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IP/Entertainment Case Law Updates

Google LLC v. Oracle America, Inc.

U.S. Supreme Court rules that Google’s copying of 11,500 lines of code from Oracle’s Java SE program constituted fair use.

Oracle Corp. filed suit against Google Inc. in 2010, alleging that Google’s Android software for mobile devices infringed Java copyrights that Oracle acquired when it bought Sun Microsystems Inc. earlier that year. In creating Android, Google copied the “declaring code” from Oracle’s Application Programming Interface (API), a tool that “allow[s] programmers to use … prewritten code to build certain functions into their own programs, rather than write their own code to perform those functions so that programmers fluent in Java could more easily use the new system from scratch.”
 
In response, Google argued that the declaring code it had used from Oracle’s APIs was not copyrightable. Though the district court and two juries agreed with Google, the Federal Circuit twice reversed those judgments. The Supreme Court granted certiorari and agreed to review the Federal Circuit’s rulings concerning both copyrightability and fair use.
 
In a 6 – 2 decision written by Justice Breyer, in which Chief Justice Roberts and Justices Sotomayor, Kagan, Gorsuch and Kavanaugh joined, the Court reversed the Federal Circuit and held that Google’s use of Oracle’s code did constitute fair use. The Court elected not to consider the question of copyrightability, since a finding of fair use “dispense[d] with” Oracle’s claims, and “[g]iven the rapidly changing technological, economic, and business-related circumstances,” the court “believe[d it] should not answer more than is necessary to resolve the parties’ dispute.” The Court “assume[d], but purely for argument’s sake,” that the declaring code at issue was entirely copyrightable and addressed only the question of fair use.
 
As an initial matter, the Court addressed Google’s argument that fair use is a question for a jury to decide—the jury having decided in Google’s favor—and the court’s review should therefore be limited to determining whether “substantial evidence” justified the jury’s decision. The Court rejected Google’s argument, instead agreeing with the Federal Circuit that fair use is a mixed question of fact and law: While reviewing courts should defer to the jury’s findings of underlying facts, the ultimate question of whether those facts demonstrate a fair use is a question of law appropriate for de novo review.
 
Turning to the Section 107 fair use factors, the Court began with the second factor: the nature of the copyrighted work. Although it elected not to rule on copyrightability, the Court did address copyrightability in discussing this factor. Oracle’s API has three essential parts: the “implementing code,” which actually instructs the computer on the steps to follow to carry out each task; a particular command, known as a “method call,” which the API associates with the calling up of each task; and the declaring code, which associates the writing of a method call with particular “places” in the computer that contain the needed implementing code. Oracle alleged infringement of the declaring code. The Court reasoned that because of this, declaring code is “inextricably bound together with a general system, the division of computing tasks” and “the idea of organizing tasks” that are not copyrightable. The Court also focused on the fact that the declaring code was created with the goal of finding names that would be intuitively easy to remember and so, unlike other computer programs, the value of the declaring code derives from computer programmers—who invest their own time and effort to learn the API’s system—not copyright holders. The Court also commented that the value of the declaring code lies in its efforts to encourage programmers to learn and use the other parts of the API, such as the implementing code, which Google did not copy. For these reasons, the Court concluded that the declaring code is, “if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright.” Accordingly, the second fair use factor weighed in favor of fair use.
 
The Court next considered the first fair use factor: the purpose and character of the use. Beginning its discussion by acknowledging that Google did copy portions of Oracle’s API for precisely the same reason that it was created—to enable programmers to call up implementing programs that would accomplish particular tasks—the Court reasoned that since virtually any unauthorized use of a copyrighted computer program would do the same, to determine whether a use of a computer program is “transformative,” courts must go further and examine the copying’s more specifically described “purpose[s]” and “character.” As to the specific purposes and character of Google’s use, the Court explained that Google was actually reimplementing the code: Google’s use seeks to create new products, to expand the use and usefulness of Android-based smartphones, and to offer programmers a highly creative and innovative tool for a smartphone environment. Accordingly, the Court determined that Google’s use “was consistent with that creative ‘progress’ that is the basic constitutional objective of copyright itself,” and the first fair use factor weighs in favor of fair use.
 
Before turning to the third fair use factor, the Court addressed two additional considerations under the first fair use factor: commerciality and good faith. As to commerciality, the Court concluded that although Google’s use was clearly commercial in nature, this does not necessarily weigh against a finding of fair use (even though a finding that copying was not commercial in nature weighs in favor of fair use). As to bad faith, the Court found the “skepticism” it expressed in its 1994 decision in Campbell v. Acuff-Rose Music, Inc., concerning whether bad faith has any role in a fair use analysis, “justifiable.” Although the Court did not conclude whether good faith is a helpful inquiry as a general matter, it noted that bad faith was not determinative in this context given the strength of the other factors pointing toward fair use and the jury finding in Google’s favor.
 
The Court next addressed the third fair use factor: the amount or substantiality of the portion used. The court concluded that due to the nature of the code copied and the purpose for which Google copied it, the best way to consider amount and substantiality in this context was to consider the several million lines of Oracle’s API code that Google did not copy, which was substantial. The Court also noted that this factor generally weighs in favor of fair use where, as was the case, the amount of copying was tethered to a valid, and transformative, purpose. The Court rejected the Federal Circuit’s conclusion that Google could have achieved its Java-compatibility objective by copying only the 170 lines of code that are “necessary to write in the Java language,” explaining that Google’s goal was to permit programmers to make use of their knowledge and experience using Oracle’s API when they wrote new programs for smartphones with the Android platform. This objective would not have been achieved even if Google could have created different code. The court wrote that “the declaring code was the key that [Google] needed to unlock the programmers’ creative energies. And it needed those energies to create and to improve its own innovative Android systems.” Thus, the court held that this factor weighed in favor of fair use.
 
Finally, the Court considered the fourth fair use factor: the effect of the use on the potential market for or value of the work. This factor is more complex for computer programs such as Oracle’s API, since the Court must consider not only potential loss of revenue, but also the source of the loss, in addition to the public benefits of the copying in this particular context. The Court concluded that due to the uncertain nature of Oracle’s ability to compete in Android’s market—the sources of its lost revenue having much to do with third parties’ investment in its Java programs, as opposed to the Java API—and the risk of creativity-related harms to the public if fair use was not found, this factor also weighed in favor of fair use.
 
Justice Thomas, joined by Justice Alito, dissented from the majority’s opinion, criticizing the majority for bypassing the issue of copyrightability, “disregard[ing] half the relevant statutory text and distort[ing] its fair-use analysis.” The dissent concluded that Oracle’s declaring code fits squarely within the Copyright Act’s definition of a “computer program” as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.” Congress rejected categorical distinctions between declaring and implementing code, and by not addressing copyrightability, the dissent argued, the majority overlooked this fact in analyzing fair use by distinguishing these two types of code. Justice Thomas concluded that the “result of this distorting analysis is an opinion that makes it difficult to imagine any circumstance in which declaring code will remain protected by copyright.” The dissent went on to conduct its own analysis of each fair use factor, without distinguishing between declaring and implementing code. In particular, with respect to the first fair use factor, the dissent criticized the majority’s conclusion that a computer code that will simply help others “create new products” is transformative for purposes of the fair use analysis, asserting that this “new definition eviscerates copyright,” and concluding that this first fair use factor weighed decidedly against Google. The dissent asserted that the third and fourth factors also weighed against fair use, and that the sole factor that could possibly favor Google, the nature of the copyrighted work, was insufficient to support a finding of fair use.
 
Summary by Linna Chen and Nathalie Russell
 
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