Image source: Supreme Court of the United States
The US Supreme Court handed Alphabet Inc’s (Nasdaq: GOOGL ) Google a major victory Monday, bringing an end to a long-running dispute with Oracle Corporation (NYSE: ORCL ) over the use of software and copyrights.
The Court sided 6-2 with Google, saying the tech giant did nothing wrong in copying code to develop the Android operating system now used on most smartphones, thereby overturning a lower court’s ruling that Google's inclusion of Oracle’s software code did not constitute a fair use under US copyright law.
When Google built Android back in 2007, it wrote millions of lines of new computer code while using about 11,500 lines of code copyrighted as part of Oracle’s Java platform.
In 2010, Oracle sued Google, accusing it of plagiarizing the code, as well as the way it is organized, to create Android and make billions of dollars in revenue. A judge rejected the copyright claim against Google, but the ruling was overturned on appeal. In 2018, a federal appeals court ruled in Oracle’s favor, prompting Google to seek Supreme Court review.
Google has argued that what it did is a common practice in the industry and helps further technical progress. It also maintained there is no copyright protection for the purely functional, noncreative computer code it used — something that could not be written another way.
Oracle, however, believes Google has “committed an egregious act of plagiarism” and had been seeking more than $8 billion in damages, though Reuters reported renewed estimates for the verdict went as high as $30 billion.
In Monday’s ruling, Justice Stephen Breyer wrote, “Google’s copying was transformative,” adding that the company repurposed Oracle’s code in a way that helps developers create programs. He also wrote that permitting Oracle to enforce a copyright on its code would harm the public making it a “lock limiting the future creativity of new programs” because “Oracle alone would hold the key.”
Breyer also wrote that in reviewing a lower court's decision, the justices assumed “for argument’s sake, that the material was copyrightable.”
"But we hold that the copying here at issue nonetheless constituted a fair use. Hence, Google’s copying did not violate the copyright law,” he wrote.
In a dissenting opinion, Justice Clarence Thomas and Justice Samuel Alito said the court should have found that Oracle’s work deserved a copyright and Google’s use was “anything but fair.”
Noting that Apple Inc (Nasdaq: AAPL ) and Microsoft Corporation (Nasdaq: MSFT ) did not resort to copying like Google to create mobile operating systems, Thomas said the ruling could harm competition.
If “companies may now freely copy libraries of declaring code whenever it is more convenient than writing their own, others will likely hesitate to spend the resources Oracle did to create intuitive, well-organized libraries that attract programmers and could compete with Android,” he wrote.
In a statement to The Associated Press, Google’s chief legal officer, Kent Walker, called the ruling a “victory for consumers, interoperability, and computer science.”
“The decision gives legal certainty to the next generation of developers whose new products and services will benefit consumers,” Walker said.
Oracle’s executive vice president and general counsel, Dorian Daley, said in a statement, “The Google platform just got bigger and market power greater — the barriers to entry higher and the ability to compete lower. They stole Java and spent a decade litigating as only a monopolist can. This behavior is exactly why regulatory authorities around the world and in the United States are examining Google’s business practices.”
Justice Amy Coney Barrett did not participate in the ruling because she had not yet joined the court when the justices heard oral arguments in October 2020.
Source: Equities News