Why many in Silicon Valley breathed sigh of relief at Google-Oracle ruling

A federal jury sided with Google in a long-running copyright battle with rival Oracle on Thursday, saying its use of Oracle's code to create its Android software was 'fair use.'

First Look

A federal jury handed Google a major victory on Thursday in a long-running copyright battle with rival Oracle over the tech giant’s Android software.

Google's use of Oracle's Java programming tools to build Android – now the world's leading mobile operating system – was protected under the "fair use" provision of copyright law, the court said.

The ruling in US District Court in California means Google avoids the $9 billion in damages Oracle was seeking for allegedly violating its intellectual property. But perhaps more significantly, it reassures software developers who feared a victory for Oracle would lead to more lawsuits and less cooperation between companies that create the underlying means for software applications to communicate with each other.

Oracle immediately said it would appeal the jury's decision. "We strongly believe that Google developed Android by illegally copying core Java technology to rush into the mobile device market," Oracle General Counsel Dorian Daley said in a statement.

Google praised the court's ruling in a statement, calling it "a win for the Android ecosystem, for the Java programming community, and for software developers who rely on open and free programming languages to build innovative consumer products."

The case, which featured testimony from prominent figures at both companies, was closely watched in Silicon Valley.

Google co-founder Larry Page and Eric Schmidt, the executive chairman of Alphabet, the holding company that owns Google, sought to convince jurors that the company had used small pieces of Java to create its own original product.

Executives from Oracle, including co-founder Larry Ellison – who appeared by video – argued the tech giant had essentially stolen pieces of the company's code in creating Android. The tech giant had cast itself as above the law, they argued.

Safra Catz, Oracle's co-chief executive officer, told jurors that at a bat mitzvah in 2012, Google general counsel Kent Walker told her, "You know, Safra, Google is this really special company, and the old rules don't apply to us."

"I immediately said, 'Thou shalt not steal,'" Ms. Catz testified. "It's an oldie but goodie."

Oracle had also argued that while Google offers its Android software to mobile phone companies for free, it reaps billions of dollars in profits from advertising on its mobile services, such as maps and its search engine.

But jurors sided with Google’s argument that its use of Oracle's code was "fair use," an exemption of copyright law that's typically invoked to allow critics and artists to quote or reuse small parts of others' works under certain conditions, such as parodying them.

Last fall, Google also won a major fair use battle with authors who had claimed that its Google Books software violated their copyrights. Last month, the US Supreme Court denied review of a federal court's ruling, affirming the court's decision that Google Books was "transformative fair use."

The Oracle-Google verdict was a second trial, after a jury in 2012 found Google had infringed on Oracle's copyrights but couldn't agree whether it was justified as fair use.

After the first trial, Judge William Alsup sided with Google, saying the underlying computer language that connects programs, known as an application programming interface, couldn't be copyrighted at all, but a federal appeals court disagreed, sending the case back for a second trial.

For software developers, Google's victory could provide some assurance that using others' APIs to create their own innovative applications would be protected, Al Hilwa, an analyst at global market intelligence firm IDC, told Bloomberg.

"A lot of people have sort of breathed a sigh of relief," he said.

This report contains material from Reuters and the Associated Press.