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Meeting of the Larrys: Larry Page and Larry Ellison, CEOs of Google and Oracle met, but were unable to work out a mutually acceptable Java licensing arrangement for Oracle.  (Source: Business Insider/The New York Post)

Google could remove Java from the Android project, leaving an interface that partners who license J2ME could plug the technology into. That would be okay for Samsung, Motorola, LG Electronics, and Sony who are all J2ME licensees, but it could hurt HTC, the second largest Android manufacturer.  (Source: Linux Tux)
Settlement talks reach impasse; Oracle demands double-dip licensing fees on the OS and handset levels

Bloomberg reports that another round of talks between software giants Google Inc. (GOOG) and Oracle Corp. (ORCL) ended at an impasse.  Oracle Corp. is currently suing Google for using pieces of its patented Java2ME (J2ME) code in Android via the Apache Project's Java Standard Edition "Harmony" (J2SE).  

Google CEO Larry Page sat with Oracle CEO Larry Ellison for 10 hours trying to work out an acceptable licensing agreement.  The talks ended with no deal reached, with both parties agreeing to talk to court officials about "when further discussions will take place and whether the further attendance of Mr. Ellison and Mr. Page will be required."

I. Oracle's Plan For Double-Dip License Fees

The case represents a substantial risk for both firms.

Working in Oracle's favor is the fact that the judge has suggested that Google's infringement of the Java technology 
was "brazen".  But Google has some advantages of its own.  It dug up documents from the former CEO of Sun Microsystems -- the company Oracle acquired the Java intellectual property from in 2010 -- praising Google's use of Java in Android, and casting doubt on whether Sun was opposed to the unpaid use.  

Furthermore, Google succeeded in convincing the judge to toss out the $6.1B USD that Oracle wanted -- a figure which included speculative future damages.  Oracle has since revised its estimate downwards to $2.3B USD, a figure that still includes a $1.2B USD speculative damages total for 2012, which Google contends is unfair.

If the pair can't settle up, the case will likely go to trial.  If that happens Oracle will be seeking one thing -- a permanent injunction banning U.S. Android sales.  Unlike Apple, Inc. (
AAPL) who is seeking a similar injunction in hopes of permanently preventing U.S. Android sales, Oracle's "permanent" injunction bid would be in hopes of forcing Google into a lucrative licensing deal.  Oracle could ask for a royalty as high as $15-20 per device license, on top of the identical fee it already charges Android handset makers like Samsung Electronics Comp., Ltd.'s (SEO 005930).

This is an important aspect to understand of why Oracle's campaign is more harmful to Android, than Microsoft's licensing efforts -- Oracle is double-dipping, seeking fees both at the OS and handset levels, where as Microsoft is content to stick with handset licensing.

Google offers Android licenses to handset manufacturers for free, though it does earn a certain amount of revenue via its cut of app sales and Android-targeted licensing.  The question becomes how much of that revenue can Oracle take before Android starts to become a losing proposition for Google.

If Google is unable to beat Oracle in court, it will surely regret rejecting Sun's 2006 offer to license Java2ME to Android for $100M USD.

II. Google Could Remove Java from Android

One possible way Google could shirk the licensing fees, though, is to remove all the J2SE/J2ME code, leaving a naked interface for partners to implement their own build of J2ME.  As most Android partners -- such as Samsung and Google subsidiary Motorola Mobility – are J2ME licensees, Oracle likely couldn't do anything about this scheme.  The one major player who would be hurt by such an arrangement would be HTC Corp. (SEO:066570).  The Taiwanese manufacturer, believed to be the second largest Android handset maker, does not license J2ME.  Thus it would likely be summarily sued by Oracle, should it try to plug in the technology.

If Google adopts such a strategy (and there's no clear reason why it wouldn't other than to protect HTC), it would still have to pay the damages for past infringement, but it would be spared from the ongoing double-dip licensing scheme.  That would mean a big loss for Oracle, as the license fees comprise the majority of the money Oracle hopes to pocket in future years as a result of the case.

One thing to recall is that Google is sitting on a $39B USD cash surplus [source], so it can afford to stomach some damages.  But licensing fees?  Those it should be far more concerned about, as they affect its ongoing bottom line.



