Google v. Oracle: Implications for Fair Use

Doctrine, Developing, Copying and Licensing

Software API

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

The audio portion of the conference may be accessed via the telephone or by using your computer's

speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 1.

TUESDAY, JUNE 15, 2021

Presenting a live 90-minute webinar with interactive Q&A

Paul H. Arne, Partner, Morris Manning & Martin, LLP, Atlanta

David H. Herrington, Partner, Cleary Gottlieb Steen & Hamilton LLP, New York

Tips for Optimal Quality

Sound Quality

If you are listening via your computer speakers, please note that the quality

of your sound will vary depending on the speed and quality of your internet

connection.

If the sound quality is not satisfactory, you may listen via the phone: dial

1-877-447-0294 and enter your Conference ID and PIN when prompted.

Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately

so we can address the problem.

If you dialed in and have any difficulties during the call, press *0 for assistance.

Viewing Quality

To maximize your screen, press the ‘Full Screen’ symbol located on the bottom

right of the slides. To exit full screen, press the Esc button.

FOR LIVE EVENT ONLY

Continuing Education Credits

In order for us to process your continuing education credit, you must confirm your

participation in this webinar by completing and submitting the Attendance

Affirmation/Evaluation after the webinar.

A link to the Attendance Affirmation/Evaluation will be in the thank you email

that you will receive immediately following the program.

For additional information about continuing education, call us at 1-800-926-7926

ext. 2.

FOR LIVE EVENT ONLY

Program Materials

If you have not printed the conference materials for this program, please

complete the following steps:

• Click on the link to the PDF of the slides for today’s program, which is located

to the right of the slides, just above the Q&A box.

• The PDF will open a separate tab/window. Print the slides by clicking on the

printer icon.

FOR LIVE EVENT ONLY

Google v. Oracle: Implications for Fair Use Doctrine, Developing, Copying and Licensing

Software API

Paul H. ArneMorris, Manning & Martin, L.L.P.

parne@mmmlaw.com

David H. HerringtonCleary Gottlieb Steen & Hamilton LLP

dherrington@cgsh.com

Agenda

I Copyright as Applied to Software 3Idea/ ExpressionFair Use

II What is an API? 10

III Google v. Oracle 12

IV Hypotheticals 19

V Conclusions 27

2

Copyright as Applied to Software

3

Copyright Does Not Protect An Idea, Process, System Or Method

Baker v. Selden, 101 U.S. 99 (1879)— Copying grid used for bookkeeping method described in a

book was not copyright infringement because copyright laws protect the specific expression of an idea, not the idea itself.

— “ In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”

Section 102(b) of the Copyright Act

4

Congress Decides To Extend Copyright Protection To Computer Programs

5

—As part of the work leading to the Copyright Act of 1976, Congress asked: Should copyright extend to computer programs?

—Establishes National Commission on New Technological Uses of Copyrighted Works (“CONTU”) to address the question. CONTU says yes.

—Computer programs “are prepared by the careful fixation of words, phrases, numbers, and other symbols in various media.” CONTU Report at 10.

—“That the word writing in the Constitution has broad and dynamic meaning may be seen in the nature of works that have been found constitutionally copyrightable.” Id. at 14

—“[S]ome form of protection is necessary to encourage the creation and broad distribution of computer programs in a competitive market.” Id. at 11.

—Copyright Act amended to expressly provide that a “computer program”—which it defines as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result”—can be copyrighted. 17 U.S.C. § 101.

5

Tension Because Computer Programs Are Inherently Functional

6

“Section 102(b) is intended, among other things, to make clear that the expression adopted by the programmer is the copyrightable element in a computer program, and that the actual processes or methods embodied in the program are not within the scope of the copyright law.” CONTU Report at 19.

“The way copyright affects games and game-playing is closely analogous: one may not adopt and republish or redistribute copyrighted game rules, but the copyright owner has no power to prevent others from playing the game.” Id. at 20. Further, “copyright leads to the result that anyone is free to make a computer carry out any unpatented process, but not to misappropriate another’s writing to do so.” Id.

