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Supreme Court ponders review of AT&T case

More legal woes for Microsoft

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

The Supreme Court is asking President Bush's administration for its opinion on whether to review a patent case between Microsoft and AT&T over audio-compression technology. In a court order filed yesterday, the highest court in the US 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 US 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 US. 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 at 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 US-developed software that is assembled in one country and sold in others will also set a precedent for future cases of a similar nature, Sunstein said. It will considerably raise the amount of the damages the software company must pay in the case, he added.

In an email, 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 US has serious implications for all companies that "develop ideas" in the US.

AT&T spokesman Michael Coe said yesterday via email that the company does not comment on pending litigation.

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