Today’s Supreme Court Hearing On A $9 Billion Case Involving Oracle And Google Could Reshape The Software Industry

In a landmark moment in the history of the U.S. software industry, the Supreme Court held a hearing today on a long-running legal dispute that pits tech giants Oracle and Google against one another.

The case centers around whether or not a key foundation of today’s increasingly software-driven economy—blocks of code known as “application programming interfaces”, or APIs—is subject to copyright protection. Oracle claims Google infringed copyright when it used elements of the Oracle-owned Java programming language to build its Android operating system, which now powers billions of smartphones and other devices. Google denies the claim, which involves about 11,500 lines of code out of millions of new lines that it wrote to create Android. The two companies have been battling one another in the courts for over a decade, with Oracle demanding $9 billion in compensation.

The outcome of this epic legal fight matters because APIs, which enable different software applications to talk to one another and swap information, are essential for building larger systems. Developers at startups and large companies have been copying them for free for years and using them to knit together complex tapestries of applications that power online commerce platforms, advanced manufacturing facilities and other elements of modern digital economies.

If the Supreme Court ultimately rules Google did infringe Oracle’s copyright when it copied the Java APIs in question, it could trigger a tsunami of litigation as other companies seek payments for their APIs too. Google’s supporters, which include Microsoft and IBM, argue this will prove a costly headache for many companies. Some fear it will also have a chilling effect on startups and further boost the immense power of cash-rich tech platforms—including, ironically, Google itself—that are already under intense political and regulatory scrutiny.

“Huge corporations like Google can take expensive chances,” said Corynne McSherry, legal director of the Electronic Frontier Foundation, in an emailed comment to Forbes. “Small startups and their investors will not.”

Fair questions

Oracle and its supporters, which include the Trump administration whose Solicitor General’s office argued on behalf of the company in today’s hearing, say that without adequate copyright protection for their code, software developers will have less incentive to innovate. They also oppose Google’s position that, even if APIs are deemed subject to copyright, reproducing them is a case of “fair use” that should not be penalized.

“We are confident that the Supreme Court will agree with us that all software is covered by copyright and that Google’s copying for its own commercial advantage and expediency can’t possibly be fair use,” said Dorian Daley, Oracle’s general counsel, in a statement issued by the company today.

During the hour-and-a-half hearing, Justices Brett Kavanaugh and Samuel Alito noted that some of Google’s allies had warned them that if they ruled in favor of Oracle they would ruin the tech industry. Neither seemed wholly convinced of the risk. “I’m not aware that the sky has fallen in the last five or six years,” Kavanaugh said, referring to the fact that in 2014 Google had lost its first appeals court case.

Keyboard wizards

Amongst other things, the justices considered an argument for Google’s case that likened a key part of API code to the QWERTY keyboard system. Once people had learned to use that particular layout, ran the logic, it wouldn’t make sense to create a different one—or to let QWERTY’s creator charge a copyright fee each time the original layout is reproduced. Justice Stephen Breyer seemed particularly taken with this argument.

Because of the recent death of Justice Ruth Bader Ginsberg, Google really needs five of the remaining eight justices to rule in its favor to overturn an appeals court ruling that went against it. If the verdict is four versus four, then it is likely the prior judgment will be affirmed—though there could be other scenarios. Tyler Ochoa, a law professor at Santa Clara University in California who filed a friend-of-the-court brief in support of Google, said the current justices could also choose to wait until a new one has been appointed and then hold a further hearing.

One way or another, it is likely to be several months or more before a definitive ruling emerges.

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