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Justices Request Help in Tech Case

April 25, 2006|From Bloomberg News

The U.S. Supreme Court has asked the Bush administration for help in deciding whether to review a patent dispute between Microsoft Corp. and AT&T Inc. over technology used to improve voice transmissions over the Internet.

The request, directed to U.S. Solicitor Gen. Paul Clement, signaled the justices may have questions about a lower-court ruling that applied AT&T's patent to copies of Microsoft's Windows operating system installed on computers in foreign countries. The court generally heeds the administration's advice on whether to take up pending appeals.

Redmond, Wash.-based Microsoft's appeal seeks to limit the vulnerability of software makers to patent lawsuits for sales outside the country. The software giant contends that software code doesn't fit within the provision in federal law that bars exports of patented inventions without permission.

"This case presents a recurring question of vital importance to the U.S. software industry," Microsoft argued in its appeal, filed in Washington. The lower-court ruling "vastly expands the extraterritorial reach of U.S. patents involving software."

Microsoft is seeking to limit the money it must pay under a 2004 settlement with AT&T, the largest U.S. long-distance phone company. That accord, the terms of which weren't disclosed, would resolve AT&T claims that sought as much as $300 million.

The Software & Information Industry Assn., which represents the software and digital-content industry, joined Microsoft in asking the Supreme Court to take up the appeal.

The case is unrelated to Microsoft's antitrust battle with the European Union. In that dispute, Microsoft began its appeal Monday of an EU order that the company provide a stripped-down version of its Windows operating system.

AT&T urged the justices not to hear the patent case.

"Microsoft's position conflicts with 30 years of patent jurisprudence, business practices in the software industry and Microsoft's own patent portfolio," San Antonio-based AT&T said.

The dispute centers on a way to send voices digitally without making them sound like machines. The technology was developed more than two decades ago.

AT&T says Microsoft lacked permission to use the invention in the NetMeeting and TrueSpeech programs, which are part of Windows. AT&T sought compensation for use from 1999 to 2001, when its patent expired.

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