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Oracle, Google Prepare for ‘World Series’ of IP Trials

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Badges for the Android mobile operating system are seen on an employee's lanyard at the Mobile World Congress in Barcelona. Close

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Photographer: Denis Doyle/Bloomberg

Badges for the Android mobile operating system are seen on an employee's lanyard at the Mobile World Congress in Barcelona.

Oracle Corp. (ORCL) will ask a jury next week to find that Google Inc. stole its intellectual property to make Android software in a trial that a federal judge called the “World Series of IP cases.”

Oracle, the database maker seeking to wring profit from its $7.4 billion 2010 acquisition of Sun Microsystems Inc. (JAVA), is seeking $1 billion in damages and an injunction to block Android software that allegedly infringes patents it owns through Sun. Google, whose Android software is running on more than 150 million devices, denies any infringement and says the Oracle- owned technology it used isn’t covered by copyright.

“This is the World Series of IP cases,” U.S. District Judge William Alsup, who will preside over the trial in San Francisco, told lawyers for both companies March 28. “Only one winner comes out of the World Series.”

The eight-week trial is scheduled to begin April 16 with jury selection. Oracle alleges that Google copied parts of the Java programming language platform when designing the Android operating system without taking a license. The arrangement and structure of 37 application programming interfaces, or APIs -- tools used for building software applications -- Google used are original expressions that are copyrightable, Oracle’s attorneys have said.

‘Art, Not a Science’

“We’re talking about the design of the libraries by designers who are designing something that is an art, not a science, and that is creative,” Oracle lawyer Michael Jacobs said in a March 28 court hearing.

More than 97 percent of Android phones active in the past two weeks contain copied code, Oracle said in an April 5 court filing. An injunction is needed to stop Google from distributing infringing products to phone makers, the Redwood City, California-based company said. Alsup would decide after the trial whether an injunction is warranted if the jury finds Google infringed.

Settlement talks held April 2 and in September failed to resolve the lawsuit. Oracle fell 2 cents to $28.33 and Google rose $7.07 to $633.93 at 12:28 p.m. in Nasdaq Stock Market trading.

Developed by Sun in the mid-1990s, Java lets developers write programs that work across different operating systems and on a variety of computers. It formed a key building block of the Web and is widely used in business applications. The software also runs on billions of mobile devices.

Google relies on Android, the most popular U.S. smartphone operating system, to compete with Apple Inc. in the mobile-phone market and lessen its dependence on traditional Web-search advertising.

‘Two Different Ideas’

Google claims the APIs it used are general-purpose methods of operation that simply describe how to do a task, and aren’t subject to copyright.

“Having two different ways of organizing something doesn’t mean those are expression,” said Michael Kwun, a Google attorney, at the March 28 hearing. It “just means those are two different ideas.”

He told Alsup that a tiny fraction of the 15 million lines of code on an Android phone are alleged to have been copied. Google has removed all allegedly copied material from the most- recent version of Android, said company spokesman Jim Prosser.

Names Aren’t Protected

The jury will be told at trial that the names of items in the API packages, such as API files and methods, aren’t protected, Alsup said in a ruling today. The jury will also be told that Java is free and open for anyone to use and the Oracle and Google disagree on whether the APIs are part of the Java programming language, he said in the ruling.

A finding that APIs are copyrightable would be “fairly catastrophic” for the U.S. software industry, said Simon Wardley, a researcher at Computer Sciences Corp. (CSC)’s U.K.-based Leading Edge Forum, a global research and advisory forum for corporate IT chiefs. Common functions that programmers use would become protected, leading to more lawsuits, he said in an e- mail.

“If you’re looking for a case where the U.S. legal system might throw the golden goose under a bus, then this one is a pretty good candidate,” Wardley said.

Percentage of Revenue

Oracle also alleges that Google infringed the two Java patents in the case that a court-appointed expert estimated are worth $2.8 million in damages.

If the jury finds Google infringed, future damages for one patent that expires in December should be 0.5 percent of Android revenue and future damages on the other patent that expires in 2018 should be 0.015 percent of Android revenue, Google said, citing the court-appointed expert, in court documents.

The expert’s report isn’t public. Google doesn’t disclose revenue for the operating system.

Oracle’s expert says total damages through 2011 are $1 billion, according to court filings.

“The reality is that the jury may perceive the court- appointed expert to be the truly objective expert,” said David Kleinfeld, an intellectual property and business litigation partner at Goodwin Procter who isn’t involved in the case.

Google E-Mail

Oracle’s original lawsuit filed in 2010 claimed Google was infringing seven patents. All but two have been removed from the case. Google won a ruling last year throwing out Oracle’s $6.1 billion damage estimate. Alsup ruled that damage estimates should start at $100 million, the figure that Google considered and rejected in 2006 for a Java license from Sun.

Alsup also ruled that the jury may see an internal Google e-mail showing that top executives were told in 2010 that the company should negotiate a license for Java. The e-mail, written by a Google engineer just days before Oracle’s lawsuit, said co- founders Larry Page and Sergey Brin had asked for an investigation into technical alternatives to Java for Android.

“We’ve been over a bunch of these, and think they all suck,” the engineer, Tim Lindholm, wrote. “We conclude that we need to negotiate a license for Java under the terms we need.”

The e-mail is “going to be important” at trial, said Paul Neale, chief executive officer at Lynbrook, New York-based DOAR Litigation Consulting.

‘Violating the Trust’

“We see lawyers focusing on the technology and the patents and complexity when jurors are interested in knowing what the relationship was between the parties and whether one party is seen as violating the trust,” said Neale in a phone interview.

Still, convincing a jury that Google is infringing codes of a programming language that is in the public domain and free for anyone to use won’t be a simple task, Alsup said.

“I promise you, there are going to be people on the jury who, when they understand that you have no claim to the Java programming language, that’s going to be the end of the line for them,” Alsup told Oracle’s Jacobs at a March 28 hearing.

Today Alsup ruled that the jury will be told that Java is free and open for anyone to use and the Oracle and Google disagree on whether the APIs are

The case is Oracle America Inc. v. Google Inc. (GOOG), 10-03561, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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