.html; and http://www.usdoj.gov/osg/briefs/2006/2pet/6invit/2005-1056.pet.ami.inv.pdf Summary by: Andrei Edwards