Thursday, May 10, 2012

Oracle wants to preserve the jury's infringement finding and limit retrial to 'fair use'

In response to Google's motion for a new trial on both copyright infringement and "fair use", Oracle just filed a brief according to which a retrial should be limited to the one issue the jury couldn't unanimously decide, which is "fair use".

Google knows that the sweeping infringement finding rendered by the jury on Monday concerning 37 APIs, 400 classes, thousands of methods is a major win for Oracle. There are things Oracle hasn't won yet. It has to prevail on copyrightability. It has to defeat Google's "fair use" defense at some point, but the first jury trial was not a now-or-never, once-in-a-lifetime opportunity for Oracle to achieve this. Judge Alsup's refusal to rule on this as a matter of law (without asking a jury) also doesn't mean that Google has succeeded with its "fair use" defense. It just means that Oracle either has to convince another jury or an appeals court. Theoretically, it would also be possible for Oracle and Google to agree that the issue should be adjudicated by the judge, and then he'd have to decide for or against "fair use" -- as opposed to simply deciding against making any decision at all. Furthermore, Judge Alsup's denial of JMOL can be appealed.

Based on where things now, Oracle has won something -- API infringement -- and needs to prevail on other issues, but it still has the chance to win everything else, even before the district court (prior to any appeal). There's nothing on the jury verdict form that Oracle must do away with, but Google can't let the infringement finding stand without a fight. If the infringement issue isn't retried (and Oracle's brief argues that it would actually be a violation of Oracle's Seventh Amendment rights to retry that one despite a unanimous verdict), the factual finding of infringement stands. And a factual finding of infringement is not counterbalanced by the mere absence of a factual finding on "fair use". Just like Oracle must at some point prevail on "fair use" by defeating it, Google must at some also prevail on getting it decided in its favor -- provided that the structure, sequence and organization of the asserted APIs are held copyrightable, of course.

Against this background, it's clear that Oracle's opposition is strictly limited to Google's proposal that Questions 1A and 1B form part of one indivisible whole that must be retried in its entirety. Oracle believes it's entitled to a JMOL on "fair use", and maybe an appeals court would agree at some point, should this case get there. But at the end of the day, if a retrial on "fair use" is ordered and Oracle wins, it will be just fine. It just wants to keep what it has already won: the API infringement verdict.

Oracle's brief criticizes Google's motion for failing to address two landmark appellate decision on the question of how a district court should deal with a jury's failure to reach unanimity on a given question on a special verdict form. Oracle says that it mentioned those two cases to the court as early as Friday, May 4, 2012 -- on that day, the jury indicates for the first time that it was deadlocked on one question. According to Oracle's brief, Google's motion should have addressed those two decisions but instead cited other cases that related to general, not special, verdict forms.

Oracle's two key authorities in support of a retrial limited to only the question the first jury didn't unanimously decide are the following ones:

  1. the Ninth Circuit's 2008 decision on California v. Altus Finance S.A.

  2. the Federal Circuit's 1995 decision on Baxter Healthcare Corp. v. Spectramed, Inc.

An appeal of this case would go to the Federal Circuit, which would apply Ninth Circuit law with respect to questions such as this one. That's why the combination of one Ninth Circuit and one Federal Circuit decision is quite powerful. I'm sure Google will have to explain to Judge Alsup why the cases Google cited trump the authorities cited by Oracle. Google can and will disagree that those cases apply, but it will have to explain why.

I will take a closer look at those cases in the days ahead. My initial understanding is that those decisions indeed support the idea that it's in the interests of justice and efficiency to limit the scope of a retrial to only the unanswered question(s).

Oracle's brief also tackles Google's claim of "indivisibility". There may be various facts that the first jury had to learn about and that the second jury will also have to be told, but the question is how much of a factual overlap really suggests that, basically speaking, a decision on "fair use" could be inconsistent with what led to the finding of infringement. Oracle says that Google only claims an overlap with respect to the third "fair use" factor (quantity and quality of the work taken) and exaggerates it. That overlap still doesn't justify retrying the infringement question in Oracle's view.

The aforementioned Baxter decision is, as far as I can see, a good example of a case in which a retrial was limited to only an unanswered question, despite a far more significant overlap than the one Google alleges between Questions 1A and 1B in the Android/Java case. Baxter was a patent case, and the Federal Circuit said that the infringement finding should survive even though validity had to be retried. As a frequent guest at patent trials and voracious reader of filings made in patent disputes I know that there are significant overlaps, and often even interdependencies, between infringement and validity. All the time I hear defendants claim (and quite often I agree) that if a patent is construed in a certain way for purposes of the infringement analysis, the same interpretation would render it invalid over some prior art. Still, those questions don't have to be retried if only one of them remained unanswered at the end of the first trial.

So far, Judge Alsup appeared inclined to get as much out of the first jury trial as possible. He said something like he wouldn't let the court go to waste. If Google can overcome the Altus and Baxter authorities, Judge Alsup will probably also be fine, but that may be a steep challenge based on my initial reading of those decisions.

On a separate note, there have been other filings in this case today, addressing a variety of issues including (among other things) copyrightability and damages. I will take a closer look at the copyrightability argument and probably blog about copyrightability again this coming weekend -- and with Oracle today having rested the patent part of its case (meaning that it concluded the proactive part, its "case-in-chief", I will also do a report on the patent phase as well.

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