Supreme Court ponders review of Microsoft patent case

The opinion of the U.S. government could be the deciding factor on whether the Supreme Court hears an appeal by Microsoft Corp. to avoid paying overseas fines in a patent dispute with AT&T Inc.

The Supreme Court is asking the administration of President George Bush for its opinion on whether to review a patent case between Microsoft and AT&T -- which was AT&T Corp. in 2001 when the case was filed -- over audio-compression technology. In a court order filed Monday, the highest court in the U.S. asked the solicitor general to file a brief expressing the opinions of the government in the case.

The Office of the Solicitor General supervises and conducts federal litigation in the Supreme Court.

The U.S. Court of Appeals for the Federal Circuit in July 2005 upheld a lower-court ruling that Microsoft is liable to pay fines for foreign sales of patent-infringing software even if it was assembled in the U.S. Microsoft now hopes to appeal that ruling to the Supreme Court.

The government's decision has a strong effect on whether or not the Supreme Court will review the case, said Bruce Sunstein, a partner and chair of the patent practice group of Bromberg and Sunstein in Boston. "The views of the solicitor general are often given considerable weight by the Supreme Court," he said.

The ultimate decision on whether Microsoft should pay patent-infringement fines on U.S.-developed software that is assembled in one country and sold in others also will set a precedent for future cases of a similar nature, Sunstein said. It also will considerably raise the amount of the damages the software company must pay in the case, he added.

In an e-mail, Jack Evans, a Microsoft spokesman, said the company is "pleased" that the Supreme Court has taken an interest in the case. He said allowing patent-infringement fines to be levied for overseas sales of products assembled and developed in the U.S. has "serious implications" for all companies that "develop ideas" in the U.S.

AT&T spokesman Michael Coe said Monday via e-mail that the company does not comment on pending litigation.