Wading into a complex spat between Microsoft and AT&T, U.S. Supreme Court justices on Wednesday voiced skepticism with a prior reading of patent law that American software companies argue could place them at a global disadvantage.

The conflict centers on part of a U.S. statute that restricts American companies from shipping "components" made in the United States to foreign manufacturers, which could combine them to make a machine that infringes on U.S. patents. The statute does not stop them from sharing design plans that would spawn an identical product.

The U.S. software industry fears that a ruling against Microsoft could expand its vulnerability in patent infringement suits compared to global rivals and make it more attractive to locate its research operations abroad. AT&T, on the other hand, says software companies need only worry if they're committing infringement in the first place.

During hour-long oral arguments, some justices pressed AT&T attorney Seth Waxman, a former Solicitor General of the U.S. Department of Justice, to explain why Microsoft is supplying anything more than a blueprint when it ships software object code on "golden master discs" to foreign manufacturers for duplication and installation on individual machines.

"A machine in Europe is following instructions just the way an artisan would follow a blueprint," Justice David Souter said to Waxman. "What's the difference?"

Related News:

• Microsoft Statement on U.S. Supreme Court Hearing
• Transcript (PDF format)