In a recent 6-2 decision, the U.S. Supreme Court held that Google LLC’s use of certain lines of code from Oracle America Inc.’s Java API to create its Android operating system qualified as “fair use” under the Copyright Act and thus was not copyright infringement even though Google did not have a license or permission to use the Java software. Google LLC v. Oracle Am., Inc., 141 S. Ct. 1163 (2021).
The decision brings to conclusion a $9 billion suit between Google and Oracle that has been ongoing for over a decade. More importantly, the Court’s findings on APIs and its reasoning behind its fair use analysis will likely have significant impact on computer code and software copyrights and subsequent decisions on infringement.
An application programming interface, or API, is a set of definitions and protocols for building and integrating application software which allows applications to communicate across different systems or platforms to complete tasks. APIs serve an important function in software interoperability and innovation because, as noted by the Court, APIs “allow programmers to build certain functions into their own programs, rather than write their own code to perform those functions from scratch.” Id. at *12.
Critical to the Court’s analysis in this case, is understanding that for each API there is an “implementing code” and a “declaring code.” The “implementing code” is what tells the computer how to execute a particular task. The “declaring code” then provides the name and location of each task within the API so that the implementing code can be linked to the task and executed. The declaring code thus functions both as a shortcut and organizational system which, once learned, can be easily applied by programmers in creating software.
In 2005 Google acquired Android and began working on developing its operating system for mobile devices. As part of this process, Google explored potential licensing options with Sun Microsystems (the original owner and developer of Java) for Google to license Java and incorporate it into the Android system. The licensing negotiations ultimately proved unsuccessful, and Google moved forward with creating its own version of Java to run its operating system. The new program recreated the functionality of Java and incorporated about 11,500 lines of code from Java’s APIs so that programmers would not have to learn a new system in order to interface with Google’s software. Google thus created its own implementing code but copied Java’s declaring code.
Fast forward a couple of years, and the releases of various versions of each company’s software, and Oracle enters the scene with its purchase of Sun in 2010. Oracle then filed suit against Google alleging that Google’s unlicensed use of the Java API in developing its Android software for mobile devices infringed Oracle’s copyrights for Java.
Copyrights protect original works of authorship that have been fixed in a tangible medium of expression which possess “at least a modicum” of creativity. Typically, when people think of copyrights they think of books, songs, or artwork-- but software can also be a creative work and thus eligible for copyright protection. Thus, unauthorized or unlicensed use of copyrighted software can be grounds for legal action, including claims for copyright infringement under the Copyright Act.
However, copyrights do not protect functional or utilitarian works such as ideas, procedures, processes, systems, method of operations, concepts, principles, and discovery.
Notably in reaching its decision, the Court chose not to definitively reach a decision as to whether an API was copyrightable and instead focused on whether Google’s use of the API constituted fair use, thus technically leaving the question of whether APIs in general are copyrightable open for debate. Future decisions on whether APIs are copyrightable though will likely be strongly influenced by the Court’s dicta which heavily implied that at least the declaring code of APIs is not eligible for copyright protection or if it is, the available protection is “thin.” As part of its fair use analysis, the Court stressed that declaring code is “inherently bound together with uncopyrightable ideas” and new creative expression in the form of implementing code. Id. at *42. This along with other differences between declaring code and most computer programs led the Court to find that “the declaring code is, if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright.” Id. at *43.
Fair Use Exception
Under the Copyright Act, “fair use” is a statutorily protected defense to copyright infringement which permits the unlicensed or unauthorized use of copyrighted works in certain, limited circumstances where the purpose of the original work is “transformed” into something new. The intent behind this defense is to allow courts to balance a creator’s ownership interest and rights to their work with the competing interests of the public and other creators in freedom of expression and creativity. Common examples of fair use include criticism, commentary, news reporting, teaching, scholarship, and research. These works are “transformative” because they create something new and “fulfills the objective of copyright law to stimulate creativity for public illumination.”
In making a fair use determination, courts weigh several factors on a sliding scale that balances the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work.
The Court found that each of these factors supported a finding of fair use in favor of Google because Google took only a portion of the functional declaring code from the Java API that was necessary to allow developers to work in and create its new mobile smartphone program. “Google copied those lines not because of their creativity, their beauty, or even (in a sense) because of their purpose. It copied them because programmers had already learned to work with the Sun Java API’s system, and it would have been difficult, perhaps prohibitively so, to attract programmers to build its Android smartphone system without them.” Id. at *50-51. Google’s copying of the declaring code of the Java API thus was held to have a valid and transformative purpose that did not infringe upon Oracle’s copyrights.
In addition to putting to rest a decade long litigation and giving Google a decisive victory, the Court’s decision and fair use analysis also has far reaching impact for programmers and consumers alike. Although the full effect is still to be determined outside of the narrow scope of the Court’s decision, the Court’s ruling will likely serve to aid software innovation and interoperability efforts but limit the available protections for API creators attempting to license their work. At minimum, programmers and consumers will be able to rely on the ruling to defend their use of pre-existing API declaring code in creating new software.
Effective July 1, 2021, Florida will require collection and payment of sales taxes by remote online businesses that sell over $100,000 in goods delivered to the state.
Previously, Florida only taxed online businesses if the seller had a physical presence in Florida. Now Florida sales taxes include "Marketplace Providers" or marketplace sellers who make over $100,000 in remote sales of personal property delivered to the state in the previous calendar year.
It is estimated Florida will collect $1 billion from the tax annually, which is be used to replenish the state’s unemployment trust fund after which the revenue will be used to reduce the commercial lease tax.
Florida is the only state to impose a state sales tax on commercial rent of real property including land, buildings, office or retail space, convention centers or meeting rooms, docks, and parking. The new tax law will reduce the state sales tax on commercial leases from 5.5% to 2% after the unemployment trust fund is built back.
Online retailers are encouraged to review their current tax system to ensure compliance with the new Florida sales tax including registering with the Florida Department of Revenue. All tax, penalty, and interest due on remote sales before July 1, 2021 will be waived if retailers register before October 1, 2021.