I have attached an example illustrating this. The example consists of a Frame (with a MouseMotionListener and MouseListener attached to it) that contains a single child that has a MouseListener attached to it. Click on the background of the window (not the red region) and drag the mouse around. Notice that 'window dragged' is printed while you drag over the window region, but as soon as you drag over the region of the child Component mouseDragged is no longer invoked.

I should also add that if you release the mouse over the child Component the Window's MouseListener won't get notified of the mouseRelease.