The United States Supreme Court sided with Microsoft on Monday in a case that restricts the reach of US patents overseas. In a 7-1 decision, the court found that Microsoft is not liable in a patent dispute with AT&T.
The decision could affect other lawsuits against Microsoft and save the company billions because of the global scope of its operations.
AT&T had sued Microsoft, alleging computers running the Windows operating system infringed on an AT&T technology that compresses speech into computer code.
AT&T said it was entitled to damages for every Windows-based computer manufactured outside the United States, which uses the digital speech-coder system.
Microsoft acknowledged violations in the US regarding the AT&T patent, while insisting the infringement should not be extended internationally.
In a separate unanimous ruling in this area, the justices said that a federal appeals court had gone too far in embracing a standard that has fuelled an era of patent protection.
The court said the federal appeals court applied the test in a manner that is too narrow and too rigid.
The case addresses one of the most basic issues in patent law: how to determine whether a product is obvious and therefore not worthy of a patent.
In the case of KSR International Co vs Teleflex Inc, the US Court of Appeals for the Federal Circuit in the District of Columbia had upheld a patent for adjustable gas pedals. This court hears all appeals in the field of patents.
The legal test at issue in the Teleflex lawsuit has been criticised by the Bush administration as leading to an unwarranted extension of patent protection to claimed inventions that are obvious. Critics of the test say it results in less competition and stifles innovation. Proponents warned that throwing out the standard would upset decades of settled law.
To invalidate a patent, a challenger must show that all parts of a claimed invention were known previously. In addition, the challenger must show that there is a prior ”teaching, suggestion or motivation” to combine these prior technologies to produce the invention. — Sapa-AP