The Smartphone Wars: Oracle lawsuit’s final fizzle

OK, this is just weird. “Oracle agrees to ‘zero’ damages in Google lawsuit, eyes appeal” That vast lawsuit that, according to some idiots (including a few of my commenters), was going to destroy Android and sow the earth with salt in its wake? It’s done – but in a bizarre way that makes me question the sanity of Oracle’s lawyers at Boies Schiller.

My regulars will recall that I’ve been saying this lawsuit was doomed since day one, a bad joke. Nor was I just handwaving; happens I’m intimately familiar with the case law in this area, because I’ve been involved in a lawsuit with a similar fact pattern. I expected it to end with a whimper, but…Oracle stipulating to zero damages so they can get on with the appeal?

Ow. My head hurts. What are they thinking they can win on appeal once they’ve conceded that the value of Google’s putative infringement was zero? I suppose it’s possible that they’re trying for an appellate ruling that their APIs are indeed copyrightable so they can use it as a competitive weapon against someone else other than Google, but that’s an extremely unlikely outcome. Alsup’s finding is as near bulletproof as they get – well reasoned, well written, and a very conservative extension of the Altai ruling.

I can’t make any sense of what Oracle is doing. My wife the attorney can’t make any sense of it. And Judge Alsup apparently can’t either – when both parties agreed to an assessment of zero damages, he asked “Is there a catch I need to be aware of?”

I dunno, maybe Boies Schiller is huffing the same glue they were during the SCO lawsuit. It’s either that or they’ve got video of the appellate judge buggering a goat. You choose.

50 thoughts on “The Smartphone Wars: Oracle lawsuit’s final fizzle

  1. To this not-a-lawyer, it seems to me that Oracle is conceding *only* that the value of the sole claim that stands is zero, and that they’re hoping that an appeal will overturn either the patent exclusions or the API copyright ruling – and that, should the happen, they’ll go back to the trial court and say “see, you were wrong these are infringed, and we get damages on that”.

    I’m guessing they think they can get the API copyrightability overturned.

  2. If I understand the article correctly, there are two copyright allegations: one involving 9 lines of code and one involving the Java API. The first was found infringing, but claims of actual damage were laughed off. The second was ruled uncopyrightable as a matter of law. Oracle seems to be ignoring the potential for a token victory on the first to improve their chances of overturning the second on appeal.

    Why are they doing this? Maybe they can’t scale down their legal team, so going for those damages would be a money-losing act after legal fees. Or maybe they don’t want to antagonize the court clerk any more.

    This is not legal advice, nor is it the opinion of anyone besides myself.

  3. Idunno… The appellate judge buggering a _kid_, perhaps; buggering a consenting adult goat may well be legal in some judges’ jurisdictions.

  4. I suspect this is a conflict of economic and political considerations within Oracle; from an economics standpoint, sunk costs are irrelevant when evaluating opportunity costs. From a political standpoint, sunk costs are a critical issue, particularly when people need to cover their asses.

    Oracle invested a very large amount of resources in this lawsuit. Abandoning it now would mean potentially unpleasant concequences to the authors of this strategy due to displeased shareholders. Perhaps they’re hoping for an opportunity to spin an appearance of victory out of this debacle.

  5. I thought of one other reason they might be doing this:

    They might be smart enough to understand that they’re burning reputation with this suit, and they didn’t have a ton to start with. Win or lose, they want it over so the memory can start fading.

    Because if IT purchasing directors start saying “Oracle is a lawsuit company, not a product company” then they’re truly fucked.

  6. It all comes down to the same thing in the end:

    Suing your customers (or their customers) is bad business.

  7. I was surprised to see that stipulation as well. Oracle had filed motions to go for “actual damages” and “infringer’s profits” because they hoped they could get more that way than through statutory damages (the judge basically laughed at the motions).

    I think that either (1) Oracle decided that those motions were doomed, and stipulate to $0 damages to save face, or (2) Oracle realized that arguing over actual damages/infringers profits was going to take a long time and a lot of effort for very little money and they’d rather just go for the appeal of the potentially more lucrative parts of the lawsuit.

    I don’t think they’ll make any money on the appeal, but I think that’s the logic they’re following.

  8. IIRC, the stipulation was from earlier. The stipulation was to let the judge decide the copyright liability so that the jury could focus on patents.

    Part of the reason for this was that the judge hadn’t yet decided on the legal aspects of API copyrightability, and that would have a bearing on the damages.

