Oracle Ups Java Damages Demand to $9.3B

Oracle has asked for US$9.3 billion in damages in its multiyear lawsuit against Google over the use of Java in Android, according to a report filed last week in federal court.

That amount is reportedly about 10 times what it had initially asked for.

The next hearing in the case is scheduled for May 9 in U.S. District Court for the Northern District of California.

James Malackowski, a damages expert hired by Oracle’s lawyers, set the company’s actual damages at about $500 million and apportioned Google’s profits from the allegedly infringed Java copyrights at about $8.8 billion.

He used the following reasoning:

• The allegedly infringed Java copyrights were critically important to the timing of Google’s launch of the Android platform;
• Google’s strategy in launching Android was to ensure a continuing revenue stream from its search services in connection with mobile advertising, which has generated “significant advertising revenue and profit” for Google. The Android platform is a “critical component” of Google’s overall mobile search business;
• The allegedly infringed Java copyrights are necessary for, and critically important to, the ongoing operation of the Android platform and its applications;
• Absent Google’s use of the allegedly infringed copyrights, Sun Microsystems would have generated significantly more licensing revenue, at least from its Java ME platform, and was positioned strategically to introduce a successful mobile platform, either by itself or through a licensee.

Google’s Reaction

Google responded by filing a motion last week to exclude portions of Malackowski’s report.

The motion contends the following:

• Malackowski failed to conduct any meaningful analysis supporting his claim that the alleged infringement caused Google to earn advertising revenue;
• Once he deducted Google’s costs to reach a profit number, he didn’t conduct apportionment of Android at all;
• His analysis of the profits Oracle claimed to have lost was based “on a single 2008 Sun document projecting revenues for licensing Java ME — a different Java platform from Java SE, and not even the accused work here — through 2010 only projecting an 8.3 percent increase from 2009 to 2010” and a private conversation with former Sun employee Michael Ringhofer, who now works for Oracle;
• Malackowski speculated that, had Google not allegedly infringed, Oracle would have created its own full-stack platform and made just as much profit as Google has made indirectly from Android using an entirely different business model from Oracle’s.

However, Oracle never came close to creating it own platform, despite years of trying, Google said.

The Importance of the Case

The issue to be heard in May is the question of fair use.

“Java’s still in relatively wide use, and if Google’s seen as infringing, then it’s likely Oracle will go after others,” suggested Rob Enderle, principal analyst at the Enderle Group.

For example, an Oracle win could open the door to massive judgments against other Linux derivative products, he told the E-Commerce Times. A Google victory largely would maintain the status quo.

An Oracle win “could have a real chilling effect on the tech community [because] Java is open source,” said Mike Jude, a research program manager at Frost & Sullivan.

A victory by Google would be “very good for tech [because] most of the innovations in Java have been in the open source community,” he told the E-Commerce Times.

The impact on the industry “will depend on how narrowly or broadly the court rules in the end,” noted Al Hilwa, a research program director atIDC Seattle. A narrowly interpreted victory for either side “may only impact APIs of similar nature and complexity.”

Who Ya Gonna Bet On?

The May 9 hearing will be held before Judge William Alsup, who heard the case in 2012 and ruled that APIs could not be copyrighted. The U.S. Federal Circuit Court of Appeals reversed that decision in 2014.

“The reversal suggests this [hearing] will roll back more into Oracle’s favor,” Enderle said, but “the extreme amount of damages it’s asking for is likely beyond what a court will be willing to grant them.”

However, Hilwa told the E-Commerce Times, “the case has taken many turns, and I’m not going to predict how it will turn out.”