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It is a supposed axiom that patents are territorial in nature. U.S. patents are enforceable in the United States, Mexican patents are enforceable in Mexico and Australian patents in Australia. But under the current law of the U.S. Court of Appeals for the Federal Circuit, U.S. patents on software can in some cases reach beyond the U.S. borders and be utilized to obtain damages on software products that are both manufactured and sold overseas. This controversial rule is currently on appeal to the U.S. Supreme Court in AT&T Corp. v. Microsoft Corp., 414 F.3d 1366 (Fed. Cir. 2005), and the outcome is eagerly awaited by the software industry, legal practitioners and scholars alike.

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