Oracle, Google Fisticuffs Begin in Earnest
The patent system is "rife with economic distortions and perverse incentives," said tech attorney Eric Leland. "The software sector demonstrates this over and over again, with companies registering patents to carve off pieces of technology code and processes as though they are autonomous objects, when in fact quite often [it] is more abstracted, already well used, and its origins cannot be clearly understood to have come from any one person or firm."
Apr 16, 2012 11:43 AM PT
While it won't likely go down as the "trial of the century," the legal showdown between Oracle and Google that began in San Francisco federal court on Monday could still be quite significant. The case has already been characterized as "the World Series of IP cases" by U.S. District Judge William Alsup, who is presiding over the trial.
It could have a substantial impact on intellectual property law, as Oracle seeks nearly US$1 billion in damages and injunctions, claiming that Google used parts of Oracle's Java software to create the Android operating system.
"Java is the central part of the lawsuit," Rob Enderle, principal analyst at the Enderle Group, told LinuxInsider. "This is really fallout from the Sun Microsystems acquisition. Oracle wants to get the money back that they paid for Sun, and in essence they want Google to pay. It might've been cheaper for Google to just buy Sun."
The Patent Game
Key to the case is whether copyright law applies to widely used programming tools, known as application programming interfaces, or APIs. So far, Google has denied that its Android operating system infringes the Java patent and copyrights Oracle acquired when it bought Sun Microsystems.
Although Sun freely distributed the Java programming language, it required users to obtain a license.
"Whether it is a large or small company, playing the patent game is crucial to business," said Laura DiDio, principal of ITIC. "Intellectual property is important assets for any company, and patents are big business. They represent huge revenue streams."
However, this can be a double-edged sword, DiDio told LinuxInsider. "On the negative side, it can mean spending to defend against patent infringement -- and patent disputes are heating up."
The biggest winners are often the patent attorneys and expert witnesses.
"The patent system is broken and rife with economic distortions and perverse incentives," said Eric Leland, a partner at FivePaths.
"The software sector demonstrates this over and over again," he said, "with companies registering patents to carve off pieces of technology code and processes as though they are autonomous objects, when in fact quite often the technology or process is more abstracted, already well used, and its origins cannot be clearly understood to have come from any one person or firm."
Ramifications Could Cook Java
The most immediate implications of this trial for Google, Oracle and other giant technology companies will not be tectonic, said Leland.
If Google loses, its cost for doing business with products relying on the contested Java code will increase dramatically in absolute terms, but not relative to the revenue Google generates, he told LinuxInsider.
"Longer term, the implications for Java may be more severe," stressed Leland.
"Win or lose, Oracle's actions should give pause to companies large and small about investing in Java technology long term. The software industry has evolved to rely on abstracted code unified through APIs to enable integration across complex systems," he pointed out.
"Oracle is building walls to the common use of the very popular Java framework, which, even if Oracle loses, will cause many companies to consider shifting to competing, less-restrictive frameworks," Leland predicted.
On the other hand, should Oracle win, the software sector could be exposed to much more risk.
"Many patents lay claim to technologies and processes that exist in open source and proprietary software alike, making it very difficult for companies to mitigate the risk of lawsuit when developing code," emphasized Leland.
The Money and Human Cost
One other fact is clear: This will not be quick, and it likely won't be clean.
"Trials such as this can drag on," said DiDio. "The average patent suit in any top-20 market can take up to three years to litigate, and cost $5-$10 million."
And then there is the human cost. It can be bad business for the companies, as its employees -- including software engineers -- spend time at depositions instead of doing their jobs. So the question is, why won't the company settle?
"These guys are the Sultans of Silicon Valley -- who is going to tell them no?" quipped DiDio. "Nobody tells these guys no. It could come down to personalities; it could take months at minimum, but possibly years."
There is yet another issue at stake. Sometimes it is just business, and sometimes it's personal. Prior to his death, Apple founder Steve Jobs found himself at odds with Google.
"This is very targeted at Google," said Enderle. "This could be a way for [Oracle's] Larry Ellison to do one last thing for his friend."
Will There Be Resolution?
All things good or bad -- including patent litigation -- do come to an end.
"Android won't be pulled off the market. There would be Occupy Oracle If you took away Android," said DiDio, who emphasized that more likely the companies will dig in their heels, at least for a while.
"Eventually there will be settlement," said DiDio -- "but not before a lot of bloodletting."