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Way back in 2007, when Sun Microsystems was still a stand-alone business and Android a mere glimmer in Google's (Nasdaq: GOOG  ) eye, Sun had a problem with the way Android built on the Java software platform.

The problem was fragmentation: Android doesn't run bog-standard Java code, but instead translates programs written for that platform into its own format, which is then executed by the Dalvik virtual machine that is the cold, robotic heart of any Android gadget. At the time, Google waved away the objections like Obi-Wan waving his droids through a storm trooper checkpoint: Android is part of the solution to Java fragmentation, not the problem -- Sun should love Google for replacing Java with its own far-reaching standard. Sun never made any official stink about it again, even though Google's reaction smelled like the insides of a dead tauntaun.

Until now, that is. Sun parent Oracle (Nasdaq: ORCL  ) is now suing Google for patent infringement, claiming that: "In developing Android, Google knowingly, directly and repeatedly infringed Oracle's Java-related intellectual property." Oracle is looking for treble damages ("triple" in legalese, not the other half of "treble and bass") and wants to stop Google from shipping, selling, or promoting Android. That would certainly hurt Google.

This lawsuit was a bit of a shock to me, because I assumed that Google had made the problem go away by some sort of proactive action. But the legal complaint states in no uncertain terms that Google lacks the licenses required to use Java in this way.

This case echoes of a long-running action Sun carried out against Microsoft (Nasdaq: MSFT  ) last decade over strikingly similar problems. Mr. Softy ended up paying $1 billion in damages for that one, and Oracle would probably love a settlement of that scale again.

I'm guessing here, but it would make sense for Google to settle this affair quickly and quietly -- pay up a license fee for the right to use and modify the Java platform and then go on with business as usual. There is an alternative development framework available for Android programmers, based on the much more bare-metal C/C++ programming language. Going to that model exclusively would require hordes of Android developers to learn a new and arguably more difficult language. That would be a serious roadblock in the race to outgrow the Apple (Nasdaq: AAPL  ) iPhone store in application quantity.

Java has been released under an open-source license after all -- excluding the mobile version. Oracle's stock is falling harder than Google's today. Are investors worried that Oracle alienates its own worldwide developer base here by raising thorny and nearly forgotten licensing issues? Discuss in the comments box below.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Google and Microsoft are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google and Oracle. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

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  • Report this Comment On August 13, 2010, at 2:47 PM, bobbybress wrote:

    I doubt ORCL would be pleased with a MSFT like settlement. If their lawsuit can be won, it is in ORCL's power to derail GOOG's foremost growth engine now that search is both a maturing and more competitive market. Schmidt, who is known for understating revenue growth, forecast the Android platform to be a 10 billion dollar a year business for Google. And if the oracle of ORCL was right in his years past declarationthat the pc will inevitably be replaced by cloud computing, as more and more appears to be the future, then owning the dominent smart phone platform may be the future equivalent of owning MSFT's windows OS from the beginning of the PC boom. I believe this is a far higher stakes game of poker than you peceive it to be, a game GOOG can't lose and remain relevant in the tech landscape ten years from now, and one Larry Ellison won't let them win without exacting a meaningful pound of flesh, perhaps even one as large as what he paid for Sun. GOOG has to settle this in a hurry while the longer ORCL lets this dispute run, the greater the cost for GOOG both fixed, if they lose and have to disembe and recreate android using free code, and of unknown but significant future value, if they lose the edge in becoming the dominant smart phone OS they appeared to have until yesterday. All the while, any software company thinking of making an android app has to think twice. In the short run, this bodes well for both Nokia's simbian OS and Apple's Phone/Pod/Pad OS. I don't see the hit to Google share price coming today due to the smoothing effect of options expiration but Monday should be a telling day for the GOOG, both for how this challendge is priced into their equity and by how the publicly answer ORCL's lawsuit.

  • Report this Comment On August 13, 2010, at 4:48 PM, Henry3Dogg wrote:

    Oracle may choose to protect Java by not allowing a deviant version to exist at any price.

    Or perhaps they will sell Java to a consortium of Nokia, Apple and RIM.

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