    So, it’s probably technically correct, but still not quite right, to say that Oracle stipulated to zero damages — they stipulated to letting the judge decide the damages.

  9. Actually, thinking about it, they probably did stipulate to zero today.

    Because they had previously stipulated to Judge Alsup deciding the damages, and they heard plenty from him on his opinion on the damages during the trial. They probably knew he was going to give them the minimum $200. That would have been even uglier, right?

  10. I think Daniel has it mostly right. They want APIs to be copyrightable. Even beyond suing others over Android, that would be an… Interesting precedent for a company like Oracle.

    I also think that some combination of B/S and Ellison’s egos are involved, and with the kind of money involved with these players, respectively, reputation (damaged by SCO) and defending ego are some of the few games left to play.

  11. Well, Patrick, today’s stipulation *is* a modification of the previous stipulation (“WHEREAS, the parties previously entered into a stipulation, approved by the Court … WHEREAS, Section 3.C of the prior stipulation provides that the Court will set an amount of statutory damages for Google’s infringement in connection with the Copied Materials … and
    WHEREAS, the parties wish to modify the prior stipulation in certain respects to facilitate
    entry of a final, appealable judgment in this action; NOW THEREFORE THE PARTIES HEREBY STIPULATE AND AGREE as follows …”).

  12. Being able to shake people down with Java was a significant part of its value; Oracle’s not going to give it up easily, because having your “product” licensed on every device everywhere is worth enough that even longshots like this are still worth it.

  13. Yeah, Max.

    I think the thing Oracle didn’t want was a well-reasoned dissertation from the judge about how he was giving them $0 (if they opted for actual damages) or $200 (if they opted for statutory damages). This stipulation short-circuits, not only the time to appeal, but also another scathing ruling that can’t possibly do them any good.

  14. Well, it’s obvious. As a hedge, Google should buy Novell now.

    (I’m not sure how immunized various companies are from potential Unix API copyright claims, but if Orcale manages to open the can of copyrightable API worms, the Unix API is the big kahuna, no? Even in phones; iOS and Mac OS X both use Darwin, which implements POSIX, which is clearly derivative of the Unix API . . .)

  15. Boies Schiller is living down to my opinion of their competence, actually.

  16. >Boies Schiller is living down to my opinion of their competence, actually

    Mine, too. They’re not just the gang that couldn’t shoot straight, they can’t seem to figure out how to hold the pistol without blowing their own fool heads off. And David look-at-me-I’m-a-rock-star Boies is the most hapless loser in the bunch.

  17. From the newspicks comment thread on groklaw about this topic… No Windows Phone 8 upgrade for current devices.

    Obviously MS were so wierded out that people actually bought WM7 phones last quarter that they just had to put the boot in a few more times to make sure they lose what little growth they were getting.

  18. They’re not just the gang that couldn’t shoot straight [...]

    Yeah. It will be interesting to watch reported hourly rates after this is done.

  19. @Steven Ehrbar: Buying Novell would be a bad move for Google. And it still has yet to be established whether or not Unix copyrights are even valid: remember that in USL v BSDi the judge came about *this close* to telling AT&T that their copyrights were invalid. This was not addressed at all in SCO v. IBM mostly because it was immaterial.

  20. (Bear in mind the wording in the final settlement, published on Groklaw that stated to the effect that UCB and BSDi were not to challenge USL’s rights to certain files. That stipulation was insisted on by USL/AT&T to in order to prevent AT&T from losing their copyright status.)

  21. If the court assigns an amount of damages, even if it’s only “de minimus” ($100), I assume it would imply that Android *does* infringe and therefore would be accompanied by an order that Google stop the infringing behavior (which might mean that Android comes off the market, or is modified to no longer contain the infringing features). Perhaps that is the result that Oracle is trying to achieve.

    What puzzles me is that the two are settling and yet Oracle is “eyeing an appeal”. That’s a contradiction in terms unless there is more than one case at issue. When the two sides in a lawsuit agree to a settlement, the case ends, period, including all appeals (unless the settlement is so badly written that they disagree on what it means, so that one party accuses the other of violating it down the road — and the court is supposed to look at that possibility before it approves the settlement).

  22. @John David Galt:

    If the court assigns an amount of damages, even if it’s only “de minimus” ($100), I assume it would imply that Android *does* infringe

    No. Used to infringe. The stipulated damages were for a nine-line rangecheck function that’s already been removed, and a few testcase files that never shipped on a phone.

    and therefore would be accompanied by an order that Google stop the infringing behavior

    No. Injunctions are not always granted.

