On April 5, 2021, after 10 years of litigation, the U.S. Supreme Court published its decision in the much-watched Google v. Oracle dispute. The Court held that use of certain “declaring code” from the Java API in the Android operating system was a fair use under Section 107 of the Copyright Act. The Supreme Court provided a detailed explication of how, in the context of the copyright in computer code, federal courts should assess the four guiding fair use factors set forth in Section 107: (1) the purpose and character of the use; (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. Because its decision on fair use resolved the dispute before it, the Supreme Court declined to address the “copyrightability” issue raised below: whether the declaring code from the Java API is even protectable by copyright in the first place or is, instead, an unprotectable system or method of operation excluded from copyright.
Some software developers will be disappointed. Many had hoped for a definitive decision that developers are free to use third-party application programming interfaces (APIs) to ensure interoperability and for other purposes. Microsoft, for example, argued in its amicus brief that innovation in the software industry requires free and unfettered access to APIs for interoperability and that the software industry has come to rely on the principles established by a number of appellate courts holding that APIs are functional methods of operation and hence are not subject to copyright protection. By declining to address the copyrightability issue and focusing its decision solely on the fair use defense, the Supreme Court left wide discretion to judges in future cases to determine whether any given unlicensed use of third-party APIs is or is not a fair use. Because adjudication of fair use requires a case-by-case assessment of the four fair use factors, the Supreme Court left open the possibility that developers using third-party APIs can be sued for copyright infringement by the owners of those APIs, and that developers may have to incur substantial legal fees in proving that the fair use defense applies.
The Court did, however, provide a substantial expansion of the fair use defense to cases involving the use of computer code and APIs, endorsing earlier decisions from appellate courts that found in favor of fair use and providing detailed guidance regarding how to assess whether a given use of APIs should be considered a fair use. The Court’s detailed guidance should help support arguments in future cases that unlicensed use of third-party APIs is a protected fair use under Section 107.
Please visit here for more on the origins and history of the 10-year battle between Google and Oracle and the case’s path to the Supreme Court.
The Supreme Court’s Fair Use Analysis
The Supreme Court’s detailed explication of how the four guiding fair use factors set forth in Section 107 of the Copyright Act should be applied to Google’s unlicensed use of the Java APIs represents a significant expansion of the fair use defense in cases involving the copyright in computer code. As explained below, the Court endorsed the reasoning of earlier decisions from the appellate courts finding in favor of fair use in the context of reverse engineering for purposes of interoperability. In assessing “the purpose and character” of Google’s use of the Java APIs, the Court also expanded upon the meaning of what constitutes a “transformative” use. And in its assessment of “the nature and character of the copyrighted work,” the Court broke new ground in explaining the relative weight to be accorded to copyright protection for computer code and APIs relative to other works of expression, finding in particular that APIs, if copyrightable at all, are “further from the core of copyright” and should be accorded only a “thinner” level of protection.
The Court held that the fair use question is a mixed question of fact and law, and that while reviewing courts should appropriately defer to the jury’s findings of underlying facts, the ultimate question of whether those facts showed a fair use is a legal question for judges to decide de novo. That holding could help developers in future cases involving unlicensed use of third-party APIs, in that it will make it easier for the developers to win summary judgment regarding the fair use defense, rather than having to litigate all the way through a jury trial.
The Court, in Stewart v. Abend, expressed significant faith in the role of federal courts in exercising their discretion to determine whether a given use of copyrighted code is a non-infringing fair use under Section 107: “We have described the fair use doctrine, originating in the courts, as an equitable rule of reason that permits courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” (Internal quotes and citations omitted in all quoted instances from the Court’s opinion.)
The background of the fair use doctrine as an equitable doctrine developed by federal judges, the Court noted, “as well as modern courts’ use of the doctrine, makes clear that the concept is flexible, that courts must apply it in light of the sometimes conflicting aims of copyright law, and that its application may well vary depending upon context. Thus, copyright’s protection may be stronger where the copyrighted material is fiction, not fact, where it consists of a motion picture rather than a news broadcast, or where it serves an artistic rather than a utilitarian function.”
The Court noted that “fair use can play an important role in determining the lawful scope of a computer program copyright, such as the copyright at issue here. It can help to distinguish among technologies. It can distinguish between expressive and functional features of computer code where those features are mixed. It can focus on the legitimate need to provide incentives to produce copyrighted material while examining the extent to which yet further protection creates unrelated or illegitimate harms in other markets or to the development of other products.” “In a word, it can carry out its basic purpose of providing a context-based check that can help to keep a copyright monopoly within its lawful bounds.”
