The most spectacular decision in the ongoing smartphone IP disputes has been handed down today by the United States Court of Appeals for the Federal Circuit: District Judge William Alsup has been overruled with respect to his erroneous determination that Oracle's Java API declaring code was not protected by copyright. Since the 2012 jury was hung with respect to "fair use", which means that neither party had prevailed on that defense, the case is now remanded to the United States District Court for the Northern District of California for a new trial on fair use and damages.
I disagreed with Judge Alsup on copyrightability all the way. I have been in favor of reasonable copyright protection for creative API-related material for more than ten years. Based on the official recording of the appellate hearing on December 4, 2013, I predicted this reversal of the non-copyrightability ruling and explained in another post why it was good news for software developers large and small. Reporters who attended the appellate hearing had also expected this outcome.
The Federal Circuit rejected Google's merely tactical cross-appeal relating to eight decompiled Java files (most of which were published by this blog before they showed up in any public court filing) and the nine-line "rangeCheck" routine.
Key holdings by the Federal Circuit:
The appeals court makes a clear distinction between the Java programming language (i.e., the commands/keywords that are free for everyone to use) and the APIs, and finds that only three of the Java APIs in question are basically part of the Java language, but "Google could have written its own API packages using the Java languages", which, as the opinion notes, "Google chose not to do".
"We are mindful that the application of copyright law in the computer context is often a difficult task. [...] On this record, however, we find that the district court failed to distinguish between the threshold question of what is copyrightable--which presents a low bar--and the scope of conduct that constitutes infringing activity. The court also erred by importing fair use principles, including interoperability concerns, into its copyrightability analysis."
"[W]e conclude that the declaring code and the structure, sequence, and organization of the 37 Java API packages are entitled to copyright protection."
This part is key for copyright law practitioners (I also mentioned this in my post-hearing commentary):
"Although the parties agree that Oracle's API packages meet the originality requirement under Section 102(a), they disagree as to the proper interpretation and application of Section 102(b). For its part, Google suggests that there is a two-step copyrightability analysis, wherein Section 102(a) grants copyright protection to original works, while Section 102(b) takes it away if the work has a functional component. To the contrary, however, Congress emphasized that Section 102(b) 'in no way enlarges or contracts the scope of copyright protection' and that its 'purpose is to restate . . . that the basic dichotomy between expression and idea remains unchanged.'"
This part is pretty damning for the district court:
"Oracle asserts that all of the trial court's conclusions regarding copyrightability are erroneous. Oracle argues that its Java API packages are entitled to protection under the Copyright Act because they are expressive and could have been written and organized in any number of ways to achieve the same functions. Specifically, Oracle argues that the district court erred when it: (1) concluded that each line of declaring code is uncopyrightable because the idea and expression have merged; (2) found the declaring code uncopyrightable because it employs short phrases; (3) found all aspects of the SSO devoid of protection as a 'method of operation' under 17 U.S.C. § 102(b); and (4) invoked Google's 'interoperability' concerns in the copyrightability analysis. For the reasons explained below, we agree with Oracle on each point."
Each point. Wow.
The Federal Circuit disagrees with the district court and Google (the district court had basically just adopted Google's fundamentally flawed non-copyrightability argument, which is why it just got overruled) on the point in time at which the theory of a "merger" (of idea and expression) has to be determined. Google argued that it had only one way to write those API declarations -- but that's because it chose to be similar to Java in certain (and not all) respects. But this way Google limited its own choice. It could have create completely new APIs for Android. The question in a copyright case is, however, not whether the copyist had choices. It's whether the creator of the copied material had options. And Sun's engineers (Java was developed by Sun, which was acquired by Oracle in 2010) had plenty of choices. The Java APIs were and are creative and original. And that's why they are protected. Otherwise something could be protected by copyright when it's written and then lose copyright protection later because someone choose to copy -- that would be absurd.
A very common misconception in the API copyrightability context is that many people think the short names used in declaring code (mostly method and variable names) render that code uncopyrightable. But it's not the short names per se that are covered by copyright. The Federal Circuit clarifies this:
"By analogy, the opening of Charles Dickens' A Tale of Two Cities is nothing but a string of short phrases. Yet no one could contend that this portion of Dickens' work is unworthy of copyright protection because it can be broken into those shorter constituent components. The question is not whether a short phrase or series of short phrases can be extracted from the work, but whether the manner in which they are used or strung together exhibits creativity."
To me this has always been clear. Any creative work can be broken up into small parts that are not copyrightable on their own. For example, a copyrightable composition consists of single notes, but no note on its own is copyrightable. This blog post here is copyrightable as a whole, and so are many smaller parts of it on their own, but that doesn't mean that every word or short phrase in it is covered by copyright.
