How long will the Larry & Larry Show run?
Oracle (Nasdaq: ORCL) and Google (Nasdaq: GOOG) CEOs Larry Ellison and Larry Page have less time to run their respective businesses these days. Both companies first tried to send lower-ranking executives to a series of court-ordered settlement talks, but to no avail. District Court judge William Alsup suggested in no uncertain terms that only the best was good enough.
So the two tech-titan leaders duly attended a first settlement talk yesterday, trying to untangle a hairy mess of an intellectual property case. Oracle claims that Big G had no right to model the software development tools for Android on Java, which the database giant acquired along with the rest of Sun Microsystems last year.
Google believes that using Java tools for Android development is perfectly fine, since many of the components have been published under a royalty-free open source license. Oracle disagrees with a vengeance, and asks for billions of dollars in back damages, plus a royalty on future Android sales. It's a high-stakes game of chicken, and arguably the reason why Oracle paid $7 billion for Sun to begin with.
So it's no surprise that The Wall Street Journal reported an unproductive first day of settlement talks. The issues are too large and too thorny to be hammered out in a couple of hours, even with two CEOs at the table.
Big G has armed itself with a few thousand patents from IBM (NYSE: IBM), just in case this lawsuit goes to trial. Many of the Big Blue patents acquired seem to deal with server technology and system software, which would come in handy for countersuits against a very large software house with a newfound interest in Sun's server hardware. These weapons sure seem more appropriate for the Oracle battle than anything Motorola Mobility (NYSE: MMI) might bring to the table.
It's also worth noting that Google chairman and former CEO Eric Schmidt played a central part in creating Java to begin with, as CEO of Sun in a former life. You'd think the guy might have some insights into the software, and at least early versions of its licensing scheme. So Google isn't completely defenseless against Oracle's assault.
Still, there are no sure things in lawsuits except for death, taxes, and lawyers getting rich. If you're invested in Google, this suit is a dangerous game. For Oracle, you're looking at potentially huge gains if the company gets a finger into the only smartphone platform that has truly challenged the Apple (Nasdaq: AAPL) iