No Fair Use: Federal Circuit Orders Third Trial for Oracle, Google
Google's unlicensed use of Java APIs in smartphones was not transformative, judges rule.
March 27, 2018 at 12:57 PM
4 minute read
The original version of this story was published on The Recorder
Oracle's dispute with Google over Java APIs is coming back to San Francisco for a third trial.
The U.S. Court of Appeals for the Federal Circuit ruled Tuesday that no reasonable jury could have found Google's unlicensed copying of Java APIs into its Android operating system was a fair use. The court once again remanded the case to U.S. District Judge William Alsup of the Northern District of California, this time for a damages trial where Google could be on the hook for billions of dollars.
Android has generated more than $42 billion in advertising revenue, according to evidence presented at the 2016 trial.
The Federal Circuit was led once again by Judge Kathleen O'Malley, who upset the first trial with a 2014 ruling that found the Java APIs copyrightable. This time around, she said Alsup focused the fair use trial too narrowly, by limiting the harm caused by Android to the desktop and laptop markets where Oracle was already established.
“That Oracle never built a smartphone device is irrelevant because potential markets include licensing others to develop derivative works,” she wrote. “Because the law recognizes and protects a copyright owner's right to enter a 'potential market,' this fact alone is sufficient to establish market impact.”
It's another big win for Oracle's appellate lawyers, led by partner E. Joshua Rosenkranz. Rosenkranz persuaded the Federal Circuit three years ago that 11,000 lines of declaring code that make up the 37 Java APIs in question are copyrightable. Kirkland & Ellis is part of Oracle's team. It's also vindication for Orrick, Herrington & Sutcliffe trial partners Peter Bicks and Annette Hurst, who had tried to expand the scope of the trial but were blocked by Alsup.
“The Federal Circuit's opinion upholds fundamental principles of copyright law and makes clear that Google violated the law, Oracle general counsel Dorian Daley said in an emailed statement. “This decision protects creators and consumers from the unlawful abuse of their rights.”
Google was represented by King & Spalding. At oral arguments before the Federal Circuit last December, partner Daryl Joseffer argued that Google had used only a tiny amount of Java to transform the programming language for smartphones.
“The jury heard a lot of evidence that smartphones are an entirely different operating system context from personal computers,” he argued then.
But, O'Malley concluded on Tuesday, “Smartphones were not a new context.” Oracle predecessor Sun Microsystems was already working on a smartphone version of Java, and had licensed Java to Nokia and Amazon.com Inc. “Because the Java SE was already being used in smartphones, Google did not 'transform' the copyrighted material into a new context and no reasonable jury could conclude otherwise,” O'Malley wrote.
Plus, she added, “Merely copying the material and moving it from one platform to another without alteration is not transformative.”
Dorsey & Whitney IP partner J. Michael Kekes said via email the holding is especially significant. “What this means is that simply porting the work (even a small portion of it) to a new platform or medium doesn't mean you are transforming the underlying work,” he wrote. “The old adage that 'the medium is the message' doesn't necessarily fly in the context of fair use.”
Haynes and Boone partner Jason Bloom pointed out in an interview that this isn't necessarily the end of the line for Google. The company could ask for en banc review or petition to the U.S. Supreme Court. There's no circuit split on the issue, but “given the magnitude of this case and what it means for software developers, they might want to weigh in,” he said.
Judges S. Jay Plager and Richard Taranto concurred in O'Malley's opinion.
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