It's very important that the Federal Circuit agreed with Oracle and disagreed with Google on the applicability of the Lotus v. Borland ruling on menu structures in the Ninth Circuit (the West Coast circuit). According to the appeals court, Lotus is at odds with Ninth Circuit law.
"If we were to accept the district court's suggestion that a computer program is uncopyrightable simply because it 'carr[ies] out pre-assigned functions,' no computer program is protectable. That result contradicts Congress's express intent to provide copyright protection to computer programs, as well as binding Ninth Circuit case law finding computer programs copyrightable, despite their utilitarian or functional purpose. Though the trial court did add the caveat that it 'does not hold that the structure, sequence and organization of all computer programs may be stolen,' [...], it is hard to see how its method of operation analysis could lead to any other conclusion."
This means the Federal Circuit agrees with former U.S. copyright chief Ralph Oman who warned in his amicus curiae brief that the district court ruling "eviscerates" copyright protection for computer software.
"Google's Interoperability Arguments are Irrelevant to Copyrightability"
That's the headline of the section in which the Federal Circuit holds that the district court made a mistake by applying the Sony and Sega cases (see my commentary on those cases from two years ago), which were fair use cases in the Ninth Circuit that involved interoperability considerations, to the question of copyrightability. If you read the post I just linked to and compare it to the Federal Circuit opinion, you'll see that the appeals court's view of those cases is very similar to mine. Here's my favorite quote from that part of the ruling:
"We disagree with Google's suggestion that Sony and Sega created an 'interoperability exception' to copyrightability."
"given the record evidence that Google designed Android so that it would not be compatible with the Java platform, or the JVM specifically, we find Google's interoperability argument confusing. [...] The compatibility Google sought to foster was not with Oracle's Java platform or with the JVM central to that platform. Instead, Google wanted to capitalize on the fact that software developers were already trained and experienced in using the Java API packages at issue."
A goodie for FRAND friends:
"Notably, even when a patented method or system becomes an acknowledged industry standard with acquiescence of the patent owner, any permissible use generally requires payment of a reasonable royalty, which Google refused to do here."
With respect to fair use, Oracle would have liked a "hole in one" here with the Federal Circuit reversing the non-copyrightability finding and resolving the "fair use" question as a matter of law. But the circuit judges found that "due respect for the limit of [their] appellate function requires that [they] remand the fair use question for a new trial". They do express sympathy for various of Oracle's arguments against Google's fair use defense, and they do indicate that Google stretched the meaning of fair use (for example, "Google overstates what activities can be deemed transformative under a correct application of the law"). But the Federal Circuit concluded that some factual questions remain to be resolved on remand. In particular, now that it has been clarified that interoperability is not relevant to the copyrightability analysis, it may still play a role in connection with fair use. But the Federal Circuit opinion suggests that interoperability may play a role for only a limited number of Java API packages. The retrial is going to be all about fair use, and it will be interesting, but Oracle is in reasonably good shape based on the Federal Circuit opinion, which will limit Google's arguments in the retrial.
The Federal Circuit rejects Google's and the district court's suggestion that Oracle was basically using copyright law instead of relying on patent protection. The Federal Circuit is the U.S. patent court -- it hears all U.S. patent appeals from district court decisions. And its opinion clearly supports that software can be protected by copyright law and patent law at the same time (with different aspects being protected by the different types of intellectual property rights, of course):
"Until either the Supreme Court or Congress tells us otherwise, we are bound to respect the Ninth Circuit's decision to afford software programs protection under the copyright laws. We thus decline any invitation to declare that protection of software programs should be the domain of patent law, and only patent law."
It's a given that Google, given the high stakes, will ask for an en banc rehearing. But since the panel was not divided at all, I doubt that a full-court review would lead to a different result. This appellate opinion is extremely convincing. Google can, of course, try to appeal this case to the Supreme Court. Maybe it will bring a petition for writ of certiorari. But such a petition should be denied because the Federal Circuit ruling is absolutely consistent with Supreme Court law. In any event it will take some more time before a mandate issues to the district court. And then there will be further proceedings, which I look forward to. Or there may not be further proceedings if Google recognizes that Oracle is now on the winning track, and finally takes the license it was already negotiating years ago. That would be the most reasonable outcome.
This reversal-in-part is a huge win for Oracle and its appellate counsel, a team of Orrick Herrington & Sutcliffe lawyers led by Joshua Rosenkranz and Mark Davies. Mr. Rosenkranz has previously been dubbed the "Defibrillator" for reviving lawsuits on appeal after losses in district court. He did it again. (He was also very successful on Apple's behalf in two Motorola cases, the "Posner appeal" and Apple's appeal of the ITC's dismissal of its complaint against Motorola.)
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