Is Fair, Fair? A Look into the Supreme Court’s Landmark Decision in Google v. Oracle

By on April 27, 2021
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Author: Ross Kirkbaumer

After a decade of back-and-forth battles in the district and circuit courts, the Supreme Court ruled that Google’s copying of Sun Java’s API was fair use, reversing the Federal Circuit’s ruling that Google’s copying was not a fair use.[1]

Facts

Google obtained a startup firm by the name of Android, Inc. with the goal to develop a software platform for smartphones. Google wanted the Android platform to be “free and open, such that software developers could use the tools found there free of charge.”

During this time, programmers were familiar with using a programming language known as Java created by Sun Microsystems (“Sun”) on its Java SE platform. Google began speaking with Sun about possibly licensing the entire Java platform for the Android smartphone technology, but negotiations were halted, and Google started building a new platform.

Since programmers were already familiar with Java, Google copied around 11,500 lines of code from the Java SE platform so that programmers would be able to easily work with the Android platform. The 11,500 lines of code were part of tool called an Application Programming Interface (“API”).

Specifically, Google copied the “‘declaring code,’ instructions that describe pre-written programs in Java.”[2] According the Court, “[W]ithout that copying, programmers would need to learn an entirely new system to call up the same tasks.”

Fair Use

Under the Copyright Act, 17 U.S.C. § 107:

“[T]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(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.

The Majority Decision

With Justice Breyer delivering the opinion for the majority, the Court decided not to take up the issue of whether the lines of code were copyrightable stating that “purely for argument’s sake . . . the entire Sun Java API falls within the definition of that which can be copyrighted.” As discussed below, the Court held that the four factors above weighed in favor of fair use.

First Factor

The Supreme Court stated that the copied declaring code “embodies a different form of creativity,” highlighting the fact that Sun’s intent was to attract programmers and to make its API “open.” Additionally, the Supreme Court contrasted the declaring code from computer programs by explaining the declaring code’s significance “lies in its efforts to encourage programmers to learn and to use [Sun Java’s API] so that they will use (and continue to use) Sun-related implementing programs that Google did not copy.”

Accordingly, the Court concluded that “the declaring code is, if copyrightable at all, further than most computer program[s] . . . from the core of copyright.” Because of this, the nature of the declaring code weighed in favor of fair use.

Second Factor

By examining the purpose and character of the work, the Court stated that Google’s purpose of using the Sun Java API was to create new products by expanding the use and usefulness of the Android-based smartphones. The Court explained that “[T]o the extent that Google used parts of the Sun Java API to create a new platform that could be readily used by programmers, its use was consistent with that creative ‘progress’ that is the basic constitutional objective of the copyright itself.”

The Court emphasized that the jury during the district court proceeding heard a variety of ways in which re-implementing an interface can further the development of computer programs: (1) shared interfaces are necessary for different programs to speak to each other; (2) re-implementation of interfaces is necessary if programmers are able to use their acquired skills; (3) reuse of APIs is common in the industry; (4) Sun had used pre-existing interfaces in creating Java; and (5) Sun executives thought that widespread use of the Java programming language would benefit the company.

Since the purpose and character of Google’s copying was transformative, this factor weighed in favor of fair use.

Third Factor

With respect to the third factor, the Court contemplated whether the 11,500 lines of code should be viewed in isolation or as one part of the greater whole. The Court noted that Google did not copy the lines of code because of their creativity or beauty, but because programmers had already learned to work with Sun Java API’s system and it would have been incredibly difficult to attract programmers to build its Android smartphone system without the lines of code.

The Court ultimately held that “Google’s basic objective was not simply to make the Java programming language usable on its Android systems. It 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.” Therefore, the substantiality factor weighed in favor of fair use.

Fourth Factor

For this particular factor, the Court pointed out that it must consider the amount of money that Oracle might lose, the source of the loss, and the public benefits the copying will likely produce.

With respect to the amount of money lost, the Court explained that the jury could have found that Google and Android did not harm the actual or potential markets for Java SE. The Court noted that based on the evidence, Sun was poorly positioned to succeed in the mobile phone market and there was evidence that Android and Java SE were operating in two distinct markets.

In addressing the source of the loss, the Court stated that Google’s copying helped it make “a vast amount of money” and enforcement by Oracle could have given Oracle “a significant share of these funds.” The Court, however, affirmed this sub-factor weighed in favor of Google because the “source of Android’s probability ha[d] much to do with third parties’ . . . investment in Sun Java programs.”

