Watch Out, Oracle Will Sue the Pants Off You
Oracle (NASDAQ:ORCL) is set to go to trial against Google (NASDAQ:GOOG) next week in the biggest dispute over smartphone technology this year. The case is set for Monday in San Francisco federal court with Jury selection.
The dispute goes back to Oracle’s claims that Google’s Android operating system infringes on its intellectual property rights to the Java programming language. Google asserts that it does not violate Oracle’s patents. Furthermore, the search giant insists that Oracle can not copyright certain parts of Java.
In August 2010, Oracle sued Google over seven patents for Java, that Oracle acquired when it bought Sun Microsystems. Google succeeded in narrowing down Oracle’s claims so that only two patents remained in the case that reduced the possible damages that could be awarded.
Oracle is currently seeking $1 billion in copyright damages, and has rejected Google’s $2.8 million settlement offer on the two patents, including 0.5 percent of Android revenue on one patent until it expires this December and 0.015 percent on a second patent until it expires in April 2018. Google said its mobile business was generating revenue at an annual run rate of $2.5 billion. The figure includes revenue from ads Google serves on Android devices and Apple’s (NASDAQ:AAPL) iPhone. However, a settlement was not reached between the two sides.
Given Oracle’s impeding battle with Google, the software giant is willing spend a lot of money in an attempt to succeed winning damages at trial. Oracle’s strategy is to get a chunk of Android, the operating system powering the majority of devices in the growing market. Oracle’s strategy is to force Google to pay for a license and make Android compatible with the rest of Java. A Google spokesman has said that Oracle’s claims are without merit.
U.S. District Judge William Alsup will preside over the Google trial, which will be schedule for three phases: copyright liability, patent claims, and damages. Experts say that Oracle’s best chance of winning damages is if it plays up copyright allegations. However, Google is using the defense that the structure of interface specifications, which define how programmers interact with software platforms, is not copyrightable. Even though pretrial rulings on copyright have favored Oracle, the law is not clear on how copyright protections apple to software. Google has a good chance to reverse any damaging verdict on appeal.
While the Google case is Oracle’s biggest battle this year, the company has been busy suing other rivals. Its lawsuit with Google is just the first of four big tech trials involving the software giant. The other cases are scheduled for the next few months, three in Northern California and one in Nevada. Oracle is also suing Hewlett-Packard (NYSE:HPQ) over the Itanium microprocessor, SAP AG (NYSE:SAP) in June over alleged copyright infringement, and smaller competitor Rimini Steet over copyright infringement later this year. The following is a breakdown of Oracle’s lawsuits this year:
- Oracle vs. Hewlett-Packard: HP sued Oracle for breach of contract after Oracle decided to discontinue support for the Itanium microcessor. This prompted Oracle to counter sue. A hearing is scheduled for early May on requests from both sides to resolve the case in their favor before trial.
- Oracle vs. SAP: Oracle sued SAP unit TomorrowNow for wrongfully downloading Oracle files and won a $1.3 billion verdict in 2010. A U.S. district Judge brown down the verdict to $272 million, causing Oracle to seek a retrial. The trial over damages will take place in Oakland federal court. SAP has admitted liability for the downloads, and has agreed to pay Oracle $120 million in attorney fees.
- Oracle vs. Rimini Street: Oracle is suing Rimini for improperly copying its files. Rimini asserts that its business practices are legal and rejects Oracle’s claims. Trial preparations are expected to be completed by August, but no trial date has been set.
Many have wondered whether fighting so many court battles back-to-back is distracting for Oracle Chief Executive Officer Larry Ellison or his employees. Lawsuits are very costly, but that has not stopped the tenacious Ellison from suing anyone or anything that crosses his path. He once sued the city of San Jose when it imposed a curfew on his private jet. He actually won.
It looks like Oracle is always on the lookout for a good fight. Google will have to gear up and prepare itself for a heck of a battle next week.