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A report on Microsoft v. AT&T Supreme Court Hearing
Wednesday, February 21 2007 @ 03:48 PM EST

A Groklaw reader attended the hearing at the Supreme Court regarding Microsoft v. AT&T patent case and was so nice to send us a report of the hearing. Enjoy -- Mathfox

**********

This morning the U.S. Supreme Court heard oral arguments in Microsoft v. AT&T. This is a patent case in which Microsoft has raised two questions in an appeal from a decision of the U.S. Court of Appeals for the Federal Circuit.



In its decision, the Court of Appeals cited an earlier decision in Eolas v. Microsoft in finding that "[w]ithout question, software code alone qualfies as an invention eligible for patenting." (page 3) Neither Microsoft nor AT&T has directly challenged this finding, although it is probably implicit in the first of the two questions presented:

(1) Whether digital software code--an intangible sequence of "1's" and "0's"--may be considered a "component[] of a patented invention" within the meaning of Section 271(f)(1).

As the Software Freedom Law Center has argued in its brief amicus curiae, this finding of "software patentability" would appear to be in conflict with earlier Supreme Court decisions, leading to the possibility that the court might address this matter--potentially leading to the elimination of software patents. Other briefs available on line are Microsoft, AT&T, and the Solicitor General.

I attended this morning's hearing to find out if the question of "software patentability" would be address in the arguments, or more importantly, in the questions from the justices. Chief Justice Roberts opened the session at 10:00am. He introduced guests from the EU, and presided while two opinions were read and over the admission of several lawyers to the Supreme Court Bar. He then left the chamber and Justice Stevens presided over the oral arguments in Microsoft v. AT&T. Ted Olson, former Solicitor General, argued for Microsoft for about 16 minutes, Daryl Joseffer, assistant to the Solicitor General argued for 10 minutes, supporting Microsoft. Seth Waxman argued for AT&T for 30 minutes and then Ted Olson used the remaining 4 minutes to close. The Justices asked many questions, sometimes rather pointed, and usually on point--I think they understand at least some of the issues. The transcript of the arguments is now available here I believe Justice Breyer first raised the question of software patents, and pointed out that the Supreme Court has never agreed that that software can be patented (page 22, line 6)--as FSF pointed out in its brief. The issue came up several more times. What I found most interesting was that both the Mr. Joseffer (page 27, line 17) and Mr. Waxman (page 29, line 10 and page 38, line 25) said that software is not patentable. By directly contradicting the Court of Appeals on the this matter, I wonder if AT&T hasn't seriously undermined its case.

Attending a Supreme Court hearing is an interesting experience, particularly if you have read the questions presented and the merits briefs and understand the issues. If you want to assured of getting in, get there early and be prepared to wait in line--outdoors, rain or shine--for 2 or 3 hours. I found the Visitor's Guide to be quite helpful.


  


A report on Microsoft v. AT&T Supreme Court Hearing | 289 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Possible lose-lose scenario?
Authored by: tknarr on Wednesday, February 21 2007 @ 04:10 PM EST

IANAL, but to me it seems like a lose-lose for Microsoft here. If the Court declares software patentable, AT&T wins their argument on that point. If the Court declares software not patentable, Microsoft wins their case but software patents in the US go *poof*.

[ Reply to This | # ]

Corrections
Authored by: Simon G Best on Wednesday, February 21 2007 @ 04:20 PM EST

Corrections here, if there need be any.

---
"Public relations" is a public relations term for propaganda.

[ Reply to This | # ]

Off-Topic
Authored by: Simon G Best on Wednesday, February 21 2007 @ 04:22 PM EST

Off-topic stuff here, please. Links, and don't forget to preview comments, etc.

---
"Public relations" is a public relations term for propaganda.

[ Reply to This | # ]

On-Topic: More hearing dirt
Authored by: Griffin3 on Wednesday, February 21 2007 @ 04:30 PM EST

h/t to SCOTUSblog, who had a preview of the arguments, and already has the link to the transcript available. Who'd 've thought the legal world would be so in-touch with the Internet?