“The fact that computer programs are primarily functional makes it difficult to apply traditional copyright concepts.” Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183, 1208 (2021).

“[T]he fair use of a copyrighted work, … for purposes such as criticism,

comment, news reporting, teaching …, scholarship, or research, is not an

infringement of copyright.”

FAIR USE, § 107

7

Fair Use: Factors

[T]HE FACTORS TO BE CONSIDERED SHALL INCLUDE:

the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;1

the nature of the copyrighted work [“transformative use”];2

the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and3

the effect of the use upon the potential market for or value of the copyrighted work.4

8

“[E]very commercial use of copyrighted material is presumptively an unfair

exploitation of the monopoly privilege that belongs to the owner of the

copyright.”

COMMERCIAL USE

Sony Corp. v. Universal City Studios, Inc., 646 U.S. 417, 451 (1984).

9

What’s an API?

10

APIK LNameLocationCommandsCommand OptionsSyntax of InputsSyntax of Outputs

10

Google v. Oracle

1111

— Java SE is a popular open-source programming platform.

— Google’s Android platform supports applications written in Oracle’s Java programming language.

Google v. Oracle: Facts

12

3%

97%

When Google set out to design its Android operating system for smartphones, it initially sought to license Java SE from Sun, including the Sun Java API. But these negotiations fell apart, and Google ultimately developed its own platform, which would be compatible with legacy Java applications.

To achieve interoperability, Google copied ~11,500 lines of code, comprising 37 Java shorthand commands (APIs), replicating the structure, names and functions (3% of the code), but independently re-implementing the methods (97% of the code).

Declaring CodeNot Copied

In 2010, Oracle America, Inc. (“Oracle”) purchased ownership rights to Java and brought suit against Google claiming Google infringed its copyright by copying the “structure, sequence and organization” of the API packages.

12

Google v. Oracle: Case History

13

Found APIs uncopyrightable under Section 102(b) as a “system or method of operation,” relying heavily on Lotus v. Borland (menu commands are uncopyrightable methods, even if the organization of the menus incorporate some expression).

DISTRICT COURT

2012

Reversed and held that (1) Copyright is “a low bar” that only requires a work be original and expressive in the sense that “the author had multiple ways to express the underlying idea” and (2) Section 102(b) does not extinguish protection “merely because [an] expression is embodied in a method of operation.”

FEDERAL CIRCUIT

2014

Jury found that Google’s use of declaring code qualified as fair use.DISTRICT

COURT2016

Reversed and held that “[t]here 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.”

FEDERAL CIRCUIT

2018

13

Google v. Oracle: Issue

14

Supreme Court granted cert to consider (1) whether copyright extends to APIs and (2) whether Google’s use was a fair use.

SUPREME COURT

2019

AMICI

FOR

— Microsoft— IBM and Red Hat— Mozilla

FOR

— Motion Picture Association— Recording Industry Association

of America— Dolby Laboratories

— Solicitor General supports Oracle

Google v. Oracle: Decision

Copyrightability question unresolved — Given the rapidly changing technological, economic, and

business-related circumstances, we believe we should not answer more than is necessary to resolve the parties’ dispute. We shall assume, but purely for argument’s sake, that the entire Sun Java API falls within the definition of that which can be copyrighted.

Disappointment for those eagerly awaiting a ruling setting out the standards for assessing whether particular forms of software qualify for copyright protection—and in particular an answer to the question of whether APIs are entitled to protection.

15

Google v. Oracle: Decision (cont’d.)

6-2 majority ruledin favor of fair use

— “[Fair use] can help to distinguish among technologies. It can distinguish between expressive and functional features of computer code where those features are mixed. It can focus on the legitimate need to provide incentives to produce copyrighted material while examining the extent to which yet further protection creates unrelated or illegitimate harms in other markets or to the development of other products. In a word, it can carry out its basic purpose of providing a context-based check that can help to keep a copyright monopoly within its lawful bounds.”

