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Google Loses Copyright Appeal to Oracle, May Owe Billions

For Google fans and investors, the Federal Circuit Court of Appeals recent panel decision may not be the easiest read. Basically, Oracle's lawsuit against Google stemming from the unlicensed use of Java APIs was not just resurrected from the dead by the appellate panel, the jury's verdict for Google was turned into a win for Oracle.

The panel remanded the case back to the trial court, but only to conduct a trial on damages. It is expected that Oracle will seek approximately $9 billion for the extensive unlicensed use of the Java APIs. Notably, that's a rather large drop in the Alphabet Inc./Google bucket; a drop that represents a little less than 10 percent of the giant's annual revenue.

Details of the Case

This case has been years in the making and for the most part has gone Google's way. To make a long story short: Oracle's programming language, Java, contains APIs, which are prewritten bits of code that developers can use. While Java code is free to use, Oracle requires developers that use their APIs to pay royalties or a licensing fee. Google copied Java APIs verbatim for their Android platform, and when licensing fee negotiations failed, used the APIs regardless.

At trial, the jury ruled that Google was not liable for copyright infringement due to the fair use defense. However, on appeal, the Federal circuit found that fair use did not apply, as a matter of law. The court explained that fair use is a hybrid issue of fact and law. Juries can decide historical facts, but the application of those facts is a matter of law. Once no facts are in dispute, or fact finder has issued findings of fact, a court can rule on fair use as a matter of law.

It is expected that Google will request reconsideration. And if that is unsuccessful, seek a rehearing en banc. And if that is unsuccessful, petition SCOTUS, again.

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