I haven't read 'em yet, so ...

[ Reply to This | # ]

Software patents are like patenting 2+2=4...
Authored by: myNym on Wednesday, February 21 2007 @ 04:38 PM EST
... and then expecting royalties from anyone who happens to come up with the
correct answer.

(Similarly with regards to "business method" patents, such as the
recently discussed tax strategy patent...)

[ Reply to This | # ]

A report on Microsoft v. AT&T Supreme Court Hearing
Authored by: PolR on Wednesday, February 21 2007 @ 04:44 PM EST
What I found most interesting was that both the Mr. Joseffer (page 27, line 17) and Mr. Waxman (page 29, line 10 and page 38, line 25) said that software is not patentable. By directly contradicting the Court of Appeals on the this matter, I wonder if AT&T hasn't seriously undermined its case.
I wonder if AT&T secretly hopes to nuke software patents with this case. The way I read this brief summary of the case there are three main options for the supremes.

- Software patents should not exist.

- Software patents should exist but you are allowed to bypass them by printing your CDs full of patented software outside the country.

- Software patents should exist and US patent law applies to printing CDs full of patented software outside the country. Then by the same logic other countries patent law would apply in the US as well.

Whatever it is, software patents are either nuked, crippled or compliance is made ludicrously complex. I wonder what AT&T expects to achieve by forcing the Supremes to make such a choice. IANAL and I don't think I really understand what is going on. Anyone care to bring some sanity I may have missed here?

[ Reply to This | # ]

A report on Microsoft v. AT&T Supreme Court Hearing
Authored by: rm6990 on Wednesday, February 21 2007 @ 05:30 PM EST
Ummm....wasn't the whole point of this hearing about whether or not Microsoft
can be held liable for damages resulting from their overseas distribution that
AT&T alleges infringe on patents they hold in the United States? I see
nothing mentioned on this front in the summary....

[ Reply to This | # ]

What if a US resident were to buy one of these foreign made computers?
Authored by: myNym on Wednesday, February 21 2007 @ 06:02 PM EST
What then? Seems that in this global economy, it's pretty hard to determine
where a finished product will end up.

What if the Russian teacher's computers were assembled in a country that had no
copyright law? Or a country that celebrated piracy? Who then broke the law?
The importer?

How is anyone to determine the status of the laws in all the jurisdictions
through which an assembled device may have passed?

(No answers, just questions...)

[ Reply to This | # ]

In some ways, Microsoft v. Microsoft
Authored by: Anonymous on Wednesday, February 21 2007 @ 06:21 PM EST
In some ways this appears to be Microsoft v. Microsoft as it relates to software
patents. If software becomes not patentable, the Microsoft that does not like
being sued wins, but the Microsoft that likes to threaten FOSS loses.

[ Reply to This | # ]

Scenarios
Authored by: Anonymous on Wednesday, February 21 2007 @ 07:24 PM EST
This transcript is one of the most difficult things to read and follow as I have
ever read.

In terms of patents in general, I have some questions:

Lets say there is a patent for a shovel in the shape of a tee. It looks like a
standard shovel, but it has a crossbar on the end of the shovel.

Now, when am I breaking the law (assume this is all US with a US patent):

If I build a shovel with a crossbar as described in the patent?
If I buy a shovel and add a crossbar?
If I build a crossbar and a shovel separately and sell them with instructions to
place the crossbar on the shovel?
If I build a crossbar and sell the crossbar with instructions and the user
provides their own shovel?

[ Reply to This | # ]

Thank you unknown Groklaw reader..
Authored by: Latesigner on Wednesday, February 21 2007 @ 07:36 PM EST
Thank you whoever you are!
This was something I was really curious about.

---
The only way to have an "ownership" society is to make slaves of the rest of us.

[ Reply to This | # ]

Bonding with a machine
Authored by: SpaceLifeForm on Wednesday, February 21 2007 @ 08:06 PM EST
JUSTICE SCALIA: You can't patent, you know, on-off, on-off code in the abstract, can you?