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Confusing
By Flunk on 9/23/2011 9:27:07 AM , Rating: 2
Android is based on J2SE (via Apache Harmony), not J2ME.




RE: Confusing
By JasonMick (blog) on 9/23/2011 9:37:35 AM , Rating: 2
quote:
Android is based on J2SE (via Apache Harmony), not J2ME.

Oracle's claim is basically that Apache's implementation of J2SE (Harmony) used in Android directly (and illegally) copies blocks of J2ME code.

So you can call it J2SE or you can call it J2ME, but it's a big headache for Google right now...


RE: Confusing
By Flunk on 9/23/2011 11:22:31 AM , Rating: 5
Your article is written from the perspective that Oracle's claim is correct and has been proven. Android's Java library doesn't even include any of the ME classes.

It really seems like you don't really understand the technology here and have jumped to conclusions that the available evidence doesn't warrant.


RE: Confusing
By JasonMick (blog) on 9/23/2011 12:12:23 PM , Rating: 2
quote:
Your article is written from the perspective that Oracle's claim is correct and has been proven. Android's Java library doesn't even include any of the ME classes.

It really seems like you don't really understand the technology here and have jumped to conclusions that the available evidence doesn't warrant.

Of course if Google wins the situation will be different, but the judge in the case already suggested Google "brazenly" infringed on Oracle's IP, so a victory is looking pretty unlikely.

As is, there's headers in J2SE that match J2ME exactly. And there's emails indicating that those close to the project knowingly copied them. What's there not to understand about that?

Did you work on the J2SE project? How is your knowledge in this matter superior to mine?

Do I think Oracle's claims are fair? No. I'm against software patents in general. But they are (sadly) the law of the land and Google appears to be in a bad spot here.

What I point out in the article is an easy out for Google, should it lose in court (which again, as I said, looks pretty likely).


RE: Confusing
By xype on 9/23/11, Rating: -1
RE: Confusing
By JasonMick (blog) on 9/23/11, Rating: 0
RE: Confusing
By xype on 9/23/11, Rating: 0
RE: Confusing
By jhb116 on 9/23/2011 7:11:24 PM , Rating: 2
agreed, however, it would appear that this case will take some time to work through. If Google was smart - they would assume that the case will be lost and start coding it out now. Maybe they could offer to purchase WebOs from HP or get Symbian now that Nokia has abandon it. Java was a great concept ruined with licensing, I have no doubt that Oracle will make that situation worse. Google should segregate itself from Oracle as much as possible....


RE: Confusing
By Some1ne on 9/24/2011 8:42:42 PM , Rating: 4
What are these "headers" you keep talking about? There are no header files in Java. The only possible exceptions are a small handful of system utilities that are implemented in a compiled language for performance reasons, and the implementation of the Java VM itself.

However, the Java Runtime Environment and core library is implemented almost entirely in Java, and thus has no header files for anyone to copy, infringe upon, replace, or "drop in".


RE: Confusing
By Flunk on 9/23/2011 1:30:00 PM , Rating: 2
I'm not saying Google is correct, I believe that they do infringe on Oracles copyright because they don't have a TCK license.

J2SE predates J2ME by many years, the headers are not copied from J2ME but rather the other way around. J2ME was designed as a subset of J2SE with some added classes for mobile applications. This is all very common knowledge amount Java Programmers.

Don't bring patents into this, this particular issue is over intellectual property.

My argument is not that Google is right, just that you have a lot of the technical details totally wrong. Google tried to create a Mobile Java version that didn't infringe on the J2ME framework in the first place, since Oracle sued them anyway that idea didn't seem to work. Suggesting that they "drop J2ME" now is nonsensical.


RE: Confusing
By NellyFromMA on 9/23/11, Rating: 0
RE: Confusing
By Horizon79 on 9/23/2011 4:02:58 PM , Rating: 2
Patents are part of this battle. There are 7 patents that Sun had are being infringed by Google's Dalvik - Oracle claims. You can read about those patents here -
http://en.swpat.org/wiki/Oracle_v._Google_(2010,_U...


