Alphabet Inc (NASDAQ:GOOGL) and Oracle Corporation (NYSE:ORCL) face off this week in a court battle whose outcome could have serious implications on the future of Android and the software industry at large. This week’s showdown is a continuation of a 2014 trial where a court ruled that copyright laws indeed protect JAVA APIs used by the search giant on Android.
$9 Billion Fine
A US district court in San Francisco will now have to determine whether Alphabet’s use of copyrighted API packages amounted to fair use. Oracle stands to be the biggest winner given that a fine of up to $9 billion could be in the offing.
The massive fine is not the only concern that Google will have to worry about. The outcome of the case could have huge implications on how developers approach any interoperable software going forward.
Google finds itself in hot water on the multi-billion lawsuit for abandoning licensing negotiations with Sun Microsystems, which developed the JAVA APIs, in use on Android. Upon acquiring Sun in 2010, Oracle sued the search giant for using the APIs in question without paying licensing fees.
Alphabet in its defense has always insisted that it should be allowed to use Java without paying a fee under the fair use provision of copyright law. The search giant goes on to say that it changed the nature of the APIs in question by adding some code on Android something that Oracle failed to accomplish on its own.
Oracle for its part maintains that the use of Java API’s by Google gave it a leg up in the smartphone business. It says it is especially outraged by the way the search giant paid handset makers to shun Java, which controlled 80% of the smartphone market in the early 2000’s, to switch to Android.
Even if Alphabet is fined the $8.8 billion, it won’t have a huge impact given it generated $75 billion from Android last year. However, such a ruling would give Oracle more advantage in negotiating a better royalty deal for continued usage of Java on Android.