Oracle, the nation’s second largest software developer, sued Google in 2010, claiming that Google violated the patents and copyrights that protect its Java programming language. Oracle alleged that Google used Java application programming interfaces (APIs) to develop its popular Android operating system. An API allows one program to communicate with another. Oracle claimed that Google “replicated the structure, sequence, and organization of the overall code” of 37 API packages.
In 2012, a jury decided that Google did not infringe on Oracle’s patents. The same jury found that Google infringed Oracle’s copyright on its API code but could not agree whether Google was entitled to the “fair use” of the APIs.
Before the trial moved forward to allow the jury to consider an award of damages, the judge decided that the Java APIs replicated by Google were not subject to copyright protection. The judge therefore dismissed that portion of the lawsuit.
The court of appeals disagreed. It concluded that the structure, sequence, and organization of the API packages was entitled to copyright protection. The court of appeals therefore reversed the district court’s dismissal of the copyright claims and instructed the district court to reinstate the jury’s infringement verdict.
The case is now set for a second trial. The jury will be asked to decide whether Google made “fair use” of the APIs under copyright law and, if not, what damages it should pay as a result of its copyright infringement. Oracle is asking for $8.8 billion in damages. That’s almost twice the profit that Google’s parent company earned last quarter.
Before the trial starts, however, the court will need to decide what testimony the parties’ damages experts will be permitted to give. Each side has moved to exclude proposed testimony that the other side wants to offer.
Oracle’s Economic Expert
Oracle proposes to call Dr. Adam Jaffe to testify about the market harm that resulted from Google’s use of the 37 Java APIs. Google filed a Daubert motion, asking the court to decide whether Jaffe’s proposed testimony is based on a reliable application of valid principles and methods to the facts of the case. Google’s motion urges the court to exclude key portions of Jaffe’s testimony.
The fair use doctrine requires an evaluation of the effect of the use upon the potential market for the copyrighted work. Google argues that the copyrighted works are Java SE 1.4 and Java SE 5.0. According to Google, Jaffe overreached by analyzing the effect of Google’s Android system on Oracle’s potential market for the entire Java platform, rather than limiting his analysis to the potential market for Java SE 1.4 and 5.0. Google also argues that Jaffe considered the effect of Android as a whole on the potential market for Java, when he should have considered the effect of the 37 infringed APIs on the Java market. Since Jaffe did not limit his analysis to the relevant market or to the specific copyrights that were infringed, Google contends that his analysis is unreliable and unhelpful, and should therefore be excluded.
Google’s Technical Expert
Oracle moved to exclude certain proposed testimony of Google’s expert, Dr. Owen Astrachan, regarding fair use. Google argues that it made fair use of the APIs because it changed their expressive content. In other words, it transformed the copyrighted APIs into something new. Astrachan would testify that Google’s use of Oracle’s APIs was transformative because Google wrote its own code to implement the APIs as part of Android. Oracle contends that Astrachan is misapplying the legal standard because incorporating the APIs into Android did not change the APIs and is therefore not transformative.
In addition, the Court of Appeals concluded that Google could have written its own code instead of copying the API packages. According to Oracle, Astrachan would testify that Google had no choice but to copy the API packages because Android could not have used the Java language without doing so. In Google’s view, the court of appeals’ decision forecloses that testimony.
Finally, Oracle argues that Astrachan should not be allowed to express an opinion about potential harm to the market that was caused by the copyright infringement because Astrachan is an expert in computer programming, not in economics. Oracle argues that Astrachan did not apply a reliable economic methodology to arrive at his opinion about market harm. According to Oracle, his opinion amounts to “pure speculation” that must be excluded under Daubert.
The objections remain unresolved, but the judge made some interesting remarks at the Daubert hearing. He suggested that the question of market value comes down to “what could [Oracle] have sold the copyrighted work for before and after” the infringement. The judge expressed skepticism that Oracle could have used Java to “hit a home run” in the smartphone market as Google did with Android, since Android’s development consisted of considerably more than the copied Java APIs. The judge seemed to agree with Google that the APIs embedded within Android are a very small part of a very large work.
The judge also questioned whether he should rule that Google’s use of the APIs was transformative instead of leaving that question for the jury to decide. The judge expressed concern that if he ruled that Google’s actions were not transformative as a matter of law, he would be “cutting [Google] off at the knees.”
Although the judge has not yet decided the motions, he did lament his role as “gatekeeper” under Daubert. The judge asked “Do I have to go through and excise every detail of expert testimony on a granular level?” Despite the thousands of court decisions that have applied Daubert, judges still have differing philosophies about when a gatekeeper should prevent a jury from hearing expert testimony and when a judge should let the jury sort through the testimony to decide whether it is reliable. Where the judge in the dispute between Oracle and Google will draw that line will soon be determined.