The U.S. Supreme Court issued a remarkable opinion in the long-running dispute between Oracle America and Google over Google’s copying of Oracle’s Java SE API for use on the Android platform. BakerHostetler has followed this case for quite some time, and our prior blog posts providing extensive background can be found here, here and here.

The opinion is remarkable both for what it did and did not decide. The Court overruled the Federal Circuit’s decision to reject a jury’s determination of fair use, and found that Google’s copying of a specific portion of the Java API, its declaring code, was a fair use as a matter of law. In doing so, the Court upheld the Federal Circuit and ruled that although fair use is a mixed question of law and fact, application of the law to facts was for judges to decide de novo. The Court then proceeded to independently analyze each fair use factor and overturned the Federal Circuit’s fair use conclusion, finding that all four fair use factors favored Google. In doing so, the Court arguably expanded the scope of the “transformative use” analysis under the first fair use factor, finding that context shifting (here, using a computer program on a smartphone platform instead of a desktop platform) is sufficient to satisfy the transformative use requirement.

The opinion is also remarkable, however, for what it did not address. It assumed without deciding that the declaring code was copyrightable. The Court did not address the Federal Circuit’s reinvigoration of the protection of “non literal elements” of software source code such as sequence, structure and organization. The Court did not address arguments that the declaring code was purely functional in nature and thus unprotectable as a method of operation. The Court did not address important questions regarding the copyright merger doctrine, such as whether the merger determination should be analyzed at the time the work is created by an author (in which case no merger occurs if the author had more than one way to achieve a certain result at the time of creation) or after the work has been distributed (in which case merger might destroy the copyright if the author’s selection dictates functionality that has been adopted by the marketplace).

Several commentators noted that the Court seemed concerned during oral argument about doing harm to the U.S. technology sector by virtue of its opinion. Proponents on both sides threatened doom—a copyright maximalist decision in favor of Oracle would throttle innovation and upset established norms, one side warned, while a copyright minimalist decision in favor of Google would take the wind out of the sails of innovation and take away an important incentive to innovate, warned the other side. This opinion appears to be a monument to judicial restraint—the Court expressly attempted to answer only as many of the legal questions before it as necessary to resolve the dispute between the parties. The Court went to great lengths to point out that the declaring code at issue here “differs … from many other kinds of copyrightable computer code,” “differs from the mine run of computer programs,” is “inherently bound together with uncopyrightable ideas … and new creative expression,” and is “further … from the core of copyright” than “most computer programs (such as the implementing code).” Thus, it appears much of the status quo of the scope of copyright protection for computer programs, including protection for non-literal elements, remains intact. Moreover, the Court appears to have given future litigants ample fodder to distinguish this ruling as severely limited to its facts.

Although this opinion may not have significant impact on clarifying the scope of protection for computer programs, it may prove very influential in future non-computer software fair use cases. The Second Circuit’s recent opinion in The Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, issued a little over a week ago, has been viewed as a possible retreat from other fair use decisions that have expanded the notion of what constitutes a transformative use under the first fair use factor. The Court noted with approval opinions from other circuits that have criticized the Second Circuit’s approach, suggesting that “transformative use” can be read so liberally as to swallow the notion of a “derivative work,” one of the express exclusive rights granted by § 106 of the Copyright Act. See Kienitz v. Sconnie Nation LLC, 766 F.3d 756, 758 (7th Cir. 2014) (“To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under [17 U.S.C.] § 106(2).”). A popular example is the shifting of a novel from the book context to the audiovisual context by virtue of a screenplay. Although all courts recognize this kind of shifting as constituting a derivative work and not a fair use, the Oracle Court’s decision would seem to blur the line even further between works that are infringing derivatives and those that are transformative platform changes. Here, the mere fact that Google moved Java onto smartphones was deemed sufficiently transformative.

As with many U.S. Supreme Court decisions, the opinion itself lends support to the legal positions of parties on both sides of several issues. How it will be applied, and what its legacy will be, will be determined over many years to come.