Print 27 comment(s) - last by drycrust3.. on Apr 6 at 3:55 AM

Software company holds out, hoping to bleed Google of more money

In U.S. District Court for the Northern District of California last week, Magistrate Judge Paul S. Grewal urged Google Inc. (GOOG) and Oracle Corp. (ORCL) to reach a settlement and licensing compromise in Oracle's lawsuit against Google's mobile Android OS.

Google, according to a Reuters report, had offered Oracle $2.8M USD in damages, a figure which Google acknowledged could grow if it loses the infringement trial (Oracle could make as much as $100M USD, according to recent valuations by expert witnesses).  More importantly Google offered to license Oracle's two asserted patents in the case, at a rate of 0.5 percent of Android's revenue for one patent, and 0.15 percent for a second patent.

Oracle wasn't impressed, so it rejected the offer.  A trial date was just set for April 16 at the San Francisco District Court.  Judge William H. Alsup will preside in the trial phase.

In announcing that the settlement could not be reached and that the parties were headed to trial, Judge Grewal solemnly stated, "[T]he parties have reached an irreconcilable impasse in their settlement discussions with the undersigned... no further conferences shall be convened... [I]n the end, some cases just need to be tried."

He wished both companies' teams of lawyers "good luck" in the final battle.

JavaGoogle has been dealt a bitter cup in the Java case. [Image Source: Oracle]

In the trial Oracle will try to establish that Google knowingly used the open source Apache distribution of Java, despite knowing it was not validly licensed and could be in infringement of Sun Microsystems' intellectual property, which Oracle inherited via its $7B USD Jan. 2010 acquisition of Sun.

Oracle's case is built heavily around emails indicating that Android managers were aware of this issue, but did not move aggressively to address it.  Oracle also displays Java processing source files contained in the Android repository and how they allegedly reuse blocks of Sun's code, without holding a valid license.

Ultimately, Oracle's goal is to find Google is in infringement of its Java patents.  While the damages (up to $100M USD) may not be huge, the licensing fees could be, if Google loses.  It's unclear exactly how much Oracle can extract from Google in terms of licensing fees, given that Microsoft Corp. (MSFT) is already raking in $10-15 USD per device [1][2][3][4].  With most Android devices already having narrow profit margins, and with Google only making a small haul on advertising, it's unclear how much revenue their really is for Oracle to gobble up, despite Android being the world's most used smartphone platform.

In addition, Apple, Inc. (AAPL) is attempting to ban Android handsets altogether in the U.S., which may make licensing fees a moot point.

Google, on the other hand, will try to establish that Sun Microsystems knew about and verbally permitted its unlicensed use of Java.  Google points to Sun Microsystems as having called Android a tool to "spread news and word about Java."

It quotes former Sun chief executive Jonathan Schwartz who praised the launch of the unlicensed Android as an "incredible" day for the Java family -- rather inconsistent language with Oracle's claims that Google flagrantly infringed on Sun's Java IP rights.  (Oracle tried to delete the blog in which the former CEO wrote this, but was foiled by webpage archiving.)

We will keep you updated as the trial progresses ahead.

Sources: ZDNet, Reuters

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By dodjer42 on 4/3/2012 11:03:27 PM , Rating: 2
1. In the west, tech companies recruit an army of lawyers to protect IP through legal process.

2. In China, companies and government organizations recruit an army of hackers to steal Western IP

- Western Lawyer costs $50 per hour
- Chinese Hacker costs $50 per month

3. Chinese products become more competitive through low IP acquisition cost.

4. Consumer buys Chinese because it contains 95% of the features at 25% of the cost

5. Chinese bundle spyware, allowing them to steal more IP and private information.

6. Pwned.

RE: madness
By FaaR on 4/4/2012 12:13:41 AM , Rating: 4
$50/hour seems like a rather cheap lawyer for a company like Google. I wouldn't be surprised if their legal counsel rakes in twice that or more per hour.

RE: madness
By Jereb on 4/4/2012 12:42:28 AM , Rating: 2
Best i've seen is $600/hr for a partner to look at your case, and this was an industrial over about $3 Million.

RE: madness
By OAKside24 on 4/4/2012 5:43:58 AM , Rating: 3
That's... disgusting.

RE: madness
By GruntboyX on 4/4/2012 1:36:02 PM , Rating: 2
to be fair, a Lawyer has to pay para legals and a small army of assistants to help organize the case for trial. I am sure it still dwarfs the actual cost, but maybe its not so egregious

RE: madness
By Solandri on 4/4/2012 7:17:30 PM , Rating: 2
No, they bill about $100-$150/hr for paralegal time.

RE: madness
By EricMartello on 4/4/2012 12:50:25 AM , Rating: 2
Yeah most lawyers in the US are going to be billing $250-$300 an hour or more, some upwards of $1,000 per hour...and chinese hackers would work for as low as $2-$5 per hour.

