This morning, the Federal Circuit Court of Appeals revived the long-running case of Oracle America, Inc. v. Google LLC. in a 56-page ruling. The ruling is particularly important to programmers, as it holds that Google’s copying of the declaring code and structure, sequence, and organization (“SSO”)* of an Oracle-owned Application Programming Interface, or “API”, is not fair use as a matter of law. The Court went on to suggest that this liability could have been avoided had Google developed its own APIs — APIs that would mimic those of Oracle in function, concluding that:
allowing Google to commercially exploit Oracle’s work will not advance the purposes of copyright in this case. Although Google could have furthered copyright’s goals of promoting creative expression and innovation by developing its own APIs, or by licensing Oracle’s APIs for use in developing a new platform, it chose to copy Oracle’s creative efforts instead. There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform.
In important cases, entities not involved in the litigation often file “amicus curiae”, or “friend of the court” briefs. Four full pages — over 7 % — of this decision is simply a list of amici. Reviewing the Amici list shows just how important this decision is for the future of interoperability and software. These include such entities as the Motion Picture Association of America, the Screen Actors Guild, the American Federation of Television and Radio Artists, the Recording Industry Association of America, associations of press and other photographers, and Business Software Alliance, the Computer & Communications Industry Association, the Electronic Frontier Foundation, Mozilla, Microsoft, Red Hat, HP, Linus Torvalds (creator of Linux), Vinton Cerf (one of the creators of the internet), Steve Wozniak (Apple Co-Founder) and GitHub.
Given the importance of the case to one of the engines of the American economy, the chance of the Supreme Court granting review is a good deal higher than the average case. At the same time, given the dollar amount of damages sought in this case (potentially measured in the billions, with a “b”), there is a compelling reason to believe that Google will seek to settle after this decision. Copyright lawyers hoping for new guidance on the “fair use” copyright defense are likely hoping for a Supreme Court review and published opinion.
Understanding the case involves examining something that even lawyers find overly technical: The procedural history. A copyright verdict requires three determinations by the Court: (a) copyright violation; (b) no fair use defense; and (c) what the financial damages are. After a jury trial in the United States District Court for the Northern District of California (the federal trial court in the Bay Area), the jury found that Google infringed Oracle’s copyrights in the Java Standard Edition platform, but was unable to reach a verdict on the “fair use” defense.** The trial court overturned the jury’s verdict, finding that the API packages were not copyrightable as a matter of law. In a 2014 case, the Federal Circuit Court of Appeals reversed, holding that the declaring code and the SSO of the Java API packages are entitled to copyright protection. The jury verdict of copyright infringement was reinstated, and the case was “remanded”, or sent back, to the trial court for a trial on Google’s fair use defense. Google attempted to appeal that decision to the Supreme Court, but the Supreme Court refused to hear the appeal. On remand, the jury found that Google’s use fell under the “fair use” exemption to copyright law. Today’s case reversed that finding and remanded to the trial court. If the Supreme Court does not overturn today’s ruling, the case will go back for a third verdict, this time on damages, making it one of the few cases to have each of the three copyright determinations made by a different jury, at least two of which were reviewed in separate appeals.
Today’s decision was not concerned with whether copyright infringement took place — that was determined in the prior appeal. It was also unconcerned with damages — that will be determined on remand. Rather, today’s decision addressed only the “fair use” defense.
The most fun way to understand fair use is to watch the EFF’s video of Disney® characters explaining it. The United States Copyright Office has a quick summary of the elements comprising fair use. As there is no copyright in original United States government works, we are able to copy this summary here:
Fair use is a legal doctrine that promotes freedom of expression by permitting the unlicensed use of copyright-protected works in certain circumstances. Section 107 of the Copyright Act provides the statutory framework for determining whether something is a fair use and identifies certain types of uses—such as criticism, comment, news reporting, teaching, scholarship, and research—as examples of activities that may qualify as fair use. Section 107 calls for consideration of the following four factors in evaluating a question of fair use:
- Purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes: Courts look at how the party claiming fair use is using the copyrighted work, and are more likely to find that nonprofit educational and noncommercial uses are fair. This does not mean, however, that all nonprofit education and noncommercial uses are fair and all commercial uses are not fair; instead, courts will balance the purpose and character of the use against the other factors below. Additionally, “transformative” uses are more likely to be considered fair. Transformative uses are those that add something new, with a further purpose or different character, and do not substitute for the original use of the work.
