The World Series of IP Cases: Oracle vs. Google

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Oracle (NASDAQ:ORCL) and Google’s (NASDAQ:GOOG) intellectual property case over Android software will be going to trial next week. The eight-week trial is scheduled to start on April 16 with jury selection. U.S. District Judge William Alsup, presiding over the trial in San Francisco, has dubbed the case the World Series of IP cases. The judge said only one winner comes out of the World Series.

Oracle is seeking $1 billion in damages and an injunction to block Android software that allegedly infringes patents it owns though Sun Microsystems Inc., the database maker’s $7.4 billion acquisition of 2010. Oracle insists that Google copied sections of the Java programming language platform and didn’t take a license when designing the Android operating system, but Google denies any infringement. Android software runs on more than 150 million devices.

Five patents have been thrown out of Oracle’s original lawsuit filed in 2010, but two have remained. Last year, Google won a ruling throwing out Oracle’s $6.1 billion damage estimate. Judge Alsup ruled that estimates for damages should start at $100 million, which is the figure Google considered and rejected for a Java license from Sun in 2006 .

According to an April 5 court filing, more than 97 percent of Android phones active in the past two weeks contained copied code. Google disagrees with Oracle’s contention, claiming that only a tiny fraction of the 15 million lines of code on an Android phone are alleged to have been copied. Oracle asked the court for an injunction to stop the search giant from distributing infringing products to phone makers. Judge Alsup will decide after trial whether an injunction is necessary if the jury finds Google has infringed.

Oracle deems the tools Google used to build software applications as original expressions, and therefore copyrightable. Google asserts that the Oracle-owned technology it uses isn’t covered by copyright because the APIs are general-purpose methods of operation that describe how to do a task. APIs are not subject to copyright. If the trial finds APIs to be copyrightable, it would be catastrophic for the U.S. software industry, undoubtedly leading to more lawsuits in the future.

A Google spokesperson said that the company has removed all copied material from the most recent version of Android. Google depends on Android to compete with Apple (NASDAQ:AAPL) in the smartphone market. Android also lessens Google’s dependence on traditional Web-search advertising.

If the jury finds Google infringed, damages for one patent, which expired in December, should be 0.5 percent of Android revenue up to that period. Future damages on other patent, which expires in 2018, should be 0.015 percent of Android revenue. Google did not disclose revenue for Android OS, but Oracle is seeking $1 billion in damages through 2011 for Google’s infringement of the two Java patents.

Judge Alsup has ruled that a jury may see an internal Google email that indicates top executive were told in 2010 that the company should negotiate a license for Java. C0-founders Larry Page and Sergey Brin were investigating technical alternatives to Java for Android just days before the Oracle lawsuit. The email will be an important piece of evidence at trial.

The jury’s primary focus will be to decide if one party is violating trust, but lawyers will be focusing on the technology and the patents. It will be difficult to convince the jury that Google is infringing codes of a programming language given that it is free for anyone to use. Google’s advantage in court might be convincing the jury that there is no claim to using the Java programming language.

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