We explore below the Court’s explication of the four fair use factors in assessing whether Google’s use of the Java APIs was a fair use:
Nature of the Work
In assessing the nature of the copyrighted work for purposes of fair use, the Court emphasized that some types of expressive works should be accorded less weight than other works. In particular, citing Feist Publications v. Rural Telephone Service Company, functional works, such as computer code and especially APIs, are entitled to a “thinner” level of protection than are more expressive works. In contrast to the Federal Circuit’s criticism of the district court for having conflated issues of copyrightability with the fair use analysis, the Court encourages, or even mandates, that those issues be evaluated in considering what weight to assign to the nature of the copyrighted work in the course of assessing the fair use factors.
The Court emphasized repeatedly that the expression in computer code, and especially APIs, is “inextricably bound” with the underlying ideas or methods embodied in software code, echoing the language typically applied under the merger doctrine in assessing copyrightability under Section 102(b). It found that the declaring code is “inextricably bound together with a general system, the division of computing tasks, that no one claims is a proper subject of copyright.” The Court noted that the declaring code “is inextricably bound up with the idea of organizing tasks into what we have called cabinets, drawers, and files, an idea that is also not copyrightable. It is inextricably bound up with the use of specific commands known to programmers, known here as method calls, that Oracle does not here contest. And it is inextricably bound up with implementing code, which is copyrightable but was not copied.”
The Court held that in assessing the nature of a given work for purposes of fair use, courts should afford less weight to copyright protection for works that are functional in nature than they would for other forms of expression, such as literary works. The declaring code in the Java API “is inherently bound together with uncopyrightable ideas (general task division and organization) and new creative expression (Android’s implementing code) . . . Although copyrights protect many different kinds of writing, we have emphasized the need to recognize that some works are closer to the core of copyright than others. In our view, for the reasons just described, the declaring code is, if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright.” (Emphasis added)
The Court expressly rejected the views expressed by Justice Thomas in his dissenting opinion that “no attempt to distinguish among computer code is tenable when considering the nature of the work, even though there are important distinctions in the ways that programs are used and designed” and that “no reuse of code in a new program will ever have a valid purpose and character, even though the reasons for copying computer code may vary greatly and differ from those applicable to other sorts of works.” The Court also expressly rejected Justice Thomas’ view that “fair use analysis must prioritize certain factors over others,” e.g., that where the use is commercial it should almost never be considered a fair use. “We do not understand Congress,” Justice Breyer wrote for the majority, “to have shielded computer programs from the ordinary application of copyright’s limiting doctrines in this way.” By expressly rejecting the dissent’s efforts to create doubt around whether unlicensed use of APIs could ever be considered a fair use, Justice Breyer and the majority further strengthened and emphasized the vitality of the fair use defense in the context of computer code.
Purpose and Character of the Use
In assessing “the purpose and character” of Google’s use of the Java APIs, the Court emphasized that even where the alleged infringement is for a commercial purpose, where the use of the copyrighted work is transformative, that transformative purpose should weigh in favor of fair use. “In the context of fair use,” the Court wrote, “we have considered whether the copier’s use adds something new, with a further purpose or different character, altering the copyrighted work with new expression, meaning or message.”
“Commentators have put the matter more broadly, asking whether the copier’s use fulfill[s] the objective of copyright law to stimulate creativity for public illumination. In answering this question, we have used the word transformative to describe a copying use that adds something new and important.” The Court rejected the narrow view of the Federal Circuit, and the dissent, that exact copying of computer code can never be considered “transformative” for purposes of fair use, emphasizing that literal transformation of the copyrighted work is not necessary so long as the purpose and character of the use is transformative.
The Court noted that Google’s use of the Java API sought to create new products. It sought to expand the use and usefulness of Android-based smartphones. Its new product offered programmers a highly creative and innovative tool for a smartphone environment. To the extent that Google used parts of the Java API to create a new platform that could be readily used by trained Java programmers, the Court held that its use was consistent with that creative “progress” that is the basic constitutional objective of copyright itself. “These and related facts convince us that the purpose and character of Google’s copying was transformative—to the point where this factor too weighs in favor of fair use.”
The Court expressly rejected the Federal Circuit’s holding that a commercial purpose is effectively definitive in weighing whether a given use of copyrighted code can be considered a fair use under Section 107. The Court noted that “there is no doubt that a finding that copying was not commercial in nature tips the scales in favor of fair use. But the inverse is not necessarily true, as many common fair uses are indisputably commercial. For instance, the text of Section 107 includes examples like news reporting, which is often done for commercial profit. So even though Google’s use was a commercial endeavor—a fact no party disputed—that is not dispositive of the first factor, particularly in light of the inherently transformative role that the reimplementation played in the new Android system.” Based on the Court’s detailed analysis, copyright holders should no longer assume that merely reciting the commercial nature of a defendant’s use will be definitive.
As noted below, throughout its assessment of the four fair use factors, the Court returned repeatedly to its conclusion that Google’s Android platform was transformative in that it was designed for mobile devices, whereas the Java API had been designed for desktop and laptop computers.
