17 April, 2018

As the Oracle Foretold - Court of Appeals Finds no Fair Use for Google's Copying of Java APIs

The Oracle/Google saga has been wagered in the courts for years (discussed on this blog here and here), and many legal scholars enthusiastic about technology have been waiting for the matter to reach its ultimate conclusion. Although the matter is not necessarily over by any means, a recent Court of Appeals decision might have struck the final blow, and ended the matter (and the question of APIs and copyright) for the time being.

The case of Oracle America Inc. v Google LLC concerned the Java software platform, which was developed by Oracle's predecessor, Sun Microsystems. The Java platform also included an Application Programming Interface (API) that allowed for the development of software using pre-written code to execute certain functions without writing the code from scratch, delivered in packages. Google had included some Java API packages in its Android operating system without Oracle's authorisation; specifically 37 Java API packages (amounting to 11,500 lines of code). Android became widely used and very popular, after which Oracle took Google to court for copyright infringement, with proceedings ending up in the Court of Appeals in late March.

The matter focussed on whether Google's copying of the APIs amounted to fair use under 17 USC section 107, which looks at four factors: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

Justice O'Malley, handing down the majority's opinion, started with the first factor, which, specifically, looks at whether the purpose of the use was a commercial one, and was it transformative or not so as to lean towards for fair use.

In terms of commercial use, the Court considered that, while the Android platform is freely distributed (including the aforementioned APIs) does not mean the use is not commercial. Also, as Google earns money from advertising on the platform, this will weigh towards a finding of commercial use. Indeed, in the end the Court found that the use was commercial.

The second part of the first factor looks at how transformative the use is, i.e. "…adds something new, with a further purpose or different character, altering the first with new expression, meaning or message". The use would have to add something new or supersede the original work. The Court determined that Google's use did not change the APIs or their purpose, but used them for the exact same in the Android operating system. The context of the use within smartphones was also not novel. In short, the Court saw that "…where, as here, the copying is verbatim, for an identical function and purpose, and there are no changes to the expressive content or message, a mere change in format (e.g., from desktop and laptop computers to smartphones and tablets) is insufficient as a matter of law to qualify as a transformative use".

Google's visit to a different Oracle failed to
predict the outcome of the case
Further to the assessment of purpose and character there is also a bad faith argument that the Court considered, meaning whether Google has used the APIs "…in a manner generally compatible with principles of good faith and fair dealing". Even assuming a jury would not be convinced of Google's bad faith use of the APIs, the Court still concluded that the first factor overall weighed against a finding of fair use.

The second factor looks at the nature of the copyright work, i.e. whether the work is more factual or creative, with the latter getting a higher likelihood of protection. The Court did highlight that, while the APIs did involve some level of creativity, they ultimately were for a functional purpose. Even so, the second factor is of very little importance in a finding of fair use, per the Court, they did find that it weighed towards a finding of fair use.

The Court moved onto the third factor, which looks at the substantiality of the copying, which is more an assessment of quality rather than sheer quantity of what was copied. In retaining the functionality of the Java APIs it was necessary to copy only roughly 200 lines of code; however, Google copied nearly the entire API set of 11,500 lines of code. In brief, the Court set out that Google's copying was qualitatively significant and necessary for the creation of the Android OS, and the third factor therefore weighed against a finding of fair use.

Finally, the Court looked at the fourth factor, meaning the copy's effect on the potential market (or the market for any derivative works) or value of the original work. This includes assessing "…the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant… would result in a substantially adverse impact on the potential market for the original". Likely market harm can also be presumed by the courts if the use by the potential infringer is commercial and non-transformative.

The Court determined that, there was clear harm to the market in relation to smartphones, as Java had been employed in many phones and tablets at the time of the launch of Android. In the light of the evidence, they indicated that this would clearly lead to a finding of market harm by a jury. There was also impact on the potential market for Java, not just the existing market, specifically with regards to the smartphone market, which was deemed to be "…a traditional, reasonable, or likely to be developed market". Oracle's lack of development of a smartphone or smartphone OS was irrelevant, as the potential still existed for the company that was taken over by Android.

In balancing all of the above factors, the Court found that Google's use was not fair use, but the Court did note that, while this case did not reach the threshold for fair use in relation to computer code or APIs, they did not "…conclude that a fair use defense could never be sustained in an action involving the copying of computer code".

Google's cross-appeal for declaration that the APIs would not be protected by copyright was also dismissed by the Court, which was dismissed by the Supreme Court in a petition before this judgment.

The case is very interesting, in the light of potential copying within software development. From what this writer understands, the appropriation and repurposing of code is very common in the industry, and this decision could create an environment where companies would be more readily okay with pursuing copying. Google seemingly will not have the option to pursue the matter to the Supreme Court, and will end up paying significant damages to Oracle.

Source: JDSupra

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