Key Takeaways from Google’s Supreme Court Copyright Win Over Oracle

Rothwell, Figg, Ernst & Manbeck, P.C.
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The Supreme Court’s recent landmark ruling in Google v. Oracle ended a decade-long legal battle between the tech giants, finding that Google’s copying of over 11,000 lines of Oracle’s Sun Java application programming interface (“API”) code was permissible fair use under copyright law. This ruling means that Google won’t have to pay billions of dollars in damages to Oracle. It also has huge implications for the broader software and tech industries.

While the Supreme Court was presented with two questions– first, whether APIs can be copyrighted and second, whether Google’s use of the Oracle’s Java API constituted fair use– the majority opinion declined to address the question of copyrightability. Recognizing the “rapidly changing technological, economic, and business-related circumstances,” the high court put aside the larger question to instead focus on resolving the dispute at hand, assuming for argument’s sake that the Sun Java API falls within the definition of copyrightable material.

Turning to the question of fair use, the Supreme Court applied the well-known 4-factor test, concluding that all four factors weigh in favor of Google.

  • The purpose and character of the copying. Copying is more likely to be fair if it is “transformative,” or used to do something new and innovative. Here, the Supreme Court found that Google’s use of the Oracle’s API code was transformative because it was used to create a new platform to enable programmers to create Android apps.
  • The nature of the copyrighted work. Creative or expressive works are afforded stronger copyright protection that those that have functional or utilitarian features. In this regard, the majority distinguished between “implementing code,” which instructs the computer to perform a task and requires some level of creativity in drafting, and “declaring code,” which associates a programmer’s commands with the desired implementing code through a method-calling system. Reasoning that the declaring code copied by Google is “further than are most computer programs…from the core of copyright,” because it is “inextricably bound up with” non-copyrightable ideas, the court found that this factor favored fair use.
  • The amount and substantiality of the portion used in relation to the copyrighted work as a whole. The majority noted that although Google copied 37 API packages (about 11,500 lines of code), this amounted to only a tiny fraction (less than 1%) of the nearly 3 million lines that make up Oracle’s entire API.
  • The effect of the use on the market for the original copyrighted work. While Oracle argued that Google’s copying had undermined its business licensing the Java platform, the majority noted that Oracle had tried and failed to enter the smartphone market for reasons unrelated to Google’s use of the code.

The Supreme Court’s decision appears to be a narrow one in that it addressed only the copied declaring code from the Java API (e.g., as opposed to the implementing code) and it did not disturb the statutory legal standard for fair use itself. However, as a practical matter, the ruling may serve to further weaken the scope of copyright protection over software programs because of how the fair use standard was applied to software programs in general. The ruling and its progeny may therefore represent a potentially major victory for fair use proponents, and could have far-reaching impacts within the software and tech industries. A few key takeaways from the decision:

First, this ruling favors tech start-ups. As explained by Microsoft in its amicus brief submitted to the Supreme Court in support of Google, “developers rely on sharing, modifying, and enhancing previously developed code to create new products and develop new functionality. Both a cause and effect of this collaborative development is the increased demand for seamless interoperability and compatibility–i.e., the ability of different products, devices, and application to communicate and work together without effort from the consumer.”

Without the ability to reuse some of software’s foundational functional aspects to ensure product compatibility, start-ups would face extreme hardship in breaking into established software markets and competing with incumbent software providers. In light of this decision, it is conceivable that emerging tech companies can continue with the industry-wide standard practice of re-implementing APIs for new uses and technological advancement.

Second, companies that license third party software may want to review the fine print of those license agreements. Through a careful review with an attorney, companies may want to consider whether the software that they’re paying for, especially that software which is akin to the more functional “declaring code,” would actually be fair use under this decision.

With respect to open-source licenses, many such licenses rely on copyright law to impose terms and conditions on use of the code (e.g., to make the source code freely available under a copyleft license), the Supreme Court’s decision could narrow the potential scope of such restrictions in the open source licenses parties may be involved in.  It follows that the ruling could also narrow the scope of copyright protection over a company’s own software if such software is used by others and falls within the fair use framework outlined by the Court and progeny on a going forward basis.

On the other hand, a word of caution. Some IP commentators have deemed the Supreme Court’s ruling a “license to copy,” indicating that we may see more claims of fair use and emboldened copyists. As the copyrightability of APIs is still up in the air, and given the broad implications of the fair use exception to copyrights, software and tech companies should revisit other forms of intellectual property protection to adequately protect their APIs and software code, such as utility patents and trade secrets.

Finally, this decision highlights the fact that the law continues to lag behind tech. Courts and the tech industry are still grappling with the aftermath of the Alice/Mayo decisions in determining which computer-implemented inventions may be patentable. Consumers question whether we need stronger antitrust laws to reel in the power and outsized influence of tech giants such as Amazon, Apple, Facebook, and Google. And the questions of API copyrightability and what may constitute a “transformative use” with respect to software have yet to be addressed.

Given the fast pace of tech, and the ever-evolving legal landscape in this space, it is important to regularly consult with legal counsel to best protect, enforce, and defend your innovations.

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