What you need to know. In plain English.

By Jeff John Roberts
May 9, 2016

Gather round tech folks, it’s time for an epic rematch between two industry giants. At stake is not just billions of dollars in copyright claims, but also a controversial legal concept that could roil the entire software industry.

It all begins on Monday in San Francisco, where Google GOOG and Oracle ORCL will joust in court for a second time over little bits of code used to build the Android operating system. Here’s a Q&A in plain English about what you need to know about the case, including each side’s strategy and possible outcomes.

Why are Google and Oracle in court?

The case is about intellectual property. It began six years ago when Oracle sued Google for using APIs tied to Java (more on this below) without permission. Google won at an initial trial in 2012 when a jury found the company didn’t infringe Oracle’s patents, and a judge concluded the APIs didn’t qualify for copyright protection.

But in a ruling that shocked the tech community, an appeals court found in 2014 that Oracle’s APIs were indeed covered by copyright. The ruling also kicked the case back to the lower court to determine whether Google’s use of the APIs counted as a “fair use.” Now, at this second trial, a jury will look at the fair use question.

How does “fair use” come into it?

Fair use is a part of copyright law that allows use of a work without the author’s permission. Examples are parody sketches that use famous TV or movie characters, or a book review that quotes a section of a a novel. The Oracle-Google trial is unusual because you normally see fair use debates in the realm of media and the arts, not computer science.

In any case, the legal standard is the same. It consists of a four-part test that weighs: 1) the purpose of the use (i.e. Why did you use it?); 2) the nature of the work (i.e. How much creativity was involved?) 3) the amount used (How much did you take?); 4) the effect on the market for the work.

While courts weigh all the factors, many legal scholars think numbers one (purpose) and four (effect on market) are the only ones that really matter.

Why is the case so important?

It’s partly about the money. Oracle wants a jury to order Google, which is now part of the holding company Alphabet, to pay $9.3 billion in damages. That figure is more than half of Google’s overall profits from 2015. But it’s unlikely Oracle, if it wins, will get even close to that amount.

The bigger issue, instead, is the fair use one. If the jury sides finds Google’s activities were not fair use, it could be open season on other software companies, big and small, that rely on unlicensed APIs.

As it stands, developers have long treated APIs as a standard set of instructions outside the realm of copyright. Now, if Google loses, they could have to seek a license or basically reinvent the wheel every time they want one computer program to interact with another. As prominent computer scientists told the appeals court, allowing companies to assert copyright over APIs could have a profound and negative effect on software innovation.

What are these APIs?

An API, which is short for Application Programming Interface, is a set of instructions that allow one type of software talk to another. For instance, you might have seen Google Maps built into a third party app or a “tweet this” button on a web page — this only works because Google and Twitter provided an API to make the app and website work with their software. (Here’s a non-technical explanation).

In the case of Oracle, it controls libraries of APIs tied to the popular programming language Java. When Google began adding Java features to its Android software in 2007, it replicated portions of those APIs because developers were already familiar with them. Those portions related to headers and sequences—they act kind of like a table of contents that shows what goes where.

What will Google argue?

Google will tell the jury that its use of the APIs was transformative under the first part of the four-part test. Specifically, it will argue that its use of the Java APIs for a mobile operating system was a new and original purpose outside. The company will also argue that APIs rank low on the creativity scale and that it will used a very amount of the overall code controlled by Oracle—thus, the second and third parts of the test favor Google. Finally, it will say the market harm part of the test favors Google because no one was using the APIs for mobile devices in the first place.

Google will also try to frame this as a story of greed on the part of Oracle, accusing its rival of trying to do through litigation what it can’t do through innovation. It will cast itself as the champion of the tech community and software developers, who will suffer if Oracle can copyright APIs.

As a fall back plan, Google is also relying on other defenses besides fair use. Specifically, this will involve asking U.S. District Judge William Alsup to find Oracle can’t sue in the first place because it waited too long and because it once implied to Google that it wouldn’t sue (legal arguments known as laches and estoppel).

What will Oracle argue?

Obviously, Oracle will put a very different gloss on the four fair use factors. It will tell the jury Google did nothing transformative with the APIs but simply lifted them to make money. It will claim the APIs represent a lot of skill and creativity, and that Google used thousands of lines of its code without permission, which is no small amount. Finally, it will say the success of Android shows clear harm in the market—i.e. that Oracle would have been able to collect millions in licensing fees but didn’t since Google simply took the APIs.

Oracle will also rebut Google’s story of innovation by painting its rival as a lawless company that just took what it wanted rather than play by the rules. It will argue that Google’s claims of principles are just a smokescreen to cover up the fact that it was in a rush to build its Android system and took a shortcut by stealing Oracle’s code.

What will the jury decide?

Juries are often swayed by stories and emotions more than by dry legal arguments. This means that the outcome may turn less on a sober analysis of the fair use factors and instead on how they feel about each company. Is Google defending innovation against Oracle’s greed? Or did Google just disregard the rules for the sake of its own self-interest?

The judge, who found for Google the first time around, will have a role to play, too, through his instructions and how he steers the trial. He could also sidestep the jury’s fair use finding by deciding the case on one of the other defenses (laches or estoppel) described above.

How long will this take?

The jury selection starts on Monday (update: the jurors have been selected), and the case is expected to last weeks. The first portion of the trial will focus on the fair use arguments. If the jury sides with Oracle, the trial will then move to a damages phase to see how much Google should pay. At this point, Google would also set out its other defenses.

Will there be another appeal?

That’s a pretty good bet. If Google loses, it will have to appeal once again to the Federal Circuit of Appeals, whose job is ordinarily to oversee patent claims—and which many blame for botching the original ruling. This would likely be a stepping stone to the Supreme Court, which refused to get involved the first time around over the question of whether APIs can be copyrighted in the first place. Given the importance of the case, and an ongoing debate over fair use, there’s a good chance the country’s top court may end up hearing the case after all.

SPONSORED FINANCIAL CONTENT

You May Like