In a ruling which limits the overseas reach of U.S. patents, the United States Supreme Court today sided with Microsoft, overturning a lower court’s decision that would have held the software giant liable for patent infringements contained in copies of Windows sold outside the United States.

Microsoft had previously acknowledged its Windows operating system violated an AT&T patent on technology which digitizes and compresses speech; the companies came to a settlement on most matters in the case back in 2004. However, one point crept its way up through the appeals process, and finally reached the Supreme Court. Now, in a 7-to-1 ruling, the Supreme Court has found that Microsoft does not have to pay AT&T damages for copies of Windows sold (or pre-installed on computers) sold outside the United States whihc violated the AT&T patent.

The decision could have a significant impact on other lawsuits against Microsoft and other technology companies with global operations, and save the companies billions of dollars in damage claims stemming from patent infringement.