Here's the abstract of the patent.
A communication device is configured to switch from a normal mode of operation to an inconspicuous mode of operation in which a reduced set of information is presented on a home screen of a display of the device in comparison to a set of information presented on the home screen in the normal mode of operation. In addition, other display properties such as contrast and brightness may be adjusted to make them less conspicuous. The home screen in the inconspicuous mode of operation is less obtrusive or conspicuous to individuals than in the normal mode of operation. The device may enter the inconspicuous mode upon user request or by detecting at least one environmental condition using a sensor available to the mobile communication device. The environmental condition may be anything that the device can detect or sense in its surrounding environment such as ambient light or sound. The device may return to the normal mode of operation by user request or when the environmental condition is no longer present.
In short, your phone wouldn't ring if it was (a) dark and (b) the GPS worked out you were in a cinema. A great idea, but it would mean no more public service adverts at the Alamo Drafthouse...
While there are some practical implications that would need to be overcome (running all those sensors will take battery power, and any designer will have to be very careful to make sure important calls, messages, and alerts are not missed in this new mode), Microsoft's research department is pushing forward with ideas that could change smartphone for the better (and provide them with a few more patents and some potential income to go with it).
The full patent can be read online at the US Patent and Trademark Office.