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Business software giant Oracle won a key legal victory today in its ongoing fight with Google over the search company’s use of Java software in its Android mobile operating system. The U.S. Court of Appeals granted Oracle the right to protect its software via copyright, something a lower court refused to do in 2012.

In a 69-page decision (you can read it below), the three-judge panel ruled that Oracle can pursue copyright claims against Google for the parts of Java that it used in creating Android. Oracle has argued that Google used the code without authorization.

The case was dubbed the “World Series of intellectual property cases” and has been closely watched by the software industry. It has dug into the issue of whether application programming interfaces used by software developers to allow different software programs to communicate with each other could be protected by copyright. Judge William Alsup of the U.S. District Court in San Francisco ruled in 2012 that they cannot.

The court also remanded one issue to the lower court for retrial: Whether or not Google had used the code under fair-use rules. A jury in the lower court had been unable to decide on that issue.

Federal Circuit Judge Kathleen O’Malley wrote the opinion. Here’s the key quote, critiquing Alsup’s ruling:

“We find that the district court failed to distinguish between the threshold question of what is copyrightable — which presents a low bar — and the scope of conduct that constitutes infringing activity. The court also erred by importing fair use principles, including interoperability concerns, into its copyrightability analysis. For the reasons that follow, we conclude that the declaring code and the structure, sequence, and organization of the 37 Java API packages are entitled to copyright protection.”

Oracle issued a statement from its general counsel, Dorian Daley, praising the decision:

“We are extremely pleased that the Federal Circuit denied Google’s attempt to drastically limit copyright protection for computer code. The Federal Circuit’s opinion is a win for Oracle and the entire software industry that relies on copyright protection to fuel innovation and ensure that developers are rewarded for their breakthroughs. We are confident that the district court will appropriately apply the fair use doctrine on remand, which is not intended to protect naked commercial exploitation of copyrighted material.”

Google didn’t have an immediate comment.

Google just issued the following statement: “We’re disappointed by this ruling, which sets a damaging precedent for computer science and software development, and are considering our options.”

Oracle had alleged that when Google was creating Android, it copied a lot of material — more than 37 Java APIs and 11 lines of Java source code — and that these are subject to copyright protection like other intellectual property. It had also argued that Google had infringed patents it holds on the Java technology, but lost that decision.

Java is the software language that Oracle took ownership of when it acquired Sun Microsystems in 2010. The trial in the lower court was notable for all the bold-faced names who testified on the witness stand, including Oracle CEO Larry Ellison, Google CEO Larry Page and former Sun Microsystems CEOs Scott McNealy and Jonathan Schwartz.

Update: I just had a quick conversation with one of Oracle’s lawyers, E. Joshua Rosenkranz of Orrick, Herrington & Sutcliffe, a New York law firm. “Java software code took years and many millions of dollars to develop,” he said. “And the Federal Circuit understood that no one in their right mind would ever make an investment like that if anyone could just steal the work and use it to compete against the original developer.”

Oracle shares rose 16 cents to $41.03 as of 2:20 pm ET. Google shares rose $4.42 or nearly one percent to $515.42.

Oracle-Google-Java Appeal Decision



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