- Nature of the copyrighted work: This factor analyzes the degree to which the work that was used relates to copyright’s purpose of encouraging creative expression. Thus, using a more creative or imaginative work (such as a novel, movie, or song) is less likely to support a claim of a fair use than using a factual work (such as a technical article or news item). In addition, use of an unpublished work is less likely to be considered fair.
- Amount and substantiality of the portion used in relation to the copyrighted work as a whole: Under this factor, courts look at both the quantity and quality of the copyrighted material that was used. If the use includes a large portion of the copyrighted work, fair use is less likely to be found; if the use employs only a small amount of copyrighted material, fair use is more likely. That said, some courts have found use of an entire work to be fair under certain circumstances. And in other contexts, using even a small amount of a copyrighted work was determined not to be fair because the selection was an important part—or the “heart”—of the work.
- Effect of the use upon the potential market for or value of the copyrighted work: Here, courts review whether, and to what extent, the unlicensed use harms the existing or future market for the copyright owner’s original work. In assessing this factor, courts consider whether the use is hurting the current market for the original work (for example, by displacing sales of the original) and/or whether the use could cause substantial harm if it were to become widespread.
In addition to the above, other factors may also be considered by a court in weighing a fair use question, depending upon the circumstances. Courts evaluate fair use claims on a case-by-case basis, and the outcome of any given case depends on a fact-specific inquiry. This means that there is no formula to ensure that a predetermined percentage or amount of a work—or specific number of words, lines, pages, copies—may be used without permission.
Before applying these factors, it is important to understand what copying is at issue. The Java APIs “allow programmers to use the prewritten code to build certain functions into their own programs rather than write their own code to perform those functions from scratch. They are shortcuts. … The prewritten programs are organized into packages, classes, and methods. Specifically, an API package is a collection of classes and each class contains methods and other elements. Each method performs a specific function, sparing a programmer the need to write Java code from scratch to perform that function.” Slip opinion page 8 (internal quotation marks omitted).
The basic infringement alleged stems from Google’s desire to make programming for its Android operating system easier by importing API structures and functions. This avoids programmers having to do much, if any, work to port a Java program written for another Java platform to the Android platform. Google had difficulty writing its own APIs providing the same function and rules of use as the Oracle APIs, failed to reach an agreement with Oracle on a license fee to use the APIs, and elected to simply copy 11,500 lines of code from Oracle and the SSO of the Java API packages. In what can best be described as a risky strategy, Google appears to have intentionally copied the materials in hopes that a fair use defense would prevail in an infringement suit. Unless the Supreme Court grants review, Google’s strategy appears to have failed.
BLOG EXTRA; This is a good spot to discuss the relationship patents, copyrights, and trademarks. Patents protect function while copyrights protect the actual way a thing has been expressed. One may infringe a copyright without infringing a patent (which seems to have happened in today’s case). Because the function of the code is not protected, Google could presumably have written its own APIs and avoided copyright liability. The opposite is also possible: Google could have copied far less code, enabling a fair use defense, but if the code it copied was responsible for performing a patented function, Google would have avoided copyright liability while creating patent liability. At this point, we can bring in a trademark issue — had Google copied neither the code nor infringed a patent, but displayed on the Android boot screen “Oracle’s Java”, it could face a trademark suit.
The fair use defense is found in Section 107 of the Copyright Act, and requires a case-by-case determination as to whether a particular use is fair. Of interest is that “in balancing the four statutory factors [set out in Section 107 as factors in determining fair use], courts consider ‘whether the copyright law’s goal of ‘promot[ing] the Progress of Science and useful Arts’ … would be better served by allowing the use than by preventing it.” Slip. Opinion 18. This is a reflection of the fact that the founding fathers believed intellectual property so important that they included it in the text of the constitution. As a result, changes to the statute and judicial interpretations of the statute are measured against the constitutional goals and limitations.
The Court goes on to explain that fair use is an “affirmative defense”, which means that the burden of proving fair use falls to the alleged infringer.
