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

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



A significant case has reached the​ U.S. Supreme Court that on​ the​ surface could expose high-tech companies to​ greater liability for patent infringement in​ regard to​ certain products assembled and sold overseas. However,​ based on​ the​ tenor of​ the​ comments and questions by a​ majority of​ the​ Justices of​ the​ Court during oral arguments,​ it​ appears that there will be no major 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 produced and sold in​ the​ U.S. would constitute actionable patent infringement with no negative consequences. However,​ all of​ this may change when the​ U.S. Supreme Court hands down a​ decision in​ the​ seminal case of​ Microsoft Corporation v. AT&T Corp. the​ issue in​ this case is​ the​ actual scope of​ the​ exception to​ the​ rule imposing liability for patent infringement. That exception had permitted an​ entity or​ individual to​ avoid a​ patent infringement suit components for a​ patented invention were supplied to​ an​ assembler in​ another country,​ provided the​ final product was sold in​ another country.

AT&T is​ arguing in​ the​ case before the​ nation's highest court that Microsoft is​ doing just that by causing that company's digital speech processor technology to​ be assembled and sold in​ another country. Microsoft is​ countering that no component as​ contemplated by the​ law is​ involved. Rather,​ Microsoft contends that only instructions directing the​ computer how to​ perform the​ digital speech processing are included in​ the​ Microsoft package being assembled and sold overseas. Microsoft maintains that AT&T needs to​ obtain foreign patents to​ protect its interests.

During oral arguments before the​ U.S. Supreme Court,​ Justices Souter and Bryer both expressed concern that a​ ruling in​ favor of​ AT&T would expose many high-tech enterprises to​ liability under the​ U.S. patent infringement laws.

The only apparent support for AT&T's position during the​ oral arguments before the​ U.S. Supreme Court came from Justice Kennedy. He said that he did have sympathy for the​ AT&T position regarding the​ component issue that was raised before the​ Court. the​ Chief Justice has recused himself from the​ case.

If you​ are interested in​ keeping abreast of​ the​ latest developments in​ the​ world of​ business,​ finance and the​ internet,​ you​ can easily sign up to​ receive our alerts and legal updates that we provide with regularity. Subscribe to​ our alerts and legal updates today to​ keep up to​ date on​ all of​ the​ important issues that effect your life and your business.




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