Google loses Android battle and could owe Oracle billions of dollars

Posted at 7:42 PM, Mar 27, 2018
and last updated 2018-03-27 19:42:21-04

(CNN Money) — Google just lost a major copyright case that could cost it billions of dollars and change how tech companies approach software development.

An appeals court said on Tuesday that Google violated copyright laws when it used Oracle’s open-source Java software to build the Android platform in 2009.

Tuesday’s ruling is the latest development in a topsy-turvy eight-year battle between Google and Oracle.

Oracle first brought its case against Google in 2010, claiming that Android infringes two patents that Oracle holds on its Java software, a ubiquitous programming language powering everything from phones to websites.

In 2012, a jury determined that Java does not deserve protection under copyright law. Two years later, an appeals court overturned the ruling, raising the question of whether Google’s use of Oracle’s API violated copyright law.

A jury determined in 2016 that Google’s use of Oracle’s APIs was legal under the copyright law’s fair use doctrine, which allows the free use of copyrighted material under specific circumstances. Oracle appealed the decision, and a judge took its side on Tuesday.

“There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform,” a panel of three Federal Circuit judges wrote in Tuesday’s opinion.

Oracle said in a statement on Tuesday that the recent “decision protects creators and consumers.” Google said it is weighing its next steps. It could appeal to the full slate of judges on the court.

“We are disappointed the court reversed the jury finding that Java is open and free for everyone,” a Google spokesman said in a statement. “This type of ruling will make apps and online services more expensive for users. We are considering our options.”

Related: Jury sides with Google in billion dollar Oracle suit

Another court will decide how much Google owes Oracle in damages.

As of 2016, Oracle was seeking about $9 billion from Google. But because APIs have become much more widespread over the years, a court could decide that Oracle deserves more, said Christopher Carani, a partner with McAndrews, Held & Malloy and a professor at Northwestern’s law school.

“The numbers in this case will be staggering,” he added.

The verdict is likely to eclipse the current largest copyright verdict of $1.3 billion, awarded to Oracle when it sued rival SAP in 2010.

Google isn’t the only company that stands to lose from this decision. Many others rely on open-source software to develop their own platforms. Tuesday’s ruling means that some will either have pay to license certain software or develop their own from scratch.

“The decision is going to create a significant shift in how software is developed worldwide,” Carani said. “It really means that copyright in this context has teeth.”

“Sometimes free is not really free,” he added.