In analyzing the fair use factors, the Court first addressed the purpose and charater of the use, finding that (a) the character of the use was commercial, weighing against a finding of fair use; (b) moving the code to the new context of Android on mobile, or a mere change in format, in a context where the copyright was verbatim, for an identical function and purpose and without changes to the expressive content or message, did not rise to the level of transformative use; and (c) The purpose and character prong in this case must conform to a Ninth Circuit holding that “one who acts in bad faith should be barred from invoking the equitable defense of fair use.” Today’s case went on to hold that “while bad faith may weigh against fair use, a copyist’s good faith cannot weigh in favor of fair use.” The Court determined that even if Google did not operate in bad faith, “the highly commercial and non-transformative nature” of the use weigh against a finding of fair use.”***
The second factor, the nature of the copyrighted work, “turns on whether the work is informational or creative,” as factual works are more likely to fall under fair use. The Court goes on to hold that the Copyright Act, as amended in 1980, “unambiguously extended copyright protection to computer programs.”****
The third factor, the amount and substantiality of the portion used in the context of the copyrighted work, seemed to turn on Google’s decision to copy 11,330 more lines of code than the 170 lines minimally required to write in Java. Even though there were millions of lines of code that were not copied, the court found that “no reasonable jury could conclude that what was copied was qualitatively insignificant, particularly when the material copied was important to the creation of the Android platform.” The Court found the third factor was either neutral or weighed against fair use.
The fourth factor, the effect on the potential market, was identified as “undoubtedly the single most important element of fair use” (Slip. Cp. 48, quoting the US Supreme Court). The Court also applied the Ninth Circuit holding that likely market harm can be presumed where a use is commercial and not transformative.*** The Court held that the fourth factor weighs heavily against fair use.
Balancing the four factors, the Court found that there was no fair use as a matter of law, substituting its determination for that of the jury.
Perhaps in recognition of the widespread chilling effect this holding will have on development of interoperable computer systems and code, the Court adds that they “do not conclude a fair use defense could never be sustained in an action involving the copyright of computer code.” (Slip Op. 54).
It is hard to overstate the importance of APIs to computer programming. It is likely that some form of legislative fix or judicial clarification will be forthcoming. Given the money available to the litigants, it is also very likely that a spirited effort will be made to get the matter before the U.S. Supreme Court. While we await the next developments in this case and on the subject of APIs, however, it is more critical than ever to clear API copying with counsel before copying them.
It is also possible — perhaps likely, given GitHub’s participation as Amici — that the various open source licenses will be modified to directly address copying APIs in light of this case. When seeking legal advice, it is important that your lawyer be very familiar with copyright law and open source licensing.
* The court’s decision will be confusing to many programmers who understand an SSO to mean “single sign-on” — by far the more common use of the initials “SSO”. The Court defines “SSO” as instead meaning “structure, sequence, and organization”. The single sign-on process is generally something companies complete to provide the back end for, as it makes it far more difficult to stop using the service that provides the back end. It is likely for this reason that Facebook®, Google®, Amazon®, and others often provide free or largely low-cost access to single sign-on. It is important to note that while we think it unlikely that we will see a copyright case involving simply using single sign-on, readers of this article should retain a lawyer to review their use of single sign-on to ensure the absence of copyright and patent issues.
** As one might expect in a case between two tech giants, patent claims were also raised. However, the jury found no patent infringement, and that finding was not reviewed in today’s case. Copyright cases are normally heard in the regional Circuit Court where the trial court is located. However, because there were patent claims brought in the case — even though the appeal concerned copyright claims only — the Federal Circuit had exclusive jurisdiction. Without the patent claims, the case would have been heard by the Ninth Circuit Court of Appeals.
*** Much as the Supreme Court has done with patent eligibility and obviousness, the Federal Circuit has incorporated one of the prongs of the fair use test into another of the prongs. In this case, it uses the second prong — whether a work is transformative — to determine the third prong, the purpose and character of use. So too does it collapse the first factor into the fourth factor, effect on the potential market.
**** The original “bargain” of copyright and patent law was that a time-limited exclusive monopoly would be granted to the inventor or author in exchange for teaching others how to practice the invention or for making the work available to the public at the end of the copyright period. Today’s case hinted at the overlap between patents and copyrights, holding that “reasonable jurors could have concluded that functional considerations were both substantial and important [and based] on that assumed factual finding … factor two favors a finding of fair use.” Of course, intellectual property protection for function is available via the patent system, not the copyright system. At the same time, copyright can extend to compiled, computer-readable object code that performs functions. The IP ecosystem may thus protect a specific implementation of function via copyright and patent.