Copy that?: Google avoids $9bn payout to Oracle after winning a decade-long legal battle over an alleged copyright infringement

April 18, 2021

3 min read

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What's going on here?

The US Supreme Court ruled in Google’s favour in a legal battle that has endured for over ten years against Oracle over an alleged copyright infringement.

What does this mean?

In 2010, US-based tech giant Oracle sued Google for a copyright infringement of computer code – namely, Oracle’s Java API (application programming interface). Google used this code to ensure that the operating system of Android, owned by Google, remained compatible with Java software. Today, 70% of smartphones across the globe use Android. A win for Oracle could have seen damages of up to $9bn being paid out by Google.

The case centred around whether or not developers looking to copy APIs used in other programs needed to seek prior permission. Many programmers, as well as Google’s defence, argued that APIs are a “method of operation” for computer programming rather than an actual program in and of themselves. This means that they operate more like a “steering wheel” and as such, are “outside the scope of legal protection”. However, Oracle argued that the significant quantity of code that Google took formed a vital part of the program itself. If Oracle had been successful on this point, Google would have had to prove that it was covered by “fair use” – in other words, that the practical nature of APIs overrides the need for licensed copying. 

By a majority of six to two, the justices decided in Google’s favour on the “fair use” point, stating that Google was in fact covered by the “fair use” element when it initially used the lines of Oracle’s code.

What's the big picture effect?

Despite the unfortunate outcome for Oracle, this case represented a rare example of a case between two tech giants reaching the highest court in the United States. The hearing also came at a time of political tension for both companies, as Google awaits a potential antitrust complaint from the US Department of Justice, while Oracle seeks backing from the US government for its deal pertaining to “TikTok’s international operations”.

Despite the conclusion of the protracted case, a much bigger legal question remains open. The judges only ruled on one point of Google’s two-sided argument, namely the “fair use” element. The other argument, relating to whether interfaces are covered by copyright at all, was hardly touched on. In fact, it became clear as the case progressed that the application of traditional US copyright law to computer code is challenging, with the judges holding divergent views on the matter. Ultimately, the judges were hesitant to make a specific ruling on whether or not code is copyrightable, and the question was left for a different, future case. 

If Oracle had been successful, it would have given tech companies the power to restrict how other companies can use their code, permitting them to “block disruptive new competitors”. According to some commentators, this would have proven detrimental to the creativity within the tech development arena. Justice Stephen Breyer highlighted that several programmers already had extensive knowledge of Oracle’s code, and therefore, preventing free use of this in the future would mean “Oracle alone would hold the key”, something he stated “would risk harm to the public”.  A rule in Oracle’s favour might have also triggered a string of further legal battles since any companies owning the original code would be able to initiate legal proceedings against those who had built on this code in the future. Given that new software is typically derived from and inspired by existing software, this would put countless developers at risk of legal action.

On the other hand, Oracle stated that the US Supreme Court ruling has placed further power into Google’s hands, with the company already having an unshakeable monopoly in the technological sector. Furthermore, some commentators state that the effect of the ruling is an overarching change in the prevailing methods of source code licensing, which risks stonewalling future developments because “companies would fear that the more popular their software became, the less likely they would be to make any money off it”.

Given the huge size and relevance of both Google and Oracle as companies, it was inevitable that there would be major industry-wide ramifications whichever party won. Moving forward, software development cannot and will not completely stop. However, it is likely that there will be more attention on how US copyright law can be adapted to the technological arena.

Report written by Edie Essex Barrett

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