RE: Confusing
By Mike Acker on 9/24/2011 9:45:20 AM , Rating: 2
the article notes: "But Google has some advantages of its own. It dug up documents from the former CEO of Sun Microsystems -- the company Oracle acquired the Java intellectual property from in 2010 -- praising Google's use of Java in Android, and casting doubt on whether Sun was opposed to the unpaid use."

uh oh.... apparently there was an earlier concurrence of wills. Ellison is toast.


Uhh
By Pessimism on 9/23/2011 9:33:41 AM , Rating: 4
LARRY: I CAN HAZ J2ME FOR FREE?
LARRY: NO.

How did this conversation take TEN HOURS? I'm guessing it included 18 holes of golf, two meals, and a half dozen blow filled hookers?




RE: Uhh
By MrTeal on 9/23/2011 10:15:06 AM , Rating: 2
Have you even been to a billionaire business meeting that didn't involve blow filled hookers?


RE: Uhh
By lamerz4391 on 9/23/2011 11:22:28 AM , Rating: 2
I thought they always snort the blow off the hooker's ass.


RE: Uhh
By NellyFromMA on 9/23/2011 3:51:45 PM , Rating: 2
Insert random 'not blow; you mean crack' joke here.


RE: Uhh
By Kaldor on 9/23/2011 1:29:48 PM , Rating: 1
I would give you a 6 if I could, lol.


code conversion?
By Darksurf on 9/23/2011 1:07:30 PM , Rating: 2
I haven't really looked too much into the new version of C++ (C++0x), but I wonder it has grown enough to compare with java and even have easy conversion over. Considering java and C++ are similar (or cousins as I like to call them due to their similarities, yet differences), if C++0x has acquired the ease-ability of java, wouldn't that make migration less painful and actually have benefit of the speed C? I'm not sure on what we would do with apps tho, but at least the main android OS would be covered.




RE: code conversion?
By 2PM on 9/23/2011 2:00:41 PM , Rating: 2
speed doesn't come with the syntax. the C/C++ code is usually compiled to the machine native binary, which is (sometimes) faster than the code that's compiled to run in a runtime environment, such as JVM or Dalvik. C++ on a mobile platforms doesn't make much sense, because that code won't work on all different devices.


RE: code conversion?
By dcollins on 9/23/2011 2:08:38 PM , Rating: 2
No, this wouldn't work at all. Java runs in a Virtual Machine, C++ is compiled directly to machine code. Google would have to rethink its entire security model which is based about sandboxing code within the java virtual machine, not to mention ALL existing Android program would need to be rewritten. Not feasible at all.

Jason, your idea of removing the offending header files from Android is ludicrous. How would Google develop and test the OS internally? It would mean Google would not be able to ship a working operating system to handset makers. Hey, here's 95% of an operating system, you provide the remaining 5%! I don't think that would go over very well considering handset makers are already having difficulty integrating upstream changes into their existing android distributions.


By Horizon79 on 9/23/2011 2:47:00 PM , Rating: 4
You might go back a while and see what he wrote -
http://fosspatents.blogspot.com/2011/07/judge-orde...

Besides, I don't see any reason why 37 API specifications and 12 copied files should come to the core of 'future licensing' - because they can be bypassed. There are seven patents among which one is getting re-examination certificate (one that deals with declaring static initializers). So, the future damages are based on how much value these patents carry within the whole of Android.

I don't see any reason for Oracle to get an injunction based on these seven patents (or less) and copyright violation (that can be worked around). Sun used to license these under fair terms and these could be considered at par with FRAND patents. To remind the reader, I am talking about 37 API specs, 12 copied files and 7 patents because these are only the ceiling of Google's infringements alleged by Oracle.

Last but not the least, Mr Muller never reproduced the crux of Judge Alsup's motion on July 22. It goes like this -

Given the presence in this case of a real-world “comparable” close on point — the last Sun offer in 2006 — the Court is strongly of the view that the hypothetical negotiation should take that $100 million offer as the starting point and adjust as follows:
• Adjust downward for the fact that Java covers far more
than the claims in suit and therefore the 2006 offer covered
far more than the claims in suit.
• Adjust downward for the fact that Android covers far more
than the claims in suit.
• Adjust upward due to the necessary assumption that allclaims asserted must be deemed valid and infringed(whereas in 2006 this was uncertain).
• Adjust upward or downward, as the case may be, for any further changes known to the parties between the date of the offer and the date of first infringement.
• Adjust upward or downward for other comparables andother Georgia-Pacific factors.
• Adjust downward for the fact that the offer included acopyright license, an issue not addressed herein (and whichwill not be addressed until the final report is done).

