[10] In October 2006, the Supreme Court finally agreed to address the conflicting case law surrounding § 271(f) by granting a writ of certiorari.

Judge Rader expressed concerns that such an interpretation was an impermissible “extraterritorial expansion” of U.S. patent law because it reached copying activity overseas.

Therefore, Justice Ginsburg argued that the Windows software must be encoded or expressed in some sort of tangible medium, in order to be considered as a "component" under § 271(f).

[1] According to the reasoning above, the Court ruled that software code did not qualify as a component for purposes of triggering liability under § 271(f) and the copies installed onto the computers sold abroad were not considered as "supplied" by Microsoft from the United States either.

[1] As for this case, once the copying and installation process were completed, the Windows program was recorded in a physical form in magnetic fields on the computers' hard drives.

[1] Since no physical object originating from the United States was combined with those computers sold abroad, Justice Alito believed there was no patent infringement within the meaning of § 271(f) and it was irrelevant whether the Windows software was installed directly from the master disk or not.

[1] In addition, he argued that the abstract software code, whether embodied in a physical medium or not, should be considered a “component” within the meaning of § 271(f) because it had no other intended use except for installation onto a computer's hard drive.

[1] Based on these reasons, Justice Stevens explained that he would affirm previous Federal Circuit's majority opinion in this case.

These interested parties, including law professors, the Department of Justice, and some software companies, submitted amicus briefs on behalf of AT&T and Microsoft.

[13] Microsoft had gained broad support in its defense efforts from the Bush administration, Amazon.com Inc., Intel Corp., Yahoo Inc., and also from industry groups such as the Business Software Alliance and the American Intellectual Property Law Association.

[14] One big concern from these Microsoft supporters was that a decision in favor of AT&T could have put the U.S. Patent and Trademark Office into the role of an arbiter of intellectual property worldwide and pushed software prices higher,[14] which could potentially lead to substantial losses of competitive advantage of U.S. manufacturers in foreign markets.

[15] On the other hand, while the Supreme Court's conceded that their decision may effectively created a “loophole” for software companies to avoid liability under § 271(f),[1] they still rejected the Federal Circuit's broad interpretation of Section § 271(f) as it would have increased the number of products sold abroad within the reach of US patent laws, which may introduce inevitable conflict of different patent systems and standards in different countries.