Google’s use of APIs were described at trial using the metaphor that Google copied the filing cabinet, but not the files inside

In a recent decision, the Federal Circuit [1] has changed the way software developers understand copyright protections. Software development contains a lot of legal issues that need to be considered. [2] Software can be a functional tool, and it is possible to get a patent on software, if it provides and improvement to the functioning of a computer.[3] But the specific organization and words used by the programmer are more than just functional. For that reason, software can also be protected by copyright. Oracle America, Inc v. Google (Fed. Cir. 2018) looks closely at the line between the function of software, and its creative expression.

The Case

This is the second time the case is before the Federal Circuit. In 2014, the Federal Circuit reversed the lower court’s decision that the API packages were not copyrightable as a matter of law. The Federal Circuit found the “Structure, sequence, and organization of the Java API packages” were copyrightable. The case was remanded for further proceedings on Google’s defense that the its own implementation of the APIs was covered by fair use.

In the second jury trial, Google won based on a fair use defense. However, in March of this year, the Federal Circuit reversed the trial court again and ruled that Google’s use of Oracle’s copyrighted Java APIs were “not fair as a matter of law.”[4]

The Decision

The Federal Circuit analyzed the four-factor test established by the copyright statute to determine that Google could not prevail on a fair use defense.

Purpose and Character of the work

The district court found the work was transformative, meaning it superseded the purpose of the original. Google only integrated selected elements and added its own implementing code. However, the Federal Circuit found the purpose and character of the work weighed against Google’s fair use defense. The Federal Circuit rejected the argument that Google’s implementation was a noncommercial use because the Android Operating System is open source. In addition, the court found that Google’s implementation cannot be transformative if the whole purpose was “benefit of developers” who were familiar with the Java APIs. [5]

Nature of copyrighted work

The district court found that the underlying APIs were “not highly creative” and “functional considerations predominated in their design.” [6] The Federal Circuit agreed, that based on the factual findings, that the functional nature of the copyrighted work supported Google’s defense of fair use. The Federal Circuit agreed, that the functional nature of APIs weighted in favor of finding fair use. [7]

Amount and substantiality

The district court found “Google copied only so much as was reasonably necessary for a transformative use”. [8] The Federal Circuit was not fully convinced, because the amount is not strictly measured by the actual percentage of the work copied. The Federal Court found Google had copied more than a “qualitatively insignificant” portion of the work. [9]

Effect of the use on the potential market

The district court found the copyrighted works were for “desktop and laptop computers” where Google implemented the APIs for mobile devices. [10] However, the Federal Circuit emphasized that Oracle could have licensed its API to other companies who planned to use it for mobile devices. [11] The court emphasized that, although no factor could be viewed in isolation, the Supreme Court has indicated the fourth factor is “undoubtedly the single most important element of fair use,” and that it “weighs heavily in favor of Oracle.” [12]

The Federal Circuit ultimately ruled against Google’s fair use defense. This decision surprised many organizations, including the Electronic Frontier Foundation. EFF argues that APIs should not be copyrightable, [13] or at a minimum should be covered by the fair use defense. [14]

What it Means for Startups

Startups that are developing new code should carefully review any licenses associated with any APIs that are incorporated into the module. Although the court does not conclude that “a fair use defense could never be sustained in an action involving the copying of computer code,” the decision should caution developers, especially those planning to use their code in a commercial enterprise. Pay special attention for licenses that are free to use, but not able to be used in commercial work. Some examples include the GNU General Public License[15]  and MIT license. [16]

Even if a startup changes the substantive content of how an operation is performed in their code, but the “structure, sequence, and organization” of the new API mimics an existing, copyrighted API, they may still be found to infringe. Startups should make sure to obtain permission to avoid copyright infringement.

 

[1] The Federal Circuit is a court of appeals in the federal court system.

[2] http://www.wolverine-startuplaw.com/2018/03/13/legal-issues-to-consider-in-drafting-software-development-agreements/

[3] https://www.uspto.gov/web/offices/pac/mpep/s2106.html#ch2100_d29a1b_13c69_10

[4] Oracle America, Inc. v. Google LLC, 886 F.3d 1179,1186 (Fed. Cir. 2018)

[5] Id. at 1200.

[6] Id. at 1204.

[7] Id. at 1205.

[8] Id. at 1189.

[9] Id. at 1207.

[10] Id. at 1208.

[11] Id. at 1209.

[12] Id. at 1207,1210.

[13] https://www.eff.org/deeplinks/2014/05/dangerous-ruling-oracle-v-google-federal-circuit-reverses-sensible-lower-court.

[14] https://www.eff.org/deeplinks/2018/03/federal-circuit-continues-screw-copyright-law-and-thwart-innovation.

[15] https://www.gnu.org/licenses/gpl-3.0.en.html.

[16] https://opensource.org/licenses/MIT