Saturday, June 18, 2011

Oracle expert says Google owes between 1.4 and 6.1 billion dollars

Finally the cat is out of the bag and the numbers are on the table: the Oracle expert report on damages Google vehemently opposes arrived -- according to a Google filing that has now become available in an unredacted form -- at the conclusion that "Google, if found to infringe, would owe Oracle between 1.4 and 6.1 billion dollars."

The letter also reveals some other interesting data points, such as the terms on which Sun proposed a license deal to Google, which Google rejected: "$60 million over three years plus an additional amount of up to $25 million per year in revenue sharing."

Here's Google's unredacted filing:

Oracle Google Damages - June 6 Precis Unredacted

Google's letter complains about "an unprecedented fifty percent royalty rate" (on a certain base). Since a recent Oracle filing denies that claim, I hope that future filings by Oracle and/or Google will shed light on that particular question.

The now-disclosed $1.4-6.1 billion range validates the estimate at which I arrived earlier this week based on the incomplete information available at the time. I had painstakingly looked at the different components of the damages theory as described by Google and concluded that "[previous] filings added enough pieces to the puzzle to know for sure that this is -- in a worst-case scenario for Google -- about billions, not millions". I also said it was unclear at the time "whether it's billions even without a tripling based on willful infringement or only after that. Prior to tripling, the amount could be 'only' in the hundreds of millions."

Since we now know that the lower end of the range is -- according to Google -- $1.4 billion, it wasn't possible to rule out a number below $1 billion based on the incomplete set of data available at the time, but at any rate, a number in the billions of dollars in a worst-case scenario for Google.

In other words, if you read this blog or any of the reports based on it, or my Twitter feed, you got the information about the order of magnitude of Oracle's damages claims more than a day ahead of everyone else.

At this stage it's clear that Oracle wants all of the numbers and arguments -- except perhaps for the most sensitive information -- to be in the public record. It will be interesting to see Oracle's reply to Google's so-called Daubert motion (a request to throw out Oracle's damages report).

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