Late last year, the Supreme Court agreed to hear yet another patent lawsuit, this one involving Microsoft and AT&T. It wasn't a huge surprise that they agreed to hear it, as they had asked for the administration's thoughts on it earlier. At issue isn't whether or not a patent was violated. Microsoft has already admitted that it violated AT&T patents. The issue concerned the scope of the damages, and whether or not Microsoft was also liable for the copies of the software that were installed overseas. Since the patent is just for the US market, Microsoft contends that software outside the US should not be included in the settlement. AT&T, obviously, disagrees, noting that US patent law does not allow an American company to ship "components" overseas to be assembled for the purpose of avoiding US patent law. The lower courts have sided with AT&T, but it certainly sounds like some of the Supreme Court justices are pretty skeptical about AT&T's position, suggesting that it would be frightening to think of the implications of ruling in AT&T's favor, and suddenly kicking off many new patent lawsuits from US companies looking to get paid for the use of patented products overseas. It could effectively make US patent law expand well beyond our borders -- which could also upset governments around the world who don't think it's fair for US patent law to cover products outside the US. However, even more interesting, is how some of the arguments also highlight why software should never have been considered patentable in the first place. Tim Lee walks through the arguments of AT&T's lawyer, and explains why he doesn't seem to know what he's talking about -- while highlighting how the Supreme Court justices seem to recognize the problems of patenting 1s and 0s as a "set of instructions."
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