Please ensure Javascript is enabled for purposes of website accessibility

The $9 Billion Verdict: Alphabet Beats Oracle Again (but They Aren't Done Yet)

By Anders Bylund - May 28, 2016 at 1:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The database giant wanted to grab up to $9 billion of Google's Android revenues, but another jury disagreed. Next up: another appeal.

Oracle (ORCL 4.54%) wanted to hit Alphabet (GOOG 5.20%) (GOOGL 5.11%) with as much as $9 billion in fines and damages, because Alphabet's Google group used core concepts from Oracle's Java programming language. The database giant thought it deserved a cut of Android's success.

It's a long-running saga, and probably nowhere near completion. But another verdict is in, and Oracle is walking away empty-handed this time.

After two weeks of evidence and witness presentations, followed by three days of jury deliberations, a federal jury in the Northern District of California handed down a unanimous "not guilty" verdict on Thursday. More specifically, the jury had been asked whether Google's use of Java programming methods in Android falls under the "fair use" portion of copyright law, and the jurors agreed that it does.

This was the second jury trial in this legal proceeding. The first trial ended in Oracle's favor by establishing that so-called API concepts could be copyrighted, but only after a verdict in Google's favor was overturned by a Court of Appeals decision. The Supreme Court was asked to take a look, but turned the case away.

So here we are, at what likely will become the first leg in another multi-year journey. The second trial started the same way as the first, which is a clear victory for Google. Oracle is sure to appeal this verdict, and off we go to the Court of Appeals again.

Who should worry about this court case, anyhow?

Interest in this case is not strictly limited to Oracle and Alphabet/Google/Android. The final outcome here could redraw the limits of how software development is done, especially when it involves concepts of public domain and open source. The Java platform's code has been shared under an open-source license, and parallel versions of the language have been developed by organizations and companies not related to Oracle or original inventor Sun Microsystems.

Oracle argued that none of that mattered because the company held copyright to the programming interfaces used by Java programmers everywhere. Google disagreed, noting that the final verdict was good news for the software development world, in general.

"Today's verdict that Android makes fair use of Java APIs represents a win for the Android ecosystem, for the Java programming community, and for software developers who rely on open and free programming languages to build innovative consumer products," a Google spokesperson said to reporters from Ars Technica.

Red Hat (RHT) CEO Jim Whitehurst, for one, would like to see the end of this long-running case. Oracle's interpretation of programming interface copyrights is putting a cloud of uncertainty over the entire software-development market, with particularly heavy thunderclouds over the open-source community, where Red Hat is a leading name.

"The ambiguity makes it very, very difficult to understand what you can and can't use, and so hopefully we will get some answers out of this," he said in a phone interview with the Fool earlier this week. "Oracle's view is certainly bad for Java, in general."

What's next?

Alphabet is off the hook for now, but it's only a matter of time before Oracle takes this conflict to the next level of legal analysis. We might still get a Supreme Court verdict out of this, but that endpoint would still be years away.

Pull up a chair, grab some popcorn. I'll bring the salt and soda.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
$2,359.50 (5.11%) $114.66
Oracle Corporation Stock Quote
Oracle Corporation
$70.70 (4.54%) $3.07
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,370.76 (5.20%) $117.07
Red Hat, Inc. Stock Quote
Red Hat, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.