Legal Issues

by Mike Masnick

Supreme Court Agrees To Hear Yet Another Patent Case

from the surprising-interest-in-patent-law dept

The Supreme Court has historically avoided most patent lawsuits, often assuming that they're more business disputes than anything fundamental and constitutional that needed to be reviewed. However, in the last year or so they've been taking a much more active interest in a variety of very interesting and important questions related to patents, from patent obviousness to whether or not injunctions always make sense. At the very least, this should (but doesn't) quiet down those defenders of the patent system who claim that the system works great as is, and people are trying to force changes on it out of the blue. The fact is that the patent system has evolved in many ways (especially in the last few decades), and has strayed a great deal from its original (constitutional) beginnings.

It looks like the Supreme Court has found another such patent case to take a look at -- this time involving a patent dispute between AT&T and Microsoft. The court had asked for more information on this case before, so perhaps it's not a huge surprise. The specific details about the patent have no bearing on the case. Microsoft settled with AT&T on that point and agreed to pay them for infringing on the patent. At issue is whether or not the agreement (which was based on a US patent) then applies to Microsoft software sold outside the US. Microsoft, of course, argues that it does not -- and it certainly raises a lot of questions about jurisdictional issues, especially in an increasingly globalized society. If the court does say that foreign sales are in violation of the patent as well, it could increase the liability for many companies that do business overseas, should they be sued for any kind of patent infringement in the US. It also raises questions about whether or not you could take this to the logical extreme. Say a company patents something in the US, and another company potentially infringes on that patent, but only distributes it elsewhere, where there is no patent. Can the patent owner still sue in the US? What if the infringing party isn't a US company at all?

Reader Comments

Subscribe: RSS

View by: Time | Thread

  • identicon
    Joe Smith, 27 Oct 2006 @ 11:16pm

    Natural consequences

    What the case seems to be about is this: AT&T says that if Microsoft develops infringing software in the US, ships the source code overshore and then duplicates and distributes the software offshore then Microsoft owes damages on world wide sales.

    The problem with this result is that it is basically impossible to know if you are infringing an existing US software patent. Consider the Forgent claims where suddenly Forgent was claiming that it has a patent on jpeg that neither it nor anyone else knew it existed. Or the Silicon Graphics claim against ATI where it claims to have a patent on using floating point arithmetic for graphics (not strictly software but it is an example of how silly the patent system is)

    In that sort of legal environment the flight of software development jobs out of the US to friendlier climes would be inevitable and that is what we are seeing with MSFT ramping up offshore development. If you are going to be supplying the world market with cutting edge software you do not want to do the development in the US.

    The lawyers win and everyone else loses because the Judges are clueless.

    reply to this | link to this | view in chronology ]

  • identicon
    Cixelsid, 28 Oct 2006 @ 12:44am

    Well said.

    Well said, number one.

    reply to this | link to this | view in chronology ]

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Special Affiliate Offer
Anonymous number for texting and calling from Hushed. $25 lifetime membership, use code TECHDIRT25
Report this ad  |  Hide Techdirt ads
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Report this ad  |  Hide Techdirt ads
Recent Stories
Report this ad  |  Hide Techdirt ads


Email This

This feature is only available to registered users. Register or sign in to use it.