Google LLC v. Oracle America Inc.

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.

APIs

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

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.

Impact

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.  

Florida Sales Tax Update

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.

Florida's COVID-19 Liability Shield Law

On March 29, 2021, Florida passed a new law which protects individuals, businesses, educational institutions, government entities, and religious institutions which have made good faith efforts to follow COVID-19 guidelines against COVID-19-related injury and death lawsuits.

Persons who file suit will need to provide a physician’s affidavit of merit which links their injury to the businesses’ acts or omissions with a “reasonable degree of medical certainty” and also prove that the business did not make a good faith effort to comply with established guidelines. Even if plaintiffs are able to meet these requirements, businesses will still be shielded from liability absent a showing of gross negligence which must be shown by clear and convincing evidence in order to prevail.

The new law also contains separate protections for health care providers requiring plaintiffs to prove that the provider was grossly negligent or engaged in intentional misconduct by the greater weight of the evidence. Providers will be able to raise an affirmative defense to such claims if they complied with government-issued health standards specifically related COVID-19.

Notably the law only shields entities from liability for personal injury claims related to COVID-19. It does not shield entities from other claims that may be related to COVID-19 such as allegations of wrongful termination, discrimination, or violation of the Americans with Disabilities Act.

Covered entities should take steps to document their specific and actual compliance with federal, state, and local COVID-19 prevention guidelines in anticipation of challenges to same.

The law applies retroactively for all claims filed after March 29, 2021 and imposes a one-year statute of limitations.

Open Source Licensing

In the U.S., copyright owners have exclusive rights to their works including the right to use, copy, modify, and distribute the copyrighted work. The Copyright Act extends these rights and protections to software source code and software creators may choose to then license their rights to users of the software. In choosing to license their software, creators retain their rights in the work but grant permission to others to use the work under certain terms and conditions.

Under traditional proprietary licenses, software creators can limit how others use their copyrighted software by means of end user license agreements that prohibit copying, modifying, or redistributing the software. The copyright to the software is further protected by only providing the user with the object code for the software which cannot be easily read or modified.

Alternatively, software owners can choose to make the source code available to users and allow them to freely use, copy, modify, and redistribute the software under open-source licenses. An open-source license thus gives the user both the ability and legal right to modify the software. However, software provided under an open-source license is still subject to copyright protection and failure to comply with the license terms can be grounds for legal claims of copyright infringement as well as breach of contract.

There are hundreds of open-source licenses and variants which generally fall under two broad categories: restrictive or permissive. Under both types of licenses, users are allowed to use, modify, and redistribute software but the licenses differ in how subsequent modifications, derivatives, or new programs are licensed. Under a restrictive license, also known as copyleft or reciprocal license, the derivative work must be licensed under the same open-source license as the original software meaning it must be offered to others to use, modify, and redistribute under the same terms. Conversely a permissive license allows derivative works to be licensed under a proprietary license.

Some of the most popular open-source licenses include:

MIT License https://opensource.org/licenses/MIT

  • Permissive
  • License to use, copy, modify, and distribute software
  • May distribute under different licenses and without source code
  • Must include copyright notice and license agreement

GNU General Public License (GPL) v3.0 https://www.gnu.org/licenses/gpl-3.0.html

  • Restrictive
  • License to use, copy, modify, and distribute software
  • Commercial, private, and patent use
  • Must disclose source and include license and copyright notice
  • Must make complete source code of licensed works and modifications available
  • Must distribute under same open-source license

Apache License v.2.0 https://www.apache.org/licenses/LICENSE-2.0

  • Permissive
  • License to use, copy, modify, and distribute software
  • Commercial, private, and patent use
  • May distribute under different licenses and without source code
  • Must include license and copyright notice

Creative Commons (CC) 3.0 https://creativecommons.org/licenses/by-nc/3.0/legalcode

  • Restrictive
  • Must attribute author as creator
  • Non-commercial use
  • License to copy and distribute
  • No derivatives

Patents Outside the United States

A United States patent is only valid within the United States and will not neccesarily allow you to sue infringers in another country. Most countries have their own patent system, and if you plan on operating internationally you need to consider international protection. While there are many different patent systems, the requirements are generally the same: your invention must be new, useful, and non-obvious. Some jurisdictions may even require you to seek patent protection prior to publicly disclosing an invention- which differs from United States law, wherein you have a period of time from public disclosure to apply.

One of the easiest ways to begin pursing international patent protection is through a Patent Cooperation Treaty (PCT) filing. The PCT allows you to file an international application with the World Intellectual Property Organization (WIPO). From WIPO, your application can be submitted to any of the member nations, which includes most major countries around the globe. This process is referred to as entering the national stage, and once you enter the national stage you must follow that nation’s requirements to obtain a national patent.

Unfortunately, the PCT application does not lead to an “international patent.” However, the PCT application serves as a global provisional application, and you have over two years from filing the PCT application to enter the national stage in as many countries as you wish to obtain protection in. A PCT application is often more efficient than trying to coordinate filing in multiple countries.

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