Substantiality of the Portion Used
The Court noted that the total set of Sun Java API computer code, including implementing code, amounted to 2.86 million lines, of which the 11,500 lines of declaring code copied by Google were only 0.4 percent. “The substantiality factor will generally weigh in favor of fair use where, as here, the amount of copying was tethered to a valid, and transformative, purpose.” Google’s [legitimate] objective “was to permit programmers to make use of their knowledge and experience using the Sun Java API when they wrote new programs for smartphones with the Android platform.” “In a sense, the declaring code was the key that it needed to unlock the Java programmers’ creative energies. And it needed those energies to create and to improve its own innovative Android systems.” As with the Court’s focus on the transformative nature of Google’s use of the declaration code Java APIs, developers hoping to preserve their fair use defenses should consider how their intended unlicensed use of a third party’s APIs could have some public benefit beyond merely offering a product that competes head-on with the copyrighted work.
Market Effects
The Court held that in addition to considerations of how much money the copyright holder may have lost due to the alleged infringement,courts must consider the public benefits the copying will likely produce. Are those benefits, for example, related to copyright’s concern for the creative production of new expression? Are they comparatively important, or unimportant, when compared with dollar amounts likely lost (taking into account as well the nature of the source of the loss)? The court cited favorably the decision by the U.S. Court of Appeals for the Second Circuit in MCA v. Wilson, which called for a balancing of public benefits and losses to copyright owner when assessing the fourth fair use factor.
In balancing the public benefits of Google’s use of the Java APIs against Oracle’s potential losses, the Court emphasized the important public interest of the large community of trained Java programmers, who stood to benefit from the opportunity to apply their “accrued talents” in Java programming to the new market for mobile applications that would run on Google’s Android platform. Allowing Oracle to lock those developers onto its own proprietary Java platform, the Court reasoned, “would interfere with, not further, copyright’s basic creativity objectives.”
The Court endorsed the reasoning of earlier decisions from the appellate courts that when assessing market effects for purposes of a fair use analysis, courts should not limit their review to the potential negative impacts on the market for the original work. See, e.g., Sony Computer Entertainment v. Connectix Corporation; Sega Enterprises v. Accolade (“An attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression”); Lexmark International v. Static Control Components; (noting that where a subsequent user copied a computer program to foster functionality, it was not exploiting the program’s “commercial value as a copyrighted work”).
Reimplementation of a user interface, the Court noted, allows creative new computer code to more easily enter the market. By endorsing the holdings of the appellate courts in the earlier reverse engineering cases, the Court implicitly resolved any split in prior circuit court decisions in favor of those decisions holding that reverse engineering software code for purposes of interoperability should be considered a fair use. Such approving references should make it easier for future litigants to use those earlier cases in asserting the fair use defense where the facts align.
The Court concluded that the “uncertain nature of Sun’s ability to compete in Android’s marketplace, the sources of its lost revenue, and the risk of creativity-related harms to the public, when taken together, convince us that this fourth factor—market effects— also weighs in favor of fair use.”
Conclusion
The Supreme Court’s fair use analysis is likely to be seen as a watershed moment, even though it does not expressly overturn established precedent or overtly assert new legal principles. Based on the Court’s guidance, assessing fair use will involve a more nuanced analysis that involves considerations of the relative strength of copyright protection that should be accorded to the copyrighted work in question, whether the allegedly infringing use serves a new or transformative purpose, and whether the use serves some broader public interest.
The Court’s expansion of the fair use doctrine likely skews far more in favor of defendants than under prior case law. Indeed, defendants in copyright infringement cases are already seeking to benefit from the Court’s broader view of the fair use defense. For example, the Court’s decision was immediately followed (on April 23, 2021) by Warhol v. Goldsmith, in which the estate of Andy Warhol unsuccessfully asserted the fair use defense in a case brought against it over Warhol’s silkscreens of a Prince photo. There, the Second Circuit has requested briefing as to whether the Google v. Oracle decision should change its assessment of Warhol’s fair use defense. It seems clear that the Court’s decision will have implications extending far beyond software.
As noted above, by declining to address whether the declaration code in APIs are subject to copyright protection in the first place, or if instead they constitute unprotected systems and methods of operation and are excluded from copyright under Section 102(b), the Court left to the discretion of judges in future cases to determine, on a case-by-case basis, whether a given unlicensed use of a third party’s APIs is a fair use protected under Section 107. The Court’s focus on Google’s “transformative” use of the Java APIs has important implications for developers who in the future may wish to make an unlicensed use of third-party APIs. In order to preserve their fair use defenses, developers will want to ensure that any such unlicensed use is for a similarly transformative purpose and does not merely supplant the purpose of the original software. According to the Court’s guidance, developers will also have a stronger chance of maintaining a fair use defense if they can show that their use provides some public benefit beyond merely offering a product that competes with the original software.
