(Source: Trip Advisor/James Lynwood)
Google may pay a bit in ongoing licensing fees, but the settlement for past damages will be small
Oracle Corp. (ORCL) aggressively pursued Google Inc. (GOOG) for reportedly knowingly infringing on Oracle's Java intellectual property via an unlicensed Apache open source distribution. The Java IP had been acquired by Oracle in its April 2009 acquisition of Sun Microsystems.
I. From a $6B USD Case to a $100M USD One
In Oracle's lawsuit, both sides fought hard in court. Oracle scored court permission to use multiple emails from top Google executives and Android engineers, which cumulatively indicated that it may have knowingly have violated Oracle's intellectual property. Google returned fire, airing a 2007 statement from ex-Sun Microsystems CEO Jonathan Schwartz endorsing Google's use, which indicated that it might have been unofficially authorized/condoned after all.
However, it appears Google is prepared to come out relatively well from the patent dispute. While Oracle had sought up to $6.1B USD in infringement damages, ultimately, it will almost certainly end up with less than $100M USD in damages for pass infringement.
That's a huge win for Google and its Android partners.
The lower settlement estimations come based on Oracle's expert witness Dr. Iain M. Cockburn, who is a professor of finance and economics at Boston University. Dr. Cockburn initially had delivered an estimate of $1.4B-$6.1B USD.
U.S. District Court Judge William Alsup, who at times has admonished both Google and Oracle, voiced critism about Dr. Cockburn's initial approach. He pointed out that of Oracle's 22 acquired Java patents, Dr. Cockburn had drastically upgraded the value of the 6 in contention in the case. He ruled that only an equal valuation of the entire portfolio was possible.
II. Oracle Sets Its Sights Lower
Dr. Cockburn was forced to deliver a new valuation, which was much lower. Ultimately it looks like Oracle may get ~$5M USD for direct infringment of U.S. Patent No. 5966702 "Method And Apparatus For Preprocessing And Packaging Class Files", and U.S. Patent No. 6910205 "Interpreting Functions Utilizing A Hybrid Of Virtual And Native Machine Instructions", according to Groklaw.
It will then get an extra $27M-$37M USD for the copyright infringement. Overall this will all stack up to about $40M USD.
Android may get off in the Oracle lawsuit surprisingly easy [Image Source: Android and Me]
Here's where it get's a bit confusing -- Oracle has already withdrew its claim on the '205 patent, as it was invalidated by the U.S. Patent and Trademark Office. But Google is now also being sued for another second patent -- U.S. Patent No. 6,061,520 "Method and system for performing static initialization". This won't likely lead to any big shift in the settlement amount, but it means there may be a mistake in some of the court documents from Google/Judge Alsup, printed by Groklaw, which refer to the '205 (invalid) patent, when in fact it appears they mean the '520 (asserted) patent.
What does all this mean? Google will likely pay less that $100M USD in damages, a small slap to the world's largest smartphone OS maker. It will likely have to pay a bit of ongoing royalties, but with only 2 asserted patents, it's unclear whether that sum will be truly that onerous versus the 6, highly overvalued patents that Oracle originally hoped to beat money out of Google with.
Source: Groklaw
"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates
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