Oracle vs. Google, Round 2: Trial begins over Java API copyright claim

The Java APIs that Google used to develop Android were protected by copyright law, a court has ruled -- now Google has defend its moves as "fair use" or potentially pay Oracle billions.

Get ready for another courtroom showdown between Oracle and Google over Java.

The heavyweight legal match-up between Oracle and Google has already had some dramatic results: In 2014, a U.S. Court of Appeals ruled that copyright law applies to APIs -- specifically, the 37 Java API packages Google used to develop the Android mobile operating system.

That ruling holds serious implications for Android -- which now commands around 80 percent of the smartphone market -- as well as for developers, and for the software industry at large. Just how much will that 2014 ruling impact the future of software development? That depends in part on Round 2 of the legal battle, which begins Monday.

Oracle and Google return to San Francisco's U.S. District Court on Monday to determine whether Google's use of those copyrighted API packages amounted to "fair use." If not, the court will have to assess the damages. If all goes Oracle's way, Google could owe the software giant a whopping sum, to the tune of $9 billion, that far surpassing any other copyright verdict.

The outcome could influence not only the next versions of Android but also the way developers, from major companies and startups alike, approach interoperable software.

Oracle v. Google: The backstory

A decade ago, Android developers built their OS with the help of Java APIs, which were developed by Sun Microsystems in the 1990s. When Google decided to base Android on Java, it began licensing negotiations with Sun but ultimately abandoned them. After Oracle acquired Sun in 2010, it sued Google for using the APIs without paying licensing fees. Google argued they were free to use because the Java programming language is open source, and the APIs are required to use the language.

In 2012, Judge William Alsup ruled that the APIs were not copyrightable, but Oracle appealed the decision. That's when the U.S. Federal Circuit Court of Appeals reversed the ruling. Google appealed to the Supreme Court, but last year they declined to hear the case. That left the appeals court decision in place, meaning the question now is not whether Google used copyrighted material without paying for it -- they did, according to the appeals court -- but whether they should have paid licensing fees for it.

A question of fair use

Judge Alsup is once again presiding over the case and explained to the jury the concept of fair use this way: "The policy behind the right of fair use is to encourage and allow the development of new ideas that build on earlier ones, thus providing a counterbalance to the copyright policy to protect creative works."

Fair use is often applied to material used for scholarly purposes, or for news reporting and commentary. In this case, the jury has to consider a handful of factors, such as whether and to what extent the use of of the copyrighted material was used for commercial gain, and whether its use was "transformative."

"What does transformative mean?" Alsup wrote to the jury. "A use is transformative if it adds something new, with a further purpose or different character, altering the first use with new expression, meaning, or message rather than merely superseding the objects of the original creation."

The more transformative a work is, the less the other factors like commercialism matter. This will be a key factor in the trial.

A critical part of Google's case relies on the argument that by incorporating the code in question into a smartphone operating system, it added new meaning to the copied portions of the original work -- a feat that Oracle had failed to accomplish on its own. Oracle argues that the development of Android didn't change the nature of the APIs.

Furthermore, Oracle argues that Google's use of Java APIs not only gave it a leg up in the smartphone market but also gave it an opportunity to do market harm to Oracle. In the 2000s, Java was in 80 percent of mobile phones, but Android seized its grip on the market by paying equipment manufacturers to use its OS.

Oracle says Google owes billions

That's where Oracle makes the case for the huge sum in damages it's seeking. It argues that Google owes it for lost third-party licensing revenues, as well as for revenues lost by preventing Oracle from launching its own mobile platform. The damages also take into account the profits Google has made from using the Java APIs.

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If the case goes Oracle's way, the damages could exceed the $1.3 billion that a jury awarded Oracle in its case against SAP in 2010 -- the largest copyright verdict ever.

Forking over around $9 billion wouldn't cripple Google, which pulls in more than twice that amount in revenues in a quarter. Still, those taking Google's side in the case argue that this kind of copyright verdict could send shock waves through the industry.

"The possibility of a financial death sentence like that in a copyright case keeps most startups and smaller businesses from even trying to rely on fair use," said Mitch Stoltz, senior staff attorney for the Electronic Frontier Foundation.

In the meantime, it's unclear how much impact the ongoing case has had on software development. The Cisco v. Arista lawsuit, which was filed after the Federal Circuit's decision in Oracle v. Google, includes a claim of copyright infringement that resembles Oracle's. IDC analyst Al Hilwa noted that more technology is being put into more permissive open source licenses. However, he added, "It is hard to tell if this is at all related to any uncertainty around APIs."

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