Could a lawsuit derail Android? Understanding Oracle’s threat to Google (Digital Trends)

Why Oracle wants a cut of Google’ cash

Oracle claims that, instead of being a wholly independent clean-room implementation of a Java VM, Google knowingly, repeatedly, and directly infringed on both copyrights and patents related to Java technology. In total, Oracle claimed Dalvik violates seven U.S. patents (numbers 6,125,447, 6,192,476, 5,966,702, 7,426,720, RE38,104, 6,910,205, and 6,061,520) as well as a series of copyright violations that includes literal file copying (totaling a dozen files, including eight that were decompiled) along with 37 instances of API specifications. The API specs are ways that programmers interact with the Dalvik virtual machine that are essentially identical to the way programmers would interact with Oracle’s Java platform.

The case filings from both sides have been updated since the initial suit was filed, and Judge Alsup has issued preliminary rulings on motions from both sides. Oracle is currently seeking between $900 million and $1.4 billion for the patent infringement alone, and wants an additional 15 percent of mobile advertising revenues generated by the entire Android platform. Last year, Google said the mobile ad revenue generated from Android was worth about $1 billion a year, which would put Oracle in line for an additional $150 million a year, assuming Android experienced no market growth at all. Of course, Android has grown during the last year, which could make a 15 percent claim on Android ad revenues worth mammoth amounts of cash.

So far, Google has had almost no success getting Oracle’s copyright violation claims set aside before the case goes to trial. The judge has only agreed with Google that the names of classes, methods, and files aren’t copyrightable: All the rest of Oracle’s copyright violation claims stand.

Google has been seeing more success in its efforts to get Oracle’s patents ruled invalid. Oracle initially asserted 132 claims of violation against seven Java patents, and re-examination by the U.S. Patent and Trademark Office has, so far, whittled that down to 26. Of those 26, 11 are “mirrors,” meaning only 15 of the remaining claims are unique. The patent re-examination process is not complete, and final rulings on the validity of patents and whether they’ve been violated are notoriously divergent from initial rulings. (They also tend to be appealed and re-appealed over a period of years, making the process even longer.) However, even if all of Oracle’s existing claims don’t hold up, it seems likely that a few will. In particular, Google’s challenge to Oracle’s ’520 patent seems likely to fail.

What happens to Android?

Google has indicated that it is willing to sit down with Oracle and try to work out a settlement, and the companies have had conferences to try to work out their differences. However, so far the companies don’t appear to be anywhere near an agreement.

In that sense, Judge Alsup’s decision to postpone a trial until 2012 is a victory for Google. The decision removes immediate pressure of a jury trial targeting both patent and copyright claims, and gives the patent re-examination process more time to run. The longer it takes the case to get to trial, the greater the chances that more of Oracle’s patent claims may be declared invalid before being presented to a jury.

However, a delay going to trial also lets Oracle’s legal action continue to linger as a cloud over the Android platform, which is already being encumbered by Microsoft playing hardball with Android licensees as well as Apple taking on HTC for patent infringement. (And let’s not forget: Steve Jobs now-famously called Android a “stolen product” and vowed to destroy it, although only time will tell if a post-Jobs Apple is still willing to go thermonuclear over Android.)

Google may tout Android as “free and open,” but if Oracle wins, it’s going to be paying Oracle for nearly every Android device on the market. Google could end up to making a large initial payment to Oracle to cover infringement up to the date of the ruling, then (worst case) handing over a significant chunk of the revenue it earns off the Android platform to Oracle in perpetuity.

Can Google change Android to dodge Oracle?

At a technical level, Google could, in theory, wiggle out of its battle with Oracle by stepping away from the Dalvik virtual machine. However, any version of Android without Dalvik would either:

• require a new virtual machine compatible with Dalvik executable files, or
• be incompatible with the vast majority of Android software.

Either option would entail a significant software development process at Google, and while we don’t know for sure, there’s no indication the company has started down either road.

The first option would essentially be Google’s second run at creating a Java virtual machine from scratch that didn’t infringe on Oracle copyrights. However, maintaining compatibility with Dalvik’s executables (so existing Android software could run) could well wind up infringing the same patents Google is fighting now. In other words, Google might wind up running very fast only to find itself in the same place.

The second option could get out from under Oracle’s patent and copyright hammer, but would make the fragmentation of today’s Android ecosystem look trivial. Today, most Android software works on a particular version of the platform (or newer), with some apps limited to specific devices or classes of devices. However, a version of Android that can’t run software built using Dalvik would leave the vast majority of existing Android software behind. That’s the same gamble Microsoft is taking with Windows 8 on ARM: It won’t run legacy x86 applications. Microsoft might be able to get away with spawning a new Metro-only ecosystem built around tablets and mobile devices, or may not. We don’t know yet. However, Google is unlikely to cut its existing Android platform off at the knees by announcing a forthcoming version of Android won’t be able to run most existing Android software, and Google’s partners are almost certainly not willing to let that happen. Google would be better off sunsetting Android and moving on to “Cyborg” or some all-new mobile OS.

In either scenario, Google can’t make previous and existing versions of Android disappear. If Google is found to have violated Oracle’s copyrights or patents, it will will be liable for damages and unjust profits gained from all the Android devices on the market today.

What can Google do?

At this stage, Google’s options seem to boil down to paying Oracle now, or paying Oracle later. For the moment, Google wants “later.”

If more of Oracle’s patent claims are invalidated, Oracle’s position gets weaker and Google can leverage that to negotiate for more favorable settlement terms. However, if significant portions of Oracle’s patent claims hold up, or the case goes to trial, it will likely be in Google’s interest to cut its losses as quickly as possible… and that will give Oracle the advantage.

It’s unlikely either company truly wants the case to go to a jury. Juries and open court proceedings are unpredictable, and while settlements can be quick, jury trials and appeals processes can draw proceedings out for years. Ultimately, Google doesn’t want Oracle looming over Android’s future any longer than necessary.

This article was originally posted on Digital Trends

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