Judge in Oracle Case Balks at Disgorgement

     SAN FRANCISCO (CN) - Oracle's chances of a multi-million dollar payday in its infringement suit against Google vanished Monday morning after Judge William Alsup all but took disgorgement off the table for the damages phase.
     "There is no way that the law should allow a disgorgement theory in the billions or hundreds of millions of dollars," Alsup told the lawyers before jurors arrived for the morning session. Oracle had hoped to argue that Google's copyright infringement of 37 Java application programming interfaces (APIs) in its Android operating system resulted in a profit windfall for the company at the expense of Oracle's intellectual property. Oracle acquired Java when it bought Sun Microsystems in 2010.
     "We're [going to] do decompiled [codes] and rangeCheck and nothing else. We're not going to get into disgorgement for the API packages because no liability has been shown," Alsup said. The jury decided last week that Google infringed on 37 API packages, but failed to decide if the infringement constituted fair use. Without that key component to the verdict, the question of liability remains unresolved.
     However, Alsup was quick to point out that Oracle's team can mount whatever damages case it pleases -- even if he thinks it amounts to legal folly.
     "[Oracle attorney] Mr. Jacobs said I was cutting short his day in court, so he can put on the case if he wants," the judge said, referring to an exchange Friday when he first expressed skepticism about Oracle's plans to seek disgorgement.
     "But there is no way in my view the law could hold with disgorgement," Alsup added.
     Last week he told Oracle that the most it could expect is $150,000 in statutory damages, a far cry from the $1 billion the company expected when the lawsuit was filed in Aug. 2010. Jacobs rejected that figure, informing the court the company would ask the jury to punish Google by taking the profits it's earned from Android.
     Google repeatedly stressed during the trial that Android has yet to turn a profit, since it gives the technology away for free. And the company's executives feigned ignorance about how much Android generates in ad revenue.
     The future of the damages phase rests largely in Alsup's hands, at least on two points. He has yet to rule on Google's motion for a mistrial on the part of the copyright trial the jury was unable to decide. The issue of copyrightability of API code is his to decide too -- and his statements in court consistently indicate he's inclined to say the codes are not copyrightable.
     The judge asked both sides to weigh in on an EU high court ruling that functionality and programming language cannot be copyrighted in a case that mirrors the issues of the Oracle-Google case. Google lead attorney Robert Van Nest answered that the EU court's decision affirms Google's position.
     "While the ECJ was applying European law, the same principles apply here. Moreover, ECJ's conclusion was that the programming language cannot be protected by copyright law, because it is on the unprotectable idea side of the idea/expression dichotomy," Van Nest stated in his trial brief.
     "It necessarily follows that no copyright protection prevents others from adopting parts of the programming language. Similarly, copyright law cannot prevent Google from adopting parts of the 166 [Java] API packages," Van Nest concluded. He pointed out in a footnote that the European Committee for Interoperable Systems-of which Oracle is a member-lauded the EU high court decision.
     Oracle reads the same EU ruling differently.
     "Although [the case] was decided under different law and involved very different facts (including no finding that the defendant had copied the structural design of the code and no issue about APIs), the Court of Justice of the European Union decision supports a finding that Google's copying of the structure, sequence and organization set forth in Oracle's API documentation constitutes infringement," Jacobs wrote for Oracle.
     So far, Judge Alsup has given no indication when he intends to rule on the copyrightability of the APIs. But time is running out, since closing arguments in the patent infringement phase are set for Tuesday morning. The case is expected to be in the jury's hands later that day. The damages portion of the trial-unless rendered unnecessary by jury verdict, Alsup's ruling, an Oracle-Google settlement or a combination of all three-follows a phase II verdict.
     The trial, already in its fifth week, could last well into June.