Oracle and Google will be back in court Thursday for what's likely to be a short but significant hearing in the legal battle over Google's alleged patent infringement in Android.
The purpose of the hearing ostensibly is to decide whether an Oracle damages expert should be excluded from the case, as Google has urged. The expert, a Boston University economics professor, has estimated that Google should pay Oracle billions of dollars in damages. Google says his methodology is flawed and filed a motion to have his opinions excluded from trial.
While two legal experts said they doubt Google's motion will prevail, more interesting are the questions that Judge William Alsup has said he plans to ask at Thursday's hearing. One is whether Google implicitly acknowledged in a court filing last month that it infringed Oracle's patents, something Alsup said "appears possible."
Lawyers for the two sides may also argue about whether the case should be stayed pending reexamination of the patents at issue. Oracle said in a court filing Wednesday that the trial, scheduled for Oct. 31, should go ahead. Google said waiting for the patent office's final rulings would narrow the focus of the case. Google also hinted for the first time that it might be open to a settlement.
Oracle sued Google last August, saying its Android operating system violates seven Java-related patents that Oracle acquired when it bought Sun Microsystems. It's one of several legal challenges to Android that might force Google to start charging tablet and smartphone makers a license fee for use of the software.
The expert opinion, from Boston University professor Iain Cockburn, has not been made public. Google has said Cockburn calculates its damages at an "extraordinarily broad" range of US$1.4 billion to $6.1 billion. Oracle says the figure is precisely $2.6 billion, mostly for what it claims Google would have had to pay Sun to license the patents legally.
In its motion to have Cockburn removed, Google said he ignored the fact that it tried to negotiate a Java license with Sun several years ago. There is "no need to speculate" about the cost of a license because Google and Sun "actually engaged in negotiations regarding a license to the entirety of Java," Google's lawyers wrote.
Alsup took that as a sign that Google may have knowingly infringed Oracle's patents, and asked it to explain itself at Thursday's hearing.
"[I]t appears possible that early on Google recognized that it would infringe patents protecting at least part of Java, entered into negotiations with Sun to obtain a license for use in Android, then abandoned the negotiations as too expensive, and pushed home with Android without any license at all," he wrote last week. "How accurate is this scenario? Does Google acknowledge that Android infringes at least some of the claims if valid?"
Google is likely to respond with one of two arguments, said David Mixon, a patent lawyer with Bradley Arant Boult Cummings who has been following the case. It could say it never expected to infringe Sun's patents and tried to negotiate the license merely as a precaution, to avoid potential litigation costs down the road. Or it could say that having failed to negotiate a license, Google changed its plans and designed Android in a way that it does not infringe the patents.
Either way, it's a serious question for Google. Damages can be automatically tripled if a defendant is found guilty of willful infringement. "The question of willful conduct is a serious risk factor for Google here," said Florian Mueller, author of the FOSS Patents blog.
The two sides laid out their positions in a court filing Wednesday about whether the case should be put on hold. The U.S. Patent and Trademark Office has issued "office actions" rejecting Oracle's claims related to four of its patents and upholding a fifth. But the actions are preliminary and should not be viewed as a strong indicator of how the PTO ultimately will rule, Mueller said.
Both Mueller and Mixon expect Alsup to stay the case pending the outcome of the reexaminations. "It would be very unusual for a patent infringement case to continue while patents are subject to reexamination," Mixon said.
If Oracle were to win at trial and the patents later be deemed invalid, it would effectively have wasted the court's time. Oracle has indicated that it's willing to take that chance and push on with the case, but ultimately the judge will decide whether to stay some or all of its patent claims. Oracle also noted Wednesday that it sued Google for copyright infringement in addition to patent infringement, and that its copyright claims are unaffected by the reexaminations.
Both Mueller and Mixon said the judge may be trying to push the two sides toward a settlement. "The possibility of a stay is the judge's most important lever to pressure Oracle to reduce its demands so as to enable a settlement, or at least a more focused trial," Mueller said.
At the same time, implying that Google admitted to willful infringement may increase the pressure on Google to make a deal, he said. "Even though Oracle's expert obviously calculated rather high damages amounts, there's no question that this case is about potentially huge damages, and if Google is found to have infringed willfully, those can be tripled," Mueller said..
Other legal challenges to Android increase the pressure on Google, Mixon said. Apple has filed a patent infringement lawsuit against Samsung over phones running Android, and Microsoft has secured patent deals with HTC and others over their use of Android in phones. In addition, a consortium that includes Microsoft and Apple beat Google in an auction to buy thousands of wireless-related patents from Nortel Networks.
Google was using the auction to "play catch-up with other big tech companies in the wireless field," Mixon said. "I imagine they're feeling a lot of pressure right now."
Both Google and Oracle declined to comment for this article.
A settlement might not be easy to reach. Android has become successful in part because it is free for phone makers to use, and Google would be reluctant to pay Oracle a royalty that requires it to charge for Android. At the same time, Oracle has an incentive not to price Android out of the market.
"It's a delicate balance for them. They want to maximize the amount of royalties they can get from Android, but they don't want to put it at such a competitive disadvantage that phone makers go find a competing alternative," Mixon said.
Thursday's hearing at the U.S. District Court in San Francisco will be a short one, Alsup told the parties this week, because he is in the midst of a criminal trial. So there will be a lot to pack in. "Counsel should plan to address only critical points," he told the lawyers.
Sign up for CIO Asia eNewsletters.