'Marketplace' Report: Microsoft Patent Dispute The Supreme Court ruled in favor of Microsoft in a patent dispute Monday. AT&T had sued Microsoft for international damages, claiming that the Windows operating system infringed on their patent for technology that turns speech into computer code.
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'Marketplace' Report: Microsoft Patent Dispute

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'Marketplace' Report: Microsoft Patent Dispute

'Marketplace' Report: Microsoft Patent Dispute

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MADELEINE BRAND, host:

From NPR News, this is DAY TO DAY.

The Supreme Court today issued a big business decision. It involves two big businesses, Microsoft and AT&T. The court ruled seven to one in favor of Microsoft in a patent infringement case.

Steve Tripoli is here for MARKETPLACE. And Steve, tell us what this is all about.

STEVE TRIPOLI: Well, Madeleine, this is about whether part of Microsoft's Windows software - that's the stuff that runs most of our computers - infringes on an AT&T patent for a technology that turns speech into computer code. Now, Microsoft admits violating that patent here in the United States, but AT&T wanted damages for what happens outside the country, too.

BRAND: And they didn't get that, I guess.

TRIPOLI: Right, which makes this a win for Microsoft. They don't have to pay damages for their giant overseas sales of Windows.

BRAND: All right. Well, why is this important to you and me, to the little guy?

TRIPOLI: Well, first of all, because it relieves companies like Microsoft that face these questions from paying costs that inevitably make their way back to us consumers. That does not mean that Microsoft can just run around doing all kinds of patent infringing either, however, and there's been a lot of that going on now, at least alleged, lately.

BRAND: Well, why is that? What's going on there?

TRIPOLI: Well, you know, just a month ago, Microsoft suffered a $1.5 billion jury verdict in San Diego concerning digital music technology. What's going on is that their software does so many things that folks are always on a lookout for whether it steps over the line into another product's patent. And, of course, Microsoft is rich, so they're the ones to sue in cases like this.

BRAND: Yeah, so I'm wondering, are they really doing all this bad stuff, squeezing out other inventors, or people are just going after them because they're Microsoft and they have very, very, very, very deep pockets?

TRIPOLI: Yeah. You anticipate just the question I asked John Bringardner, who covers patent law cases for IP Law and Business magazine. Here's what he said.

Mr. JOHN BRINGARDNER (Correspondent, IP Law and Business Magazine): It's somewhat in the middle. Most would argue that they're big enough that it's a possibility that this is getting through somehow. But they are also deep-pocketed and therefore the target of lots of companies hoping to strike it rich.

TRIPOLI: So, yeah, they bear watching, Madeleine, but they also attract their share of opportunistic lawsuits.

BRAND: And what does this mean for consumers?

TRIPOLI: Well, it means that companies like Microsoft can breathe a little easier and be a little freer about what they bring to the software markets. But I'll tell you, there was another case today in the Supreme Court. This wasn't all the Supreme Court had to say about patents. In this other case they made it easier to challenge patents that fail to introduce genuine innovations, in other words, patents that are too much like existing products. And critics of that rule - and this is where you and I come in - they're howling that this is going to stifle innovation or what they see as small but meaningful improvements in products. But backers of the rule are going to cheer what they see as further protection for older bright ideas.

BRAND: So in the long run do we win or lose as consumers?

TRIPOLI: It kind of depends on how you personally view innovation: is it advancement that matters to you, or is it just a way of copycatting something that's popular? And, you know, it's funny because the business world was all over the place on this one on both sides of the case. The drug and biotech companies don't like the ruling. They say it'll stifle advances. Old companies with a lot of patents, like 3M and General Electric and Procter and Gamble, they took the opposite side.

BRAND: Well, thank you, Steve. Steve Tripoli of public radio's daily business show MARKETPLACE, and that's produced by American Public Media.

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