MR. OLSON: That's correct, Justice Scalia.

JUSTICE SCALIA: There needs to be a device.

MR. OLSON: An idea or a principle, two plus two equals four can't be patented. It has to be put together with a machine and made into a usable device. The bind that AT&T is in here is that the components that make the machines run that are produced abroad are not supplied from the United States. They are made in Belgium or Frankfurt or something.

I believe that argument will come back to haunt Microsoft. Trying to argue that it's not an illegal copy because you put it on a harddrive made outside of the U.S. is just not going to fly.

---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

Cynic that I am - This dispute has been set up between friends.
Authored by: Brian S. on Wednesday, February 21 2007 @ 08:33 PM EST

ISTM that since some time around the mid-nineties it is easy to find linkage and some common cause between Microsoft and AT&T.

Therefore, maybe this apparent fight in the Supreme Court is desired by both sides, the Courts and the Government.

Fears over reach of US patent law

Several justices of the US Supreme Court on Wednesday expressed concern about the risks of extending the reach of US patent law to other countries, as they struggled to find a way to bring the law into the digital age.....could have big implications for new technology industries such as software and biotechnology....

"We need a global patent system, and that requires each country to have a healthy respect for its borders," said Brad Smith, general counsel of Microsoft. However, Seth Waxman, AT&T's attorney, said that in a digital world, where borders are increasingly porous, Microsoft's overseas shipments effectively stripped AT&T's patent of all value....An attorney for the Bush administration told the court such a result would anger foreign governments, whose own patent laws should apply on their territory.... Finacial Times



They all realise the question must be answered BEFORE any change to the US software patent system.

Sentiment is all with the Microsoft cause. I do believe that they will win, but having prevented US patent law from impacting the rest of the world, the system has total freedom to do whatever within US borders.

Is that good or is that bad?



Brian S.

[ Reply to This | # ]

ATT has a point
Authored by: Anonymous on Wednesday, February 21 2007 @ 11:52 PM EST
Even though I believe that any kind of patents is a detriment to progress and software patents are just the most egregious in that respect, as long as the patent law exists, ATT has a point.

Note, that the patent in question is not a software patent. ATT's patent is patent for a better telephone. It turns out that that patent can be practiced by combining Windows OS, and a Windows program with some hardware to make a telephone.

You cannot make such a telephone in the US even for export. You cannot circumvent that restiction by manufacturing parts in the US and shipping them for assembly abroad. What is important here is where the substantial manufacturing steps leading to a product covered by the patent take place.

In the case at hand, the invention is unquestionably practiced in the US. Most of the effort leading to the final product goes into writing the source code for the software component and this is done in Redmond, WA. The remainder of the manufacturing process is trivial compared to this.

From the economic perspective Microsoft is selling telephones covered by ATT patent in Germany while spending 99% of manufacturing cost in the US. (The only difference with the shipping parts for assembly case is that the bulk of per-unit cost is ammortization of the development effort.) Moreover, the patented idea enables code writing, the manufacturing step that happens on the US soil.

[ Reply to This | # ]

A report on Microsoft v. AT&T Supreme Court Hearing
Authored by: Anonymous on Thursday, February 22 2007 @ 02:03 AM EST
This an answer I'll be waiting for.

I'm not smart enough to say what my concerns are in a short amount of space
with the likely hood that I will be understood. But I will try:

I am worried if I would be able to use a computer to do
everything I would expect it to do when I bought it in 1991.
I had a sound blaster sound card installed. (I did not own the compute in 1989
when the first sound blaster came out).

As I am wondering if as I read the brief. if all that is needed is a computer
with 'some' software, with a microphone and speaker. (Every general purpose
computer now fits this description) to infringe a 'patent'.

Now if I install a compiler on the computer with a set of development tools. (If
what software I have installed on my computer is the difference between
infringing and not infringing). How am I to 'know' when that line is crossed if
I start developing software.