In discussing the public benefits, the Court noted strongly that Oracle’s enforcement would risk harm to the public because the enforcement could have inhibited “creative improvements, new applications, and new uses developed by users who have learned to work with that interface.”

Since all four factors weighed in favor of fair use, the Supreme Court reversed the Federal Circuit’s decision against Google.

What About Justices Thomas & Alito?

In the dissenting opinion,[3] Justice Thomas did not understand why the majority avoided the principal question of whether declaring code is protected by copyright law. According to Justice Thomas, declaring code is copyrightable.

Additionally, Justice Thomas opined that the Federal Circuit was correct in determining that the harm Google cause to Oracle was overwhelming because “Google eliminated the reason manufacturers were willing to pay to install the Java platform,” and “Google interfered with opportunities for Oracle to license the Java platform to developers of smartphone operating systems.”

Impact of Google’s Victory

While the Supreme Court hailed Google as the victor, the jury is still out with respect to who benefits most from this decision. Professor Johnathan Barnett from the University of Southern California, Gould School of Law stated that “the devaluation of IP rights under rulings such as Google v. Oracle is likely to discourage investment by (and in) the inventors, artists, and entrepreneurs who stand at the foundation of a robust innovation economy.”[4] Chicago-Kent College of Law professor Lori Andrews asserts that the Court’s decision was “good news for developers looking to further interoperability of programs” and can have potential benefits for consumers.[5] Further, the Copyright Alliance believes that the decision “‘has the potential’ to broaden the fair use doctrine, something that would open the door to greater unauthorized use of copyrighted material,” and possibly more lawsuits.[6]

A copy of the Court’s opinion can be accessed here.

About the author: Ross Kirkbaumer is an associate and member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. His practice focuses on intellectual property enforcement and litigation. His bio can be found here.
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[1] Justices Breyer, Roberts, Sotomayor, Kagan, Gorsuch, and Kavanaugh ruled in favor of fair use while Justices Thomas and Alito dissented. Justice Amy Coney Barrett did not take part in the consideration of the decision.
[2] Steven Tepp, Google v. Oracle Perspective: Google’s Android ‘Cheat Code’ was to Copy Oracle’s Code, IPWatchdog https://www.ipwatchdog.com/2020/08/05/google-v-oracle-perspective-googles-android-cheat-code-copy-oracles-code/id=123789/.
[3] Justice Thomas filed the dissenting opinion, in which Justice Alito joined.
[4] Johnathan Barret, Have tech platforms captured the Supreme Court?, The Hill https://thehill.com/opinion/judiciary/548813-have-tech-platforms-captured-the-supreme-court.
[5] Madeleine Carlisle, How Google’s Big Supreme Court Victory Could Change Software Forever, Time https://time.com/5952718/google-oracle-supreme-court/.
[6] Ted Johnson, Supreme Court Rules For Google Over Oracle In Closely Watched “Fair Use” Copyright Case; Industry Groups Express Concerns Over Impact On Content Protection, Deadline https://deadline.com/2021/04/google-supreme-court-oracle-motion-picture-association-1234727628/.

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A Positive Shift: The Music Modernization Act and Gaining Better Access to Royalty Payments

By on October 30, 2020
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Author: Ross Kirkbaumer

Signed into law on October 11, 2018 the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (“MMA”) was enacted “to address many of the ancient inequities in our copyright laws that stand between music creators and fair compensation.”1 The bipartisan bill finally recognized the need for the law to catch up with the music industry in the digital age. Recording Industry Association of America President Mitch Glazier stated that “[t]he public policy rationale for the bill’s reforms was demonstrable,” adding that “[t]he gaps or inequities in the laws we were seeking to change were obvious, glaring and indefensible.”2

Title I of the MMA was designed to better improve licensing and royalty payments for songwriters. Before the MMA, digital music providers (“DMPs”) such as Spotify, Apple Music, and Tidal served a notice of intention to obtain a compulsory song-by-song license to either the copyright owner or to the Copyright Office (the “Office”) if the owner was not identified. Instead of going through this process, the MMA now authorizes a blanket licensing system for DMPs to make and distribute downloads or interactive streams of music. These blanket licenses will be administered by a mechanical licensing collective (“MLC”). The purpose of the MLC is to “receive notices and reports from DMPs, collect and distribute royalties, and identify musical works and their owners for payment.”3 A digital licensing coordinator (“DLC”) was designated by the Office to represent licensees (the DMPs) in royalty proceedings.