    (which might mean that Android comes off the market, or is modified to no longer contain the infringing features). Perhaps that is the result that Oracle is trying to achieve.

    Oh, they want an injunction all right, to have lots of leverage. But they are hanging their hopes on appeal of the judge’s decision that APIs are not copyrightable.

    What puzzles me is that the two are settling and yet Oracle is “eyeing an appeal”.

    They’re not settling. Oracle is throwing in the towel on the issue where their maximum damages are in the hundreds of thousands and their probable damages are in the thousands, in order to expedite an appeal where their maximum damages are probably unlimited and their probable damages are zero. However, it’s a conditional throwing-in-the-towel — if the appeals court agrees that APIs are copyrightable, the the whole enchilada goes back to a jury.

    That’s a contradiction in terms unless there is more than one case at issue.

    There is more than one issue in the case. It’s all one case, though.

  23. Since Eric brings up patents again, it gives me the opportunity to tell my latest anti patent story.

    The common idea with patents is that they allow the little guy protection from some big company coming in and squashing them. After all, if Uncle Bob creates some widget in the garage, he can type up a little form he downloaded from the patent office, send it to DC, and wait for the big corps to buy him out for a gazillion dollars. That, anyway, is the popular conception of patents.

    I present as counter-evidence the 6502 processor. One of the most important processors in the history of computers, it was created by a spunky little group of hackers who left Motorola to form MOS Technologies. They introduced a chip that competed with the grossly overpriced 6800 and had just about the same capabilities. This little chip, along with the Z80 (a chip with a similar story) were the key to the home computer revolution of the 1980s.

    And now for the rest of the story. This spunky little start up, these little guys who busted their ass to make an amazing product, and change the world, were in fact quickly sued for patent infringement by Motorola, because, of course, Motorola’s patent machine had cranked out gazillions of over broad patents on all their silicon. Of course spunky little MOS couldn’t defend against the mighty heft of Motorola’s legal team, and as a consequence were forced to sell out to another big company, Commodore, at a big ass discount.

    So much for protecting the little guy. Not to worry though, Commodore gave them a job, and a believe a *very* nice little cubicle.

  24. They might be smart enough to understand that they’re burning reputation with this suit, and they didn’t have a ton to start with. Win or lose, they want it over so the memory can start fading.

    Except they’re planning an appeal.

  25. @Morgan Greywolf

    Yes, it’s questionable, because of how it was developed, as to who owns the copyrights on the actual files in modern Unix. However, ancient Unix’s copyright is a pretty clear AT&T-to-USL-to-Novell chain, and though the files have been replaced and changed, the API is much more continuous. If an API is copyrightable under the Oracle theory, then someone who owns the ancient Unix code copyright owns the ancient Unix API copyright, and APIs derivative of that API are derivative works even if they include zero ancient Unix code.

    Now, I’m not remotely sure if there are any releases related to POSIX standardization that get in the way. And the Caldera four-clause BSD releases of ancient Unix raise questions. But . . . they are questions. If by some lunatic decision Oracle wins on the API appeal, everything that implements an API derived from the API of ancient Unix, but without a Unix license, is suddenly potentially infringing. Mac OS X, iOS, Linux, every version of Windows NT that had the POSIX subsystem . . .

  26. @Ms. Boxer:

    Here’s one on the pro-patent side:

    “In California, legislation signed by Gov. Arnold Schwarzenegger in 2007 has been held up while the attorney general’s office makes sure the technology is unencumbered by patents, as the microstamping law requires. A gun rights group, the Calguns Foundation, went so far as to pay a $555 fee to extend a lapsing patent held by the developer to further delay the law from taking effect. ”

    http://www.nytimes.com/2012/06/13/us/code-on-shell-casings-sparks-a-gun-debate.html?pagewanted=all

  27. > Here’s one on the pro-patent side:

    Hardly. Dreadful things might have microscopic benefits, but the problem in California is that the people who advocate for liberty are apparently doing a terrible job convincing the general population of its benefits. And in this particular case, punching a number on a shell casing, you need to go for the slippery slope argument, which is rarely convincing in a population who basically think that the government have their best interests at heart.

    After all, Hilter’s policies greatly reduced the incidence of cancer and heart disease among the Jewish population of central Europe.

  28. “I present as counter-evidence the 6502 processor. One of the most important processors in the history of computers, it was created by a spunky little group of hackers who left Motorola to form MOS Technologies. They introduced a chip that competed with the grossly overpriced 6800 and had just about the same capabilities. This little chip, along with the Z80 (a chip with a similar story) were the key to the home computer revolution of the 1980s.”

