New Oracle-Google Copyright Trial Kicks Off

     SAN FRANCISCO (CN) — In the opening salvo of a second copyright trial over Google’s Android smartphone, Oracle accused Google of taking short cuts to rush Android to the market and of using “creepy” tactics to maximize ad revenue.
     Google, in turn, painted Oracle as a bitter rival that “failed to innovate” and didn’t start asserting copyright claims until the company was left in the dust of the smartphone revolution.
     Both sides presented opening arguments to a 10-member jury and questioned Google’s former CEO on the first day of a second trial to determine if Google’s use of Oracle’s copyrighted Java application program interfaces, or APIs, was “fair use.”
     Oracle attorney Peter Bicks urged the jury to reject Google’s “excuses” for what he said was unacceptable business behavior
     “I call this case the fair-use excuse,” Bicks said. “Google is using the fair-use exception and twisting it to excuse its bad conduct.”
     Google attorney Robert Van Nest countered that Android’s success did not hinge on the 37 Java APIs in the Android code. Those APIs represent a tiny fraction of years of hard work and more than $100 million in investments Google made to create a system that powers hundreds of millions of smartphones, he said.
     “The right of fair use permits the use of copyrighted work without the owner’s permission when it builds on something,” Van Nest said. “Google engineers used a tiny portion of Java SE5 to create something entirely new.”
     Van Nest argued the 37 APIs make up only one-tenth of 1 percent of the entire Android system code.
     But Bicks pointed to internal documents showing the pressure Google faced to get its new smartphone on the market after it acquired Android in 2005. Google could not have accomplished the feat without using Oracle’s copyrighted declaring code, he argued.
     “While everybody else took a license, Google took a shortcut,” Bicks said. “Google broke a basic rule. You can’t take people’s property without permission.”
     Bicks cited several exceptions to the law that allow one to use a copyrighted work without the owner’s permission. Those exceptions include criticism, commentary, news reporting, classroom use, scholarship and research. The Oracle attorney argued none of those exceptions apply to Google’s use of the Java code in Android.
     Bicks also showed a painting splattered with Java programming code, telling the jury it represented an example of a truly “transformative use” of a piece of copyrighted material.
     Van Nest told the jury that although Google had negotiated a potential license agreement to use Java with Sun, the company Oracle acquired in 2010, negotiations broke down because Sun wanted too much control.
     Google planned to license its Android system for free to expand the mobile operating system’s reach and make its money through applications and ad revenue.
     Because those talks broke down, Google engineers had to innovate other crucial components of the 37 Java APIs, including the implementing code and virtual machine. That’s why it took three years to build the Android operating system, Van Nest said.
     “These talks broke down in ’06, and it took another year and a half to build,” Van Nest said. “Oracle wants credit for all that, but it was built by Google.”
     The Google attorney further argued that Oracle cannot blame Google for its failure to innovate its own smartphone operating system.
     “Android didn’t harm Java,” Van Nest said. “Sun and Oracle harmed Java by failing to keep up with the modern needs of consumers. Android’s a new use for Java that Sun and Oracle weren’t able to accomplish.”
     Today, Google brings in $42 billion in annual revenue and $21 billion in profits through Android, according to evidence Bicks cited in his opening statement.
     If the jury finds Google’s use of the APIs was not fair use, a second phase of the trial will begin to assess damages against Google — which could result in a multibillion dollar award for Oracle.
     
     Google CEO Takes the Stand
     The first witness to take the stand in the second copyright trial was former Google CEO Eric Schmidt, who now serves as chairman of the board of Google’s parent company Alphabet.
     Schmidt served as Google CEO from 2001 until 2011 and throughout the development of the Android mobile operating system from 2005 to 2008.
     The former CEO said based on business advice he received at the time and his 40 years of experience in the business, he believed Google could use the Java APIs without a license from Sun when it launched Android in 2008.
     Conversations he had with former Sun CEO Jonathan Schwartz and a blog post by Schwartz praising Google’s new Java-based smartphone system in 2008 also gave Schmidt the impression “that our approach was appropriate and permitted,” he said.
     On cross-examination, Bicks questioned the Alphabet board chairman about Google’s own policies regarding their APIs.
     The Oracle attorney cited Google annual reports in which the company identified “unauthorized use” of its intellectual property as something that could “make it more expensive to do business and harm our operating results.”
     Bicks pointed out how Google’s decision to license the Android operating system for free virtually eliminated Oracle from the mobile marketplace by making Java a less attractive option given Google’s free alternative.
     Google could offer the system for free because it makes its money from the ad revenue, Bicks said.
     Tuesday ended with Bicks citing Schmidt’s comments during an appearance on the CNBC show “Mad Money” with Jim Cramer.
     In that interview, the former CEO said Google stood to make a lot more money in the mobile device market because it could collect more targeted information about mobile device users.
     “You said, ‘We know where you are. We know what you’re doing, and we know what you’re thinking,'” Bicks said, quoting Schmidt’s comments in the interview.
     Bicks continued to quote Schmidt, illustrating the point that Google used Oracle’s copyrighted work to advance its goal of spying on mobile device users to generate profits through targeted advertising.
     “‘That’s what I call the creepy line, and the Google policy is to get right up to the creepy line and not cross it,'” Bicks said, again quoting Schmidt’s comments from the interview.

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