Suppose someone tells me about an idea (or someone says something which gives me
an Idea or someone tells me what is in a patent application without telling me
it is from an issued patent). I code it up, debug it and get it to work. How do
I know I can use it. If I can not, there seems something very unfair about this.


Contray to what is said in the brief. There is a technology which would have the
same 'problems' as computers with regard to 'information' That is the tape to a
player piano. The tape has the information of the song encoded on it when placed
in a player piano will cause the song to be played. Someone sueing for copywrite
infringement would have the same problem with someone exporting the tape. But
that means AT&T would have to have a copywrite not a patent.

(The stipulation in this case while appearing to simplify the case maybe just
confining the terms of the legal question these companies want answered.What is
strange is it quotes from EOLS which had its patent re-examined and as I
understand it lost as a president)

There is nothing that prevents someone from making a machine that when you
insert cd and attach a hardrive in a usb-inclosure will automaticly copy the cd
to the hard-drive. That is not even a hard thing to do from a programming
perspective. The software on the 'cd' seems very much like the player piano
example above.

The tape (or what is encoded on the tape) is an essential part to causing
infringement.

There is a real problem here that I do not know (what the 'law' would consider
to be the answer) the answer too yet. I owned a computer with a speaker in 1991
with a mic. 1991+20 = 2011. (but really the time line would be 1989+20 =2009
(for patent expiration). --Sound baster made their first card in 1989. However I
played with mic and speaker connected to a computer before 1981. So that puts
the date at 2001 in the past).

(The abstract problem is: Am I only not infringing if I do not have a certain
order of bits stored in my computer when I turn the computer on).

Am I safe from all 'patents that involve a computer, a speaker and microphone or
not?

I'm not going into details here but many possible set of rules from the court
lead to what I would consider nonsensical results or worse imposable results. (I
do not believe I am streaching words here). If I want to follow the law, I care
how the supreme court rules, but what happens if in order to follow the rules, I
have to go broke trying and still can not follow the rules? That seems very
unfair.

Like I said, I am not smart enough to say what I want to say in a few words.

a florida resident.

[ Reply to This | # ]

A report on Microsoft v. AT&T Supreme Court Hearing
Authored by: Anonymous on Thursday, February 22 2007 @ 03:15 AM EST
Okay, it's really late - and I'm in-between sleep here - but didn't Steve
Ballamer (MS) _JUST_ accuse (No, declare) Linux violates MS patents?...(again)

And it seems here MS is arguing that software is not patentable?

Wouldn't something be in conflict there? If MS is arguing to the courts that
software patents are not valid -- yet then publicly claiming Linux violates MS
IP (patents) -- would that not at the VERY least be defamation?

[ Reply to This | # ]

Torrent of iowaconsumercase website still going
Authored by: Anonymous on Thursday, February 22 2007 @ 06:37 AM EST
and it always could use some more downloads I'd guess :-)

http://thepiratebay.org/tor/3620152/iowa

It is more complete than Grouch's mirror, too.

[ Reply to This | # ]

No software patent?
Authored by: Anonymous on Thursday, February 22 2007 @ 09:22 AM EST
Apparently, Microsoft has stated that "An idea or a principle [such as] two
plus two equals four can't be patented".
(http://www.betanews.com/article/Supreme_Court_Debates_Patentability_of_Software
/117209739)

Aren't they saying that software can't be patented? Oh how I miss PJ to
elaborate on such comments.

[ Reply to This | # ]

Did MS distribute the patented item?
Authored by: Anonymous on Thursday, February 22 2007 @ 10:48 AM EST
I don't think so, since AT&T's lawyer has stated that software by itself
cannot be patented, and all MS distributed was software. It was the customers in
the foreign countries that combined the software with a physical device to make
an instance of the patented item, which was not patented in that foreign
country.