These whole damages calculation guideline set by Alsup was never part of Muller's analysis. Instead he insisted on a rumor of "$10-$15 per handset", which is neither confirmed by Oracle nor by any handset makers.




What a work-around.
By snakeInTheGrass on 9/25/2011 11:35:25 AM , Rating: 3
quote:
One possible way Google could shirk the licensing fees, though, is to remove all the J2SE/J2ME code, leaving a naked interface for partners to implement their own build of J2ME.


Jesus, so not only do they have fragmented hardware specs and app marketplaces, but now they could avoid paying licensing fees by having the partners implement the J2ME pieces themselves? Wow - nice opportunity to have all kinds of inconsistencies (different bugs, more differences in performance due to variations in implementations) show up across the platforms as well.

Or do those partners just copy/paste Sun's reference in at that point? In which case I guess you'd only be at the mercy of the vendors as to when or if they actually role out fixes for certain devices?

What a win that would be in any case.




Per handset license, why?
By Horizon79 on 9/23/2011 3:16:11 PM , Rating: 2
Mr Mueller suggests Oracle may ask for per handset license from handset makers - something that neither handset makers nor Oracle suggests. The motion on 07/22 by Judge Alsup did actually mention something about Google's business model -
"The accused product is Android, but unlike a typical infringing product, Android is not sold. Instead, Google profits from Android indirectly. Any valuation of Android must take this business model into account. Put differently, the question is “what is the market value of Android — what could it be bought or sold for — and to what extent do the infringing features contribute to that overall value?” "
It clearly indicates - the terms of settlement would involve a percentage of Google's advertising revenues and not per handset fee as what Mueller suggests.

Now coming back to handset makers, Samsung and Motorola already bought J2ME license from Sun. If they use Android on their devices, do they violate those patents which Oracle is claiming to be infringed by Android? I don't think so. I don't see even Oracle arguing on those lines.




I'm confused..
By nocturne_81 on 9/29/2011 9:02:10 AM , Rating: 2
Isn't the Apache license practically identical to GPL..?

In that case, any submitted code would be GPL.. so..

I'm still confused..




Another simplistic article
By melgross on 9/23/11, Rating: 0
RE: Another simplistic article
By Horizon79 on 9/23/2011 2:03:32 PM , Rating: 1
There is a public number that Oracle has demanded - it's 2.6 billion - that includes past and future damages (contrary to what Mr Mullar says). Judge Alsup noted in his motion on 07/22 -
He (Cockburn - Oracle side damage expert) opined that the fair market value of a license reached through hypothetical negotiations at the time infringement began would be “at
least $1.4 billion” and “could be as much as $6.1 billion,” “depending on different assumed fact scenarios.” He further opined that “the most likely hypothetical license negotiation outcome in this case would have been a total royalty with a net present value of approximately $2.6 billion,” structured as “an up-front payment of $0.9 billion to $1.4 billion” plus “a share of revenues attributable to Android . . . between 10 and 15 percent”


Online Sticker printing
By jamesmarton on 9/23/11, Rating: 0
Correction
By Tony Swash on 9/23/11, Rating: -1
RE: Correction
By Horizon79 on 9/23/2011 2:12:03 PM , Rating: 1
It's Andy Rubin's email to "use Java anyway" that draws attention to willful infringements. Lindholm email probably was regarding non-existence of alternative platforms.


RE: Correction
By Tony Swash on 9/23/11, Rating: 0
RE: Correction
By Horizon79 on 9/23/2011 3:35:52 PM , Rating: 2
Lindholm wrote the email on the morning of August 6, 2010 - that Google may attribute to a late discovery. Also, Lindholm's (he's just a developer) letters won't get as much weight as Rubin's ones do since Rubin is the VP of Google's Mobile division. Willful infringement can (up to) triple the damages.


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