The U.S. Supreme Court has reversed a lower court decision that extended damages to overseas sales of Windows in the aftermath of a successful AT&T infringement lawsuit against Microsoft. AT&T and Microsoft reached an undisclosed settlement for U.S. copies of Windows containing the speech compression technology. AT&T insisted U.S. patent law prohibits companies from shipping component parts overseas for assembly to avoid U.S. patent laws. Microsoft compiles the source code for Windows on a master disk, to be shipped to foreign countries.
"Foreign law alone, not United States law, currently governs the manufacture and sale of components of patented inventions in foreign countries. If AT&T desires to prevent copying abroad, its remedy lies in obtaining and enforcing foreign patents," said Justice Ruth Bader Ginsburg. AT&T argued before the Supreme Court in February that whether Microsoft sends one master disk for later copying on foreign-made computers or 100,000 copies of Windows on separate disks, the end result is infringement. Ginsburg wrote Windows could best be compared to a set of blueprints: "A blueprint may contain precise instructions for the construction and combination of the components of a patented device, but it is not itself a combinable component. The fact that it is easy to encode software's instructions onto a computer-readable medium does not counsel a different answer."