Software Firms Face Threat Of Patent Infringement Suits For Overseas Sales: But Is It Serious

A important case has reached the U.S. Supreme Court that on the surface could expose high-tech businesses to greater liability for patent infringement in regard to certain merchandise assembled and sold overseas. Even so, based on the tenor of the comments and queries by a majority of the Justices of the Court in the course of oral arguments, it seems that there will be no key shift in policy in regard to patent infringement when a product is assembled and sold off the shores of the United States.

Historically, U.S. companies could escape liability for manufacturing and selling products that made and sold in the U.S. would constitute actionable patent infringement with no negative consequences. Nonetheless, all of this may possibly change when the U.S. Supreme Court hands down a decision in the seminal case of Microsoft Corporation v. AT&T Corp. The problem in this situation is the actual scope of the exception to the rule imposing liability for patent infringement. That exception had permitted an entity or person to steer clear of a patent infringement suit elements for a patented invention had been supplied to an assembler in yet another nation, offered the final product was sold in another country.
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AT&T is arguing in the case just before the nation's highest court that Microsoft is performing just that by causing that company's digital speech processor technologies to be assembled and sold in an additional country. Microsoft is countering that no component as contemplated by the law is involved. Rather, Microsoft contends that only instructions directing the personal computer how to perform the digital speech processing are integrated in the Microsoft package being assembled and sold overseas. Microsoft maintains that AT&T demands to obtain foreign patents to safeguard its interests.

In the course of oral arguments prior to the U.S. Supreme Court, Justices Souter and Bryer each expressed concern that a ruling in favor of AT&T would expose many high-tech enterprises to liability beneath the U.S. patent infringement laws.

The only apparent support for AT&T's position in the course of the oral arguments ahead of the U.S. Supreme Court came from Justice Kennedy. He mentioned that he did have sympathy for the AT&T position relating to the component concern that was raised prior to the Court. The Chief Justice has recused himself from the case.

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