    I ought to point out that Chuck Peddle and his gang had actually worked for Motorola and helped to develop the 6800. The Z80′s developers had worked for Intel. Both groups clearly bit the hands that fed them, and certainly could not have created their chips without the stuff they learned at their former employers. I really can’t blame Motorola or Intel for not being pleased with them.

  29. @Jessica Boxer:
    “the problem in California is that the people who advocate for liberty are apparently doing a terrible job convincing the general population of its benefits.”

    The late Andrew Breitbart put this very succinctly: “If you can’t sell freedom, you suck!”

  30. > they’ve got video of the appellate judge buggering a goat.

    No, Eric. Of the judge’s mother seducing a bear. It’s the new meme!

    $0 in damages? Sekret back-room deal. Trivial to see for all with their eyes open.

    Larry Ellison just bought (98% of) Lanai. Can there be any doubt that he’s building a volcanic submarine base, complete with laser-guided missiles, situated directly between the Taiwan/Chinese ODMs and Google HQ in the Bay area? I hear he’s training sharks with lasers on their heads!

    Now that Google owns Motorola, and Microsoft has turned against the OEMs in the PeeCee and Tablet space, your prediction of Total World Dominance via increasing price pressure by the Chinese & Taiwanese Android ODMs seems to have landed on the same desolate beach as your predictions of Total World Dominance (by linux) via the 64-bit transition

  31. LS on Thursday, June 21 2012 at 11:10 am said:
    > I really can’t blame Motorola or Intel for not being pleased with them.

    Sure, but there is a big difference between being displeased and using an evil tool like patents to try to squash a world changing technology. After all, they tried to kill MOS and Zilog specifically because the little guys tried to squash their margins by making a better product. Patents, consequently are being used here to prevent the world getting better stuff, which is exactly the opposite of their claimed intention.

    If you work as a chip designer at Moto and learn stuff in the process are you conceding that you will never work at another chip maker ever again? Hardly, it is no different than me learning about shoe styles and proper fitting at DSW, and then leveraging that skill to get a job at Footlocker.

  32. Steven said: Even in phones; iOS and Mac OS X both use Darwin, which implements POSIX, which is clearly derivative of the Unix API

    Well, Apple’s Unix(tm) branded via The Open Group, so one imagines that since TOG owns “Unix”(tm) it would probably, if anyone does, own the API rights.

    So they’d be in the clear on that.

    (Not, of course, that “the Unix API” as a whole would be one entity’s property, since to the extent that there is “an API” it’s part SysV/POSIX/AT+T and part BSD, isn’t it?

    Or I guess if we specify “Unix API = POSIX only” then we have to decide how much of it is ISO’s and how much is TOG’s?

    I don’t think ISO would be very happy with the idea, though TOG might.

    Deciding who “owned” what part of it would be a fight that I’d expect to outlast the copyright itself…)

  33. “If you work as a chip designer at Moto and learn stuff in the process are you conceding that you will never work at another chip maker ever again?”

    No, certainly not…but make your own, original design; don’t copy your former employer’s. The 6502 and the Z80 were too close to that of the 6800 and the 8080. Patents are supposed to protect the original design owner from just this sort of parasitism.

  34. Sigivald, the ownership of the trademarks and the ownership of the copyright diverged a long time ago.

  35. Well, Apple’s Unix(tm) branded via The Open Group, so one imagines that since TOG owns “Unix”(tm) it would probably, if anyone does, own the API rights.

    No, not at all. The trademark assignment has nothing to do with copyrights. The Open Group does not own the copyrights on Sixth Edition Unix.

    (Not, of course, that “the Unix API” as a whole would be one entity’s property, since to the extent that there is “an API” it’s part SysV/POSIX/AT+T and part BSD, isn’t it?

    Or I guess if we specify “Unix API = POSIX only” then we have to decide how much of it is ISO’s and how much is TOG’s?

    The copyright holder of the original work has a copyright in all derivative works. Insofar as any modern API can be considered a derivative work of the V6 API, and the V6 API can be considered copyrightable, the modern API would be infringing the V6 copyright.

    It’s possible that, for example, POSIX has so many changes from the interfaces of Sixth Edition Unix that it wouldn’t count as derivative, of course. I am far from a sufficient legal or technical expert to opine confidently on that.

