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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 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.

<rant>

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.

</rant>


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.


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