Friday, March 23, 2012

Oracle and Google ordered to hold settlement conference (no later than April 9, 2012)

Now that Oracle and Google have a firm trial date (the trial will start on April 16, 2012), the court decided that another attempt to settle the dispute, which started with Oracle's lawsuit in August 2010, should be made. Magistrate Judge Paul S. Grewal, who presided over the parties' court-ordered mediation (i.e., settlement) talks last fall, just ordered the parties to "appear for a further settlement conference", with participants including "at least Ms. Katz [sic] and Mr. Rubin". There's a typo: Safra Catz' last names begins with a C, not a K. She's Oracle's Co-President and CFO. Andy Rubin is Google's Android chief.

The parties' lawyers are told to propose "available dates so that the conference will take place no later than April 9, 2012", with March 30 being a blackout date for the judge. The order urges them to "demonstrate maximum flexibility in tendering dates".

I'm not sure that this imposition by the court is helpful. With a firm trial date approaching fast and the case having been narrowed substantially (with relatively little left on the patent side, it's now almost exclusively a copyright case), there's a better chance than ever before that the parties may settle -- but if there's a common ground they can agree upon, I believe they will do so even without the court requiring them to show up, and if their positions are still irreconcilable, the compulsory meeting won't yield any result.

A partial settlement would also be conceivable: they might agree on how to settle whatever little is left of the patent part of the case but still duke it out on copyright.

Even though Oracle's patent infringement claims and its damages claims have been contracted over time, the copyright part of the case still has the potential to give Oracle huge leverage over Google. With an injunction against Android, Oracle would have so much leverage that no one would be talking about damages theories anymore: Google would need a license, and Oracle's demands, monetary and otherwise ("bring Android back into the Java fold"), would not in any way be limited by whatever the court considered acceptable damages claims or whatever the court-appointed damages expert, Dr. James Kearl, may have calculated. In that case, the parties would negotiate freely, with all the pressure being on Google.

If Oracle is determined to take its chances with the copyright infringement claims (which are a fairly simple infringement case except for the question of whether the asserted API-related material is copyrightable), then it won't settle. In that case it will let a jury take a look at hundreds of pages of code that Google claims isn't protected by copyright, and it can always appeal -- and possibly assert additional patents in a second lawsuit, if it has more Java-related patents that it can claim to be infringed by Android.

Alternatively, if Oracle prefers a face-saving exit, it can try to leverage in settlement talks the fact that the copyright part still poses considerable risk to Google.

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