  36. Microsoft poisons its partners
    http://www.zdnet.com/blog/btl/microsoft-poisons-its-partners/80536

    First, Surface wrecks any plans Microsoft’s PC partners might have had for tablets; now, Windows Phone 8 ruins existing sales for Microsoft’s phone partners. Welcome to the future of Microsoft “partnerships.”

    ……

    Windows Phone 8? Just like Osborne, Microsoft hasn’t announced a hard shipping date. We expect it will be out at the time as Windows 8, which we think will be by October 2012.

    So what the heck, for example, is Nokia to do for the next two quarters? Nokia, which has tied its future to Microsoft, is (or was) the Windows Phone’s biggest backer. Even before the Windows Phone 8 news the Finnish company looked like it was dying. Only last week CEO Stephen Elop, and former Microsoft big-shot, had said that Nokia would double down on the Lumia line. Elop looks like a total prat now.

  37. More NoWin pain from Tomi Ahonen:

    What Do We Now Know, after Nokia’s Latest Profit Warning & Layoffs – The Titanic Deck Chairs Moment
    http://communities-dominate.blogs.com/brands/2012/06/what-do-we-now-know-after-nokias-latest-profit-warning-layoffs-the-titanic-deck-chairs-moment.html

    The past Microsoft Windows Phone execs have talked of how much the carrier relationships of Microsoft got worse in 2011 and even Elop said now in May of 2012, that yes, it is explicitly because Microsoft owns Skype (not because Lumia phones might have Skype – they don’t, and some even can’t use Skype like Lumia 610). And we’ve seen the Windows partnership deteriorate because of this. Dell, LG and Sony have quit making Windows Phone based smartphones – for example Dell specifically said its because the carriers don’t want to sell Windows. And HTC said they are shifting away from Windows Phone to Android? Why, because carriers don’t support Windows sales. Samsung? Didn’t say why, but is shifting from Windows Phone to bada, Android and soon also Tizen.

  38. “The copyright holder of the original work has a copyright in all derivative works. Insofar as any modern API can be considered a derivative work of the V6 API, and the V6 API can be considered copyrightable, the modern API would be infringing the V6 copyright.

    I hate to be pendantic … well, that’s a lie since that’s all I am … but the copyright holder does not have a copyright to all derivative works. The creator of the derivative work has a copyright to it. But since the original work’s copyright owner has the exclusive right to create derivative works, an unauthorized derivative work is infringing.

    “It’s possible that, for example, POSIX has so many changes from the interfaces of Sixth Edition Unix that it wouldn’t count as derivative, of course. I am far from a sufficient legal or technical expert to opine confidently on that.” Ah, but I think you can legitimately state that it would be.

  39. > OK, this is just weird.

    You are assuming that corporations make decisions in the same more or less rational way that individuals do. This is supposed to be true if a corporation is working right. It is true if the CEO has all power and the personality to exercise it until such time as the board decides to fire him.

    In practice, it is a less true than it is supposed to be.

    At some point, some person or group decided: “We are getting hammered in this court. Therefore we are going to appeal”

    Then, later, some person or group, not quite the same person or group decided “We are getting hammered in this court. Let us cut our losses and get the hell out of here before something even worse happens”.

    While corporations are supposed to be run by the CEO subject to the supervision of the board, but not the second guessing of the board, badly run corporations are generally run by a committee.

    This looks to me like the work of a committee.

  40. I am not only not a lawyer, I know nothing about the law involved here and don’t know anything about the matter at hand. However…

    Isn’t an API knowledge and not copyrightable for that reason? A description of an API can be copyrighted. The code on either side of an API can be copyrighted. But the API, per se?

    I have the a most wonderful Sargent Welch periodic table, which is presumably copyrighted. I would have to find it to check, but it might include values that vary slightly from one chemistry reference to the next. No matter – the values are still knowledge.

    I believe that I could use my Sargent Welch periodic table as a source of knowledge to make my own periodic table (as long as I don’t copy formatting aspects) and copyright it.

    Wouldn’t the same line of reasoning apply to APIs?

  41. Brian, roughly that’s what Judge Alsup said. Although he used a slightly different name for the doctrine.

  42. And Oracle files its post judgment motion for judgment as a matter of law. Its a time waster intended only to set up the issues for appeal but as has become the pattern with Boies Schiller, it takes liberties with the law and tries to over extend and reclaim / claim issues that they clearly had already lost and abandoned.

    These guys just can’t play straight.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> <pre lang="" line="" escaped="" highlight="">