Google just won its epic legal battle with Oracle -- here's why that matters

On Thursday, a jury found that Google didn’t violate Oracle’s copyright with its Android operating system — ending the $9 billion lawsuit that had the whole tech industry on edge.

Oracle had alleged that Google violated its copyright when it put pieces of the crucial Java technology into Android, which now ships on 80% of smartphones sold. Google’s defence hinged on “fair use,” the idea that it was legally allowed to use Java as it did.

At the core of the conflict was a fundamental culture clash over “open source,” or code that’s made freely available, under a far more permissive copyright, for any use people can find for it.

Open source is a pillar of the software industry, with a huge and thriving community of developers and companies who rely on it to various extents. Even Microsoft, which spent a long time opposing open source, has come around to embrace it.

The jury found in Google’s favour. But if Oracle v. Google had gone the other way, it could have had huge ramifications for the way software is built and marketed. It would have meant a big payday for Oracle, and a total shift in the industry.

What is open source?

The core concept of open source, as former Microsoft CEO Steve Ballmer once infamously noted, is akin to communism. Developers, including teams of employees at companies like Google, Netflix, and Apple, share code that they have been working on with the world. In return, they reap the benefits when the community improves it.

If you hang out with open-source people long enough, you’ll end up hearing some variation on “all of us are smarter than any one of us.” Because successful open source projects have dozens, hundreds, or thousands of programmers improving the same code from different angles, the software can get way better, way faster than any proprietary tool.

That’s why open source is increasingly in vogue with tech companies who find themselves in a race to improve their products as fast as consumers get bored with them. Apple uses the open source Mesos software, a tool first pioneered at Twitter and Airbnb, to manage the huge number of requests Siri gets every day.

It’s also extremely common for companies, especially startups, to take open-source software and use it as the basis for a real commercial product that they will actually sell. Open source presents the opportunity to avoid reinventing the wheel, and instead focus on building a viable product.

For instance, a scientific paper that Google wrote in 2003 became the genesis of Yahoo’s Hadoop data-analysis software in 2006. When Yahoo released Hadoop as open source, it became the foundational technology at a string of hot startups that include Hortonworks, Cloudera, and Platfora.

Which brings us back to Oracle v. Google.

Where Google got into trouble

The testimony in this lawsuit tells the whole story.

When Google was first building Android around 2005 and 2006, it knew that Apple was building something good with what would become the iPhone.

To get their operating system out the door faster, Google decided that instead of building certain crucial pieces itself from scratch, it would use Java — a well-established technology that lots of would-be Android app developers were already familiar with.

Alphabet chairman and former Google CEO Eric Schmidt testified in this case that he went to Sun Microsystems (now owned by Oracle), the original developer of Java, to try to properly licence Java for $30 million to $40 million. Those talks fell apart, apparently because Sun was worried about giving up control of the mobile space.

Google cofounder Larry Page testified that Google did use a whole bunch of Java code in Android, skipping the bits that they thought Sun alone had the rights to and rewriting what they couldn’t take in-house.

But Page says that Google only did this because Java was available as open source. Android cofounder Andy Rubin further testified that Google didn’t believe that the parts of Java that they used were copyrighted (though he’s in hot water over an email he sent that suggests otherwise).

Originally, Google was claiming that Oracle could not copyright APIs, or application programming interfaces, which are the “hooks” that lets software and websites talk to each other. An API is how, say, “Candy Crush Saga” logs you in with a Facebook account.

But a court decision ruled that the pieces of the code that Google used were in fact Oracle’s intellectual property under the law. So Google invoked a “fair use” defence — admitting that Oracle owns the copyright to those pieces of Java, but claiming that Google should be allowed to use the code commercially.

Between the lines

If Google’s fair-use defence didn’t work, it could have set an alarming precedent for the tech industry.

Open source is the way of the world for many, many technology companies. And the kinds of API code that Oracle has taken issue with here are of a kind that makes their way into many, many pieces of software. It’s not quite ubiquitous, but it’s close.

Safra CatzOracleOracle CEO Safra Catz.

A ruling against Google here would have meant that established tech companies like Oracle could have a new source of revenue: Finding startups and developers that use Java or other technology that could be found to be copyrightable, and claiming damages.

If Google couldn’t have mounted a successful defence, it’s unlikely anyone else would have better luck.

It wouldn’t have been great news for software innovation, by any stretch. A big part of open source is free and open communication and collaboration. If developers are worried that they might get sued, the next great open-source software project may simply never get built.

And while it seems likely that Oracle will appeal this case, Google has successfully fended off that worst-case scenario for now.

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