RE: madness
By augiem on 4/4/2012 2:35:10 PM , Rating: 2
LOL, $50/hr is half of what a plumber makes and 1/3 of what a car mechanic makes.

RE: madness
By bryanW1995 on 4/4/2012 5:37:55 PM , Rating: 2
I wish that mechanics were making $150/hr! I think my attorney is around $375/hr, though I (fortunately) almost never need her.

Licences used to be so simple.
By drycrust3 on 4/4/2012 1:26:57 AM , Rating: 3
In the trial Oracle will try to establish that Google knowingly used the open source Apache distribution of Java, despite knowing it was not validly licensed and could be in infringement of Sun Microsystems' intellectual property, which Oracle inherited via its $7B USD Jan. 2010 acquisition of Sun.

One of the potential problems here is that Java was released by Sun under the GNU General Public Licence in November 2006, which means it was originally released under GPL 2.1, which isn't compatible with the Apache 2.0 licence, but the current GPL 3.0 is compatible with the Apache licence. However, as far as I can tell there isn't an automatic progression from GPL 2.1 to GPL 3.0.
According to Wikipedia's article on GNU GPL, 'if you want to combine code licensed under different versions of GPL, then this is allowed if the code with the older GPL version includes an "any later version" statement.' I looked through the Java licence terms and I couldn't find anything like that, so I guess that means Java was remains under GPL 2.1.
While reading the Java licence, it seemed to me that the terms of it were that it was free for use in "programs", it didn't specifically mention operating systems as well, so Android may have violated the terms of that licence.
There is a version of Java called "IcedTea" which is much less restrictively licenced than the version that Sun released, and has been used by both Ubuntu and Fedora, but this doesn't seem to be the version of Java used in Android.
All in all, I think this means Oracle may have a case.

RE: Licences used to be so simple.
By Trisped on 4/4/2012 6:18:21 PM , Rating: 2
The trial is not about the use of Java, it is about the use of elements which are part of Apache and its license.
"Google used source files from Apache's Java project..."

In my mind the important thing to note is that Sun Original praised the use and did not seek licensing:
It quotes former Sun chief executive Jonathan Schwartz who praised the launch of the unlicensed Android as an "incredible" day for the Java family

So while Google needs to license the software now that Oracle will not continue granting the free use (and free advertising) of the Apache code, Oracle is way out of line with its claims and demands.

If I was Google I would look into ways of removing the copied code and start transitioning to a more open language (like C++) as this would greatly hurt Oracle (who would lose a MAJOR source of software developers) in addition to ending the law suit. It would also put a large company (Google) in a position to add the few features which Java has which are not native to C++.

By drycrust3 on 4/6/2012 3:55:47 AM , Rating: 2
One of the trio that formed the movie company MGM was famous for saying "A verbal contract is worth the paper it's written on". Praise, even by the CEO of a company, doesn't equate to a contract or licence.
As I said, as far as I can tell Java was released under the GNU General Public Licence 2.1, which isn't the same as the Apache licence.
If you look at the licence of Java it uses the term "program", it doesn't say "program or operating system". While this is probably because no one ever thought of using Java as an OS, the distinction remains.

What to buy in the future
By Scootie on 4/4/2012 2:21:16 AM , Rating: 2
If this goes on soon US customers will be left with nothing but to buy iphones ... if MS wont rise again in the mobile sector.

RE: What to buy in the future
By FaaR on 4/4/12, Rating: -1
RE: What to buy in the future
By Laitainion on 4/4/2012 6:07:16 AM , Rating: 2
He wasn't blaming Apple, just observing that this is really to their advantage.

RE: What to buy in the future
By vXv on 4/4/2012 7:55:04 AM , Rating: 2
No if this nonsense does not stop US customers might end up with not having any smartphones left to buy. (including the iphone).

Does not sound like a bad thing though as it might finally open the eyes of the US government to fix this broken system. Currently bribes err "donations" are stopping this from happening.

Oracle don't want damages.
By psonice on 4/4/2012 9:31:28 AM , Rating: 3
What they want is for google to lose this case, because that gives them the power to get android banned from sale (at least until java is removed or made legal).

Why? Because if google loses the case, they'll have to get a license for java (which is what they should have done in the first place from the look of it). Oracle get to decide the licensing fees, and they can ask for a high price *per device*.

Think about it - if android continues selling in huge numbers, and oracle get say $5-10 per device, what's worth more - that license deal, or $100m in damages? And if they win, they'll get the damages thrown in as a bonus.

They're not interested in getting java removed from android or 'killing android' or some crap the various fanboys dream up. They want it properly licensed, and they'll probably insist that it's compatible with regular java in future because that benefits them plenty too.