Since the blanket licenses cannot be given until January 1, 2021, the MMA includes rules and regulations for DMPs during this “transition” period. During this period, DMPs seeking to obtain a compulsory license must continue to do so on a song-by-song basis and DMPs must also serve a notice of intention if the copyright owner is known. If the copyright owner is not known, however, the DMPs do not need to obtain a compulsory license as long as the DMPs, using good faith and commercially reasonable efforts, continue to search for the identity of the copyright owner. If the owner is still unknown on the first day of 2021, then the digital music provider must transfer the royalties to the MLC. This process is referred to by the Office as the limited liability exception.

In order to be eligible for the limitation on liability, one of three scenarios must occur. First, if the DMPs are successful in identifying and locating the copyright owner, they must provide statements of account and pay the royalties to the copyright owner. In the second and third scenarios, the DMPs are not able to locate and identify the copyright owner by the end of the calendar month in which the work was first used. If this is the case, the DMPs must accrue and hold the royalties. If the copyright owner is identified before the blanket license is available, the DMPs must pay the copyright owner the royalties. If the copyright owner is still not identified by January 1, 2021, the DMPs must transfer the royalties to the MLC along with a cumulative statement of account that includes information that would have been provided to the owner had the DMPs knew of the identity of the owner.4

When the transition period rule was publicized, the Office stated that “[t]he intent of the legislation does not signal to the [O]ffice that it should be overhauling its existing regulations during the transition period before the blanket license becomes available.”5 When the Office provided the opportunity for public comments, both the MLC and DLC responded.

The MLC recommended that the cumulative statements of account provided by the DMPs should be delivered at the end of the transition period instead of the pre-existing monthly statements. The MLC also proposed that the statements include additional information including per-play allocations, information about matched shares of a musical work where unmatched shares for the work are reported, information about any applicable earned interest, and information about any claimed or applied deductions or adjustments to the aggregate accrued royalties payable. The DLC claimed that the Office is restricted and cannot require DMPs to provide additional information since it is impractical for DMPs to provide such information and doing so went against the requirements of the MMA. The Office agreed with the MLC, stating that it is “necessary and appropriate to require DMPs to provide additional information to aid the MLC in fulfilling its statutory duty to identify and locate the copyright owners of unmatched works and pay the royalties due to them.”6

The DLC proposed that DMPs should not be required to accrue any royalties that are required to be paid to copyright owners pursuant to any agreements entered into prior to January 1, 2021. The DLC argued that because some DMPs will be required to pay some amount of accrued unmatched royalties to publishers with whom they have direct deals, it will create a conflict between the pre-existing agreement and the MMA. The MLC countered the DLC’s proposal, claiming that it conflicted with the MMA’s requirement that all royalties of the unmatched work be transferred to the MLC. The Office stated that this issue may be best resolved by determining whether a given agreement constitutes a valid license; if the work is matched, then it does not need to be reported to the MLC. Additionally, the Office stated the issue may be better resolved by the relevant parties looking at the language of the agreement rather than a blanket rule given by the Office. While admitting that the issue is nuanced and complicated, the Office declined the DLC’s proposal.

The last day for the public to provide comments on the proposed changes to the transition period transfer and reporting of royalties was on August 17, 2020. GRSM will provide relevant updates regarding the Office’s decision.

About the author: Ross Kirkbaumer is an associate in the Seattle office of Gordon Rees Scully Mansukhani and a member of the firm’s Intellectual Property Practice Group. With a background in intellectual property enforcement, Mr. Kirkbaumer’s interests include copyright and trademark litigation as well as anti-counterfeiting enforcement.
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1 House Introduces Comprehensive Music Licensing Reform Legislation, Sound Exchange https://www.soundexchange.com/news/house-introduces-comprehensive-music-licensing-reform-legislation/.
2 Mitch Glazier, The Music Modernization Act: An Industry Speaking With One Voice (Guest Column), Variety https://variety.com/2018/biz/news/music-modernization-act-guest-post-1202957944/.
3 Musical Works Modernization Act, Copyright.gov https://www.copyright.gov/music-modernization/115/.
4 Music Modernization Act Transition Period Transfer and Reporting of Royalties to the Mechanical Licensing Collective, 85 Fed. Reg. 43,518 (July 17, 2020).
5 Id.
6 Id. at 43,519.

Filed under Copyright