Supreme Court Scolds Microsoft, AT&T Lawyers In Patent CaseSupreme Court Scolds Microsoft, AT&T Lawyers In Patent Case

Broad discussion of patent law at the U.S. Supreme Court will have to wait. Justices last week heard arguments on a case between AT&T and Microsoft that could clarify U.S. patent law's impact on international software sales and development, which could affect where U.S. companies develop code. Most of the questioning, though, centered on debating the definitions of words like code, software, and component.

At issue is AT&T's patent for compressing digitally recorded speech. The central legal question is how to deal with a party that supplies "components" of a patented invention abroad, where they are combined in an infringing way. Microsoft ships software code overseas that gets copied before being installed, in a manner justices say would be infringing had it all taken place on U.S. soil. The question is whether software code is a component of a larger patented process to compress digital speech.

Microsoft and its backers argue an AT&T victory could put U.S. software developers at a disadvantage relative to foreign competitors who operate under more lenient patent regulations. It would "encourage companies to move their software development overseas," says Roger Kennedy, who represents Oracle in a patent coalition of tech vendors.

The court is expected to rule in July. Maybe then we'll get clarity on how patents affect U.S. innovation, and whether reform is needed in the information era.