16

Google v. Oracle: Decision (cont’d.)

17

Fair use is ultimately a legal question

Fair use factors:— Purpose and character of the use: APIs/ declaring code distinct from other computer programs because is inherently bound together with uncopyrightable ideas (general task division and organization) and new creative expression (Android’s implementing code),” and “its value lies in its efforts to encourage programmers to learn and to use that system so that they will use (and continue to use) Sun-related implementing programs that Google did not copy.”

— Nature of the copyrighted work: Google copied no more than the necessary portions of the Sun Java API in order to “create a new platform,” the Android platform, which is consistent with the “creative ‘progress’ that is the basic constitutional objective of copyright itself.”

— Amount and substantiality of the portion used: the 11,500 lines that were copied amounted to only 0.4 percent of the total code in the Sun Java API

— Effect on the potential market or value: minimal because markets for smartphones and computers are different and value derived from new users being attracted to a program because of its expressive qualities is distinguishable from a program this is valuable because users are accustomed to it.

Fair use factors:

17

18

Two EHR systems can’t talk to each other. One EHR provider uses API of the other EHR provider to create

software to software connection.

HYPOTHETICAL #1

EHR Connection

19

“Copyright on largely functional elements of software that [have]

become an industry standard gives a copyright holder anti-competitive power”

HYPOTHETICAL #1

Quoting Amici Curiae 7

20

“Google copied … them because programmers had already learned

to work with the Sun Java API’s system….”

HYPOTHETICAL #1

21

“We have no reason to believe that the Copyright Act seeks to protect third

parties’ [programmer’s] investment in learning how to operate a created work.”

HYPOTHETICAL #1

22

“Linking a GPL covered work statically or dynamically with other modules is making a combined work based on the

GPL covered work. Thus, the terms and conditions of the GNU General Public License cover the whole combination.”

HYPOTHETICAL #2

Scope of OSS

23

FinTech Startup wants to provide services to customers; needs data

from bank account.

Can FinTech use bank’s APIs without permission?

HYPOTHETICAL #3

Getting Data from Bank

24

Healthcare Technology wants to provide additional information at point of care. Can it use an EHR provider’s API to

determine the program’s state, i.e., when a doctor is meeting with a patient?

HYPOTHETICAL #4

Determining State of Other Software

25

“To the extent that Google used parts of the Sun Java API to create a new

platform that could be readily used by programmers, its use was consistent with that creative ‘progress’ that is the basic constitutional objective

of copyright itself.”

HYPOTHETICAL #4

Conclusions

What happened to idea/expression?

Did Google v. Oracle change the fair use defense?

How has the enforcement of rights in copyright changed?

1426

Idea/Expression Changed?

27

“These limitations, along with the need to ‘fix’ a work in a ‘tangible medium of

expression,’ have often led courts to say, in shorthand form, that, unlike patents,

which protect novel and useful ideas, copyrights protect ‘expression’ but not the ‘ideas’ that lie behind it.”

Did Fair Use Change?

28

“Unlike many other programs, [the API’s] value in significant part derives from the

value that those who do not hold copyrights, namely, computer programmers, invest

of their own time and effort to learn the API’s system.”

Enforcement

29

“[Fair use] might more closely tailor the limits on copyright protection to the reasons for limiting that

protection; but it would entail a host of administrative problems that would cause cost and delay, and would

also reduce the ability of the industry to predict outcomes...

[T]the majority's result persuades me and its formulationis as good, if not better, than any other….”

Alternatives To Copyright for Software

30

Licensing/ contractual protections

Patent

Trade Secret

31

Paul H. ArneMorris, Manning & Martin, L.L.P.3343 Peachtree Rd.1600 Atlanta Financial CenterAtlanta, GA 30326parne@mmmlaw.comwww.mmmlaw.com

[BD to add]David H. HerringtonCleary Gottlieb Steen & Hamilton LLPOne Liberty PlazaNew York, NY 10006dherrington@cgsh.comwww.cgsh.com