[ Reply to This | # ]

Is software a component?
Authored by: stites on Thursday, February 22 2007 @ 01:50 PM EST

"(1) Whether digital software code--an intangible sequence of "1's" and "0's"--may be considered a "component[] of a patented invention" within the meaning of Section 271(f)(1)."

Microsoft raised the contention that software is not a part in order to cut off AT&T's argument at its base. The original court decision allowing software to be patented was based on the logic that the software in question was an integral part of a computerized control device and was patententable as part of that device. Microsoft is arguing that their software is not part of a device and therefore is not patentable. Thus we get the following oral argument where Mr. Joseffer says that stand alone software is not patentable.

  • "JUSTICE STEVENS: Your time is up, but I want to ask you one yes or no question. In your view is software patentable?
  • MR. JOSEFFER: Standing alone in and of itself, no. ...
  • MR. WAXMAN [For AT&T]: The code is not patentable."
    •

The really wierd thing is AT&T saying the code is not patentable. By saying that AT&T is destroying their entire case by saying that their software patent is not legal.

On the face of this snippet of oral argument it appears that both sides to this lawsuit agree that software is not patentable. The Supreme Court could quite possibly declare software is not patentable, although the ruling might apply only to software which is not a part in a physical device (which probably includes all software because I don't think that there is such a thing as software which is part of a physical device).

"As the Software Freedom Law Center has argued in its brief amicus curiae, this finding of "software patentability" would appear to be in conflict with earlier Supreme Court decisions, leading to the possibility that the court might address this matter--potentially leading to the elimination of software patents. "

The Supreme Court does not necessarily have to pay any attention to amicus curiae briefs. The fact that both Microsoft and AT&T are arguing that some or all software is not patentable means that the Supreme Court is more likely to take the Software Freedom Law Center amicus curiae brief into consideration.

-----------------------
Steve Stites

[ Reply to This | # ]

Is software a component?
Authored by: Anonymous on Thursday, February 22 2007 @ 06:46 PM EST
JUSTICE STEVENS: But do you -- what is your view on whether or not software is a component?

This is the heart of why software patents exist in the first place. It comes from the misunderstanding of what software actually is.

Software is not a component, it is actually a set of instructions that a component follows. The instructions are contained in a component - a disk - a tape, and they are needed for proper functioning of that component, but they in themselves are not a component. They cannot perform any functions by themselves.

Someone needed to explain "software" and "components" using the analogy of a book and written works.

The story of "Oliver's Travels" is a series of events that the reader follows.

The "reader" is a computer.
The written story of "Oliver's Travels" is software.
The book the story "Oliver's Travels" was written on is the storage component.

The book is covered by Patents.

The story is covered by Copyright.

so

The storage component is covered by Patents.

The software is covered by copyright

In the same way that "Oliver's Travels" can be written in German, Itallian, or English, software can be written in source, x86 machine, or 68000 machine code.

Someone needed to say this - and make this analogy to the Justices ......

[ Reply to This | # ]

Microsoft loses one round -- but so do we
Authored by: ansak on Thursday, February 22 2007 @ 08:06 PM EST
Well... it looks like the court has upheld some level of software patents. Microsoft may eventually be $1.5B poorer but I can see saliva dripping at all the further OpenSource patent-infringement FUD yet to come. :(

cheers...ank

[ Reply to This | # ]

What if Microsoft "Rolled Over"
Authored by: Anonymous on Friday, February 23 2007 @ 12:30 PM EST
Here's another possibility - And one i have seen used in the software industry
before -

Maybe Microsoft set this up so they could lose the case and thus strengthen the
idea of software patents. They now have a precedent that they could use against
someone else. The normal way is to find a stuge you can sue for infringement and
have them lose their case and your company absorbs them and uses the precedent
to block everyone else.

Did Microsoft lose this one on purpose?

P. Cook

[ Reply to This | # ]

Washington Post Article
Authored by: RFD on Friday, February 23 2007 @ 01:36 PM EST
The Washington Post had an article yesterday on this case that I thought was unusually good.

---
Eschew obfuscation assiduously.

[ Reply to This | # ]
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