Caught red handed.
By Trisped on 4/4/2012 6:32:01 PM , Rating: 2
Oracle tried to delete the blog in which the former CEO wrote this, but was foiled by webpage archiving.
Sounds like an admission of guilt to me. If it did not hurt your case, why did you take it down?

The End of Android
By Mike Acker on 4/5/2012 9:30:59 AM , Rating: 2
with Oracle and Apple both trying to rip the heart out of Android, AND hackers having a field day with Android my prediction is: by the end of summer you won't be able to buy an Android phone. But Jobs will NOT get the last laugh: Windows\Phone8 will become the major competition to the iPhone macumba

Somewhere... out there... Tony is smiling happily
By Pirks on 4/3/12, Rating: -1
By bupkus on 4/3/2012 11:11:29 PM , Rating: 1
Crapdroid has to die, WP8 FTW!

In the following "rant" posted in youtube, Steve Jobs is describing the fragmentation of Android and the superior approach by Apple.
So, to me it would follow that Android being so inferior to iOS would inevitably fail to survive by the sheer weight of maintenance. Why then would Apple spend so much to defeat Android in court[if it is in fact Crapdroid]?

By Gungel on 4/3/2012 11:15:29 PM , Rating: 2
Asnwer: To protect us from evil Google

By StevoLincolnite on 4/4/2012 2:57:08 AM , Rating: 1
The fragmentation *is* an issue for Android, a rather large one infact, in 6 months time you may or may not even get an update for your handset, and compatibility will always been an issue.

Apple's closed Garden approach doesn't sit well with me either. - You *have* to be pretty much tied into all of Apples stuff, the device and OS aesthetics aren't anything special either.
If a device has a critical design flaw, you pretty much have no other alternatives with the same OS.
Want a feature such as a memory card slot? Or decent speakers? Too bad. You have no other options.

I think Microsoft has it nailed down well idea-wise with the Windows phone.
It has the diversity of Android with none of it's fragmentation and the strengths of Apples gardened wall approach with being incredibly efficient and speedy without much of a problem in the area of software compatibility issues.

If you were to draw a comparison to the Desktop world... iOS is like MacOS as it's only on the Mac.
Android is like Linux with dozens of different versions and distro's.
Windows Phone 7 is like Windows, one software platform available to all the different manufacturers, but yet is still standardized.

By retrospooty on 4/4/2012 9:30:00 AM , Rating: 1
You couldnt be more wrong. Fragmentaion is the result of variety, and that is Android's strength. You cant get an iPhone with a large screen, or removable battery, or 4G or qwerty kb.

True it may be frustrating for users wanting an Android 4 upgrade, but ROM development is not an easy task. It takes time. Apple has it easy there with 1 current model and 1 or 2 very similar previous models. So, if buying a phone based on potential future OS/ROM updates is a good thing, then its Apple's advantage on that front, but anyone that buys a phone buys it based on the features it has right now. Not on potential OS upgrades. IF you bought a phone and you arent happy with its feature set, why did you buy it?

Anyhow, on the legal case? I wouldnt worry. 1 judge's opinion in one direction just means they will appeal it and look for a smarter judge.

By WalksTheWalk on 4/4/2012 12:46:15 PM , Rating: 2
You can call it fragmentation or choice. Android offers the most diverse choices of any smartphone OS.

By Trisped on 4/4/2012 6:28:53 PM , Rating: 2
Android fragmentation is not referring to the device diversity, it is referring to the additional user interfaces (UI) added by manufactures which GREATLY change the user experience.


To put it in perspective, I custom built my Windows 7 desktop, but the user interface is exactly the same as my laptop and work computer (both Windows 7). The user interface of an HTC or Samsung Android device is not the same, which means I (the user) must go through the annoying process of finding a solution to a problem on one handset (HTC for example), and then find another solution to solve the same problem on the other (Samsung).

To make matters worse, if you buy an Android device you will be unable to get updates for the device unless your manufacture (and cell carrier) approve the update (which I think they do not do so you will have to buy a new phone). My Windows computers can always install all updates and service packs released for my current OS and can usually get all the needed/wanted updates for the OS up to 4 years (some times more) after the OS originally ships. How many Android phones have we heard about which can NEVER upgrade to a newer OS release even if the OS update is released within 9 months of the phone launching? I hear some companies are making it easier to get these updates, or even guarantying 1-2 years worth of updates, but it is nowhere near as ubiquitous as what Windows users are use to.


By retrospooty on 4/5/2012 9:15:07 AM , Rating: 2
Yes, there is alot of variety in Android devices. Different designs and different makers. Again, why would anyone buy a phone based on features it doesnt have and may or may not get. You buy a phone based on what it has today. Its really not that big of a deal. If this situation is too much for you to handle then by all means, you are a perfect customer for an iPhone.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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