When it comes to Oracle v. Google on the subject of the latter’s alleged misappropriation of Java’s APIs in the Android operating system (aka: the now infamous API copyright case), a federal appeals court has hammered what appears to be all but the last remaining nail into the coffin that could seal Google’s fate. The next step in the process is for the courts to determine the damages that Google must pay to Oracle; a potentially staggering sum that has been suggested could reach as much as $9 billion.
This is the sort of news that clickbaiters love to jump on by writing something like the sky has officially fallen on the Android community and everyone should be running for cover. ZDNet’s blog network (which I co-founded with Dan Farber) has published its own hyperbole declaring the “P” in "Android P” to stand for “poison." According to ZDNet, “Android is now officially a liability to any company that has been involved in the mobile operating system. Google cannot possibly indemnify most of them. The rats are going to jump off the sinking ship.” I nearly spit my coffee out when I read that bit of uninformed garbage.
"We are disappointed the court reversed the jury finding that Java is open and free for everyone," a Google spokesman said in a statement according to CNN. "This type of ruling will make apps and online services more expensive for users. We are considering our options.”
So, let’s put this news into perspective. What exactly does it mean?
First, to all of you OEMs, developers, and other members of the Android community: You are not “rats.” Second, Android is not at this point "officially a liability to any company that has been involved in the mobile operating system.” I don’t think it will ever be. At least not any more than has already been accounted for (see below). Third, other than acquiring Oracle (could you imagine a match that’s anything more like oil and water?), Google does in fact have options. So, let’s enumerate those options and then discuss any other implications of the latest progress in this long-running legal saga.
What Are Google’s Options?
One of the complications in this case has to do with the open source nature of Java. If Android didn’t exist and Google decided today that it was going to build something called Android with Oracle’s Java, the two companies would not be litigating this case. But, without a license, Google started building and basing Android on Java just prior to Sun (later acquired by Oracle) having open sourced it. To better understand Google’s options, I reached out to Bruce Perens. In addition to being the co-founder of the Open Source Initiative (the organization that officially blesses open source licenses as being truly open source), Perens is the author of the original definition of open source (the OSD or Open Source Definition) and is an expert on software law.
A Supreme Option
According to Perens, just because the Supreme Court refused to hear the case before doesn’t mean that Google can’t re-petition the Supreme Court. “This [last round in court] was a new appeal and I think they get a chance to take it to the Supreme Court again” says Perens. Referring to the legal process whereby the Supreme Court certifies a lower court’s finding, Perens said that “Every time a lower court rules, you have the ability to file for a writ of certiorari.” In other words, this week's new ruling by the appeals court has triggered a new opportunity for Google to petition the Supreme Court.
Wait for “Sentencing?”
Now gored by its opponent, exhausted from battle, and looking to move on with its life, Google could simply roll-over and wait for the next court to determine the extent of the damages that Google must pay to Oracle. This is the part where pundits are tossing around the $8.8B figure. However, the likelihood of that happening is slim to none because the damages would only be one part of moving on (which both companies should want to do). The courts have sided with Oracle’s argument that the Java in Android is delivering value to Google. Until Android is fully weened off of Java (a work in progress), that Java will continue to deliver value which means that beyond the damages,...
Google Would Still Need a License to Java
to avoid ending up in court again. Settling damages is one thing. The court is unlikely to be concerned with how the two companies conduct business with one another moving forward. Should the Supreme Court option turn out to be a non-option (by way of Google’s decision not to pursue it or another Supreme Court rejection), Google will probably approach Oracle to negotiate a package deal that includes two primary components. First, it will settle the damages according to some publicly undisclosed sum. Second, Google will get a license to Java to keep Oracle from any further shaking-down of Google and its friends in the Android ecosystem (OEMs, developers, etc.).
This is where things could get really interesting. Given everything that’s happened so far, it appears as though Oracle has the upper hand.
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“[A license] would be a part of any negotiation here” said Perens. “Because Oracle could say to Google, ‘Look, we got you. Now we’re going to start going after your community. We’re going to go after Samsung and all of the Chinese phone manufacturers for infringement and contributory infringement and then we’re going to go after your developers.’ So Google has to prevent that from happening. And to do that, Google needs to be able to transmit a license to all of those parties where Android is an open space to use Java. To do that, they may have to negotiate with Oracle.”
But according to Perens, in all likelihood, Google has a trump card that will prevent Oracle from taking too much advantage of the leverage that it has.
I’ve been covering open source and other intellectual property issues as they relate to technology and antitrust matters for the better part of two decades. Typically speaking, you can break patent-bearing technology companies into two categories; ones that acquire or develop patents for offensive purposes, and ones that acquire or develop patents for defensive purposes.
Technology companies in the former category will aggressively enforce those patents, often using them and the legal system to destroy or mortally wound anyone who infringes on them. Technology companies in the latter category are mainly interested in the patent so nobody sues them for infringing on it. Google falls into the latter category. Perens thinks of Google as a non-aggressor. On the same token, you just don’t get to be as big as Google is without accumulating a sizeable patent portfolio. Either the patents that it has developed on its own, or ones that were acquired when it swallowed other companies (or parts of them) like Motorola.
“Google hasn’t been a patent aggressor until now. But this gives them a reason.” says Perens "One thing that Google has in its pocket is anything that they own that can be trouble for Oracle. Google might say ‘We’ve not been asserting our patents because we really don’t feel it’s in our interests. But now you’ve made it in our interests.’ So, Google may be able to dig through their patent portfolio and say [to Oracle] ‘Hey look, you’re infringing this and this and this and thus reduce what they (Google) have to pay that way.”
Does Google posses some intellectual property that Oracle’s solutions read on? According to Perens, given the breadth of Google, it would be hard for there not to be. “There's some degree of web technology. There’s probably some database stuff and probably some IoT stuff that Google has patents on and that it can assert against Oracle.”
What happens next is something of a time honored tradition in the technology industry; one that results in a cross-licensing detente. “In a room somewhere where you or I can’t hear what’s going on, and will never be told, both companies will drag out all of their weapons [intellectual property], shake them in front of the other company, and then they sit down and negotiate what the exchange will be” said Perens. “When people say that Google is going to owe Oracle $8B or $9B, they’re not thinking of what does Google hold on Oracle?”
One could argue that maybe Google has no weapons to bring into such a room. But Perens says it’s unlikely. “I’m really really sure that Google, looking at this case [over the years], has enriched its defensive portfolio (keeping in mind it wasn’t empty before).” Speaking of which, this case has now been dragging on for 8 years. So, before we start to worry on behalf of OEMs like Samsung, Huawei, etc, let’s keep in mind …
OEMs Have Lawyers and Accountants That Can Operate Spreadsheets
Oracle originally filed suit in 2010. While we have no idea of Google's licensing arrangements with OEMs like Samsung and Huawei or whether Google already indemnifies OEMs (Perens actually thinks it’s the other way around), we should all sleep pretty easy at night knowing that on that day in 2010 when Oracle’s intentions became clear, the lawyers and accountants at the OEMs dusted off their actuarial skills and started doing the math (and they’ve been doing it ever since).
Whatever financial difficulty the OEMs could potentially face in connection with Oracle’s lawsuit against Google, the beancounters have already accounted for it because that’s their job; to estimate and protect their employers from legal and financial risk.
Would the OEMs rather be in a different place? No doubt. But as Perens pointed out to me, none of the other mobile operating systems were viable options. Not Microsoft’s. Not Palm’s. Not BlackBerry’s. Not Symbian. Not Linux. And certainly not some of the vendor specific operating systems that the various OEMs have tried their own hands at (like Samsung’s Tizen). In the end, Android may have been a legal Trojan horse for the OEMs. But someone undoubtedly did the math and proved how the profits that Android would help them to generate would greatly outstrip the financial risk when compared to the net outcomes from other alternatives.
Which leaves us with …
What About All Those Developers Who Can’t Lawyer-Up?
Let’s keep in mind that to Google, developers and are everything. Google probably loves developers more than kids love unicorns. When Google used to participate in the developer events I produced during the early days of the API economy, the company made it abundantly clear to me (in unspoken words) that developers were not to be abused and that any attempts to overly commercialize them would be met with the swift withdrawal of its support. That didn’t mean that Google would cut you off at the knees if you made some money. After all, it profits from developers too. But the company strongly favored a healthy balance that ensured a fair exchange of value — one that was a little lopsided in favor of developers -- and my events were much better thanks to this influence.
However this shakes out — be it at the Supreme Court or at some cross-licensing cage match between Oracle’s and Google’s attorneys — I don’t think developers have anything to fear. Not only will Google look to protect them, let’s keep in mind that when there’s an aggressor swimming about, they typically don’t sue the same developers that could one day be their customers.
The unwritten rule in Silicon Valley is not to waste your time suing companies that don’t have deep pockets. It’s just not worth it. Not only don’t developers have the sort of money that matters to an 800-pound gorilla like Oracle, it’s just not good for business. Oracle is right now looking to take on the likes of Amazon, Google, and Microsoft with its own cloud offerings. Those offerings are technologically compelling, the pricing is extremely competitive, and like Microsoft, Oracle has a such a strong foothold with so many customers that those customers will very likely pay attention to Oracle’s pitch. Now is not a good time to launch a frontal assault on developers.
But just in case developers want to insulate themselves, let’s remember that everything they can build for Android using Java, they can also build with Kotlin.
So, no. There’s no sinking ship to jump from. And, oh, by the way, we here at ProgrammableWeb love developers. We’ll never call you rats.
One final point: This article does not cover the dangerous precedent created by the idea of copyrightable APIs, how it can stifle innovation, and create a new class of trolls (not patent trolls, but rather copyright trolls). For more on that, be sure to read my analysis explaining how the Supreme Court Delivered A Major Blow To API Economy In its Copyright Ruling.