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Last Updated: Wednesday, 21 February 2007, 23:32 GMT
Microsoft patent row rumbles on
Microsoft chief Bill Gates
The case centres on Windows software used overseas
A legal row between Microsoft and phone firm AT&T over patent infringements has moved into the US Supreme Court.

Microsoft has appealed against a lower court decision that the firm is liable for infringements overseas.

The group has already acknowledged it violated AT&T's patents on converting speech into computer code and reached a deal on domestic royalties.

The case is a key one because if AT&T wins it could subject other goods sold overseas to Us patent law.

In the hearing US Supreme Court justices expressed doubts over whether Microsoft should be liable for violating patents on copies of Windows sold abroad.

Justice Stephen Breyer said he would be "quite frightened of deciding for you and discovering that all over the world there are vast numbers of inventions that really can be thought of in the same way that you're thinking of this one".

'Component' question

Microsoft argues that it should not be held liable for infringement when software is copied by computer makers overseas.

One of the main points of contention is whether software can be viewed as a component - as AT&T says it should be.

Under current patent laws companies cannot ship components of a patented invention overseas for assembly.

However, Microsoft says its Windows software code - which is supplied to computer manufacturers on master disks - is more like a blueprint or instructions.

The case has implications beyond the technology sector and, depending on the outcome, could encourage US manufacturers to establish more research and development facilities abroad.

Two lower federal courts have previously ruled in favour of AT&T. The Supreme Court is expected to decide the case by July.

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