Oracle vs. Google Android, Java lawsuit settlement talks will go no-where

Summary:The judge can order Oracle's Larry Ellison and Google's Larry Page to talk in closed court all he wants, they're not going to settle Oracle's lawsuit over Android and its alleged infringement on Java.

You can order CEOs to mediation, but you can't make them agree. U.S. District Judge William Alsup may have gotten Oracle CEO Larry Ellison and Google CEO Larry Page into a courtroom to try to get them to settle Oracle's lawsuit over Android and its alleged infringement on Java, but they're not going to come to an agreement.

For starters, the two companies have this little "gap" between their damage estimates. Oracle started out wanting something on the order of 2.6-billion bucks in damages. Some estimates had Oracle wanting as much as $6.1- billion large. Google thinks $100-million should be sufficient payoff .

So, since there's a minimum difference of a mere $2.5-billion, I doubt there will be an agreement. But, what do the experts think? I asked two leading intellectual property (IP) law attorneys for their take, and I got two very different views.

Thomas Carey, a partner at Sunstein Kann Murphy & Timbers LLP, a leading IP law firm and chairman of its Business Practice Group, doesn't see any agreement coming. Carey said, "This sort of forced negotiation is not likely to succeed unless Google offers billions to Oracle. This seems unlikely to me because Google is infected with a sense of righteousness that makes them oblivious to the possibility that they might actually have their ass handed to them in this lawsuit"

Therefore, Carey thinks that, "Google's best hope is for delay. If the judge were to delay the trial until the completion of the reexamination process, Oracle might get impatient for a settlement and Google might winnow down the claims to ones that it can design around."

But, if they can't come to an agreement in the future, then "If the trial proceeds, look for a huge recovery for Oracle."

In the meantime, of course, Google is also building its own patent arsenal. Google is buying Motorola Mobility for its patent portfolio and it recently completed the purchase of over a thousand IBM patents. With these in hand Google will be able to threaten Oracle and other companies with counter-patent suits. Thus, as Google gains ground in the patent arms race it will grow into a more formidable opponent. Time is on Google's side.

Daniel B. Ravicher, Executive Director of the Public Patent Foundation, a not-for-profit legal services organization whose mission is to protect freedom in the patent system, agrees with Carey that "Forced mediation rarely works, especially if there's more than just money on people's agenda, which seems possible here."

Ravicher continued, "Patent litigation is so inherently unpredictable on a micro level, that only when you have many patents being cross-asserted can you start to rely on averages so as to find a zone of overlap in expected outcomes. Traditionally, two large producers of consumer products would cross-license each other's portfolios (perhaps with a sweetener payment from one side to the other), but here the strategic goals of at least Oracle aren't completely transparent. At the end of the day, I think both sides know that no court will issue an injunction that stops any product (because the odds of injunctions per se are low and the ability to design around any such injunction is high), so there really is only money at stake."

There may other issues in play though. Ravicher notes that "Parties use litigation for all sorts of purposes, including getting diligence on competitors, etc. That's technically improper, but happens anyway. When that's a motive, the end of discovery marks the satisfaction of those goals, which helps cases settle at that stage."

Specifically, Ravicher thinks, "Larry Ellison isn't so stupid as to think he'll actually be able to force the destruction of Google phones, or at least his lawyers aren't. Seems more like Oracle's trying to find a quick way to profit from the Sun acquisition, which again means it's all about money. Even so, that doesn't mean they're in the same ballpark. Fortunately for Google, the Federal Circuit a few months ago issued a new decision on damages which greatly reduced exposure for accused infringers."

Amusing enough that case where the Federal Circuit Court abolished the "25% Rule of Thumb" and the "entire market value" test, which lead to heavy fines against patent violators, was Uniloc vs. Microsoft. In this case, Microsoft was initially ordered to pay $388-million for violating Uniloc's patent on using serial numbers to activate software-yes there's a patent on that and it's even been upheld by the U.S. Patent and Trademark Office (PTO).

While the final numbers aren't in yet, my informed guess is that Uniloc will get about a fifth, $77-million, of what it was initially awarded. By that logic, Oracle might do better to settle for a few hundred million now rather than pay out tens of millions in legal fees over years to get the same result. After all, Ellison has recently had bitter experience of having his $1.3-billion award against SAP being kicked down to $272-million; does he really want to go through that again?

Related Stories:

Google, Oracle settlement talks: Scrum over damages remains

IBM sells Google 1,023 patents for Android legal defense

Google and Motorola Mobility: It's all about the patents

A Google Android and Java history lesson

Sun CEO explicitly endorsed Java's use in Android: What do you say now Oracle?

Topics: Security, Android, Enterprise Software, Google, Hardware, Legal, Mobile OS, Mobility, Open Source, Oracle, Smartphones

About

Steven J. Vaughan-Nichols, aka sjvn, has been writing about technology and the business of technology since CP/M-80 was the cutting edge, PC operating system; 300bps was a fast Internet connection; WordStar was the state of the art word processor; and we liked it.His work has been published in everything from highly technical publications... Full Bio

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