3 Takeaways from Oracle's Big Win in the Federal Circuit over Google...
IP decisions don't get bigger than the one handed down by the Federal Circuit yesterday in the long-running dispute between Oracle and Google over Google's use of Java code in developing Android. The case will continue -- with a damages trial at a time TBD, once the appeals of this appeals court decision are exhausted -- and will continue garnering significant interest from IP lawyers, software companies, and investors. Nothing like the prospect of a multi-billion dollar damages award to attract eyeballs. Now that Google's key defense -- fair use -- has been rejected by the CAFC, it is a good time to consider 3 immediate takeaways from this important decision.
1) Jury Verdicts Mean Nothing? -- This opinion provides important insight into how the CAFC views the role of juries in deciding thorny mixed-fact and legal questions. Fair use in copyright cases is one such issue, and for patent lawyers, obviousness is a critical other example. Remember when Google benefited from the CAFC throwing out a jury finding of non-obviousness in the Vringo case? Now the shoe is on the other foot, with the CAFC throwing out the jury finding of fair use here. The common thread? The CAFC will reserve ultimate judgment on these complex issues, using plenary review, and giving no deference to non-factual jury findings as to the ultimate legal determinations. Hence, winners at trial on these issues will need to understand that they are facing an effective retrial on appeal, and plan accordingly. With such uncertainty built into validity questions in patent cases, maybe IPR's are a better mechanism for deciding validity issues after all? Google probably wishes that there was the copyright equivalent of the PTAB for them to float their fair use arguments in front of as well.
2) Forum Shopping? - There has been talk that Oracle benefited from a twisty form of "forum shopping" to get this result, with the CAFC applying 9th Circuit law on the copyright issues, and only having jurisdiction because of the defunct patent claims that were originally included in the case. The idea that this was somehow a calculated advantage achieved by Oracle is dubious. First, its pure speculation to assume that the CAFC and 9th Circuit would have reached different results here. Second, Google has long enjoyed an extremely favorable record in the CAFC, e.g. the Vringo case mentioned above. In fact, prior to this decision, the idea that Google would lose anything at the CAFC was news. Better to save the forum shopping discussion for a more clear-cut case of it in our view.
3) Free to Infringe? - Finally, Google and its academic acolytes have long been on the record arguing that innovation is enhanced when the ability to efficiently infringe is preserved. In this case, Google argued that its use of the Java code was not "commercial" since Android is given away free. The CAFC found this argument "without merit" - undercutting one of the key bases for Google's "we are the good guys" argument when it comes to accusations of infringement against them. Tellingly, Android may be free, but Google sure pays Microsoft a lot of money to license patents around Android. Maybe what that fact, and this Oracle case, really proves is that if you want to best Joe Louis that is Google in a heavyweight IP boxing match, make sure you have George Foreman or Mike Tyson in your corner. Up and comers need not apply...at least until we see one of them knock out the champ by surviving the IPR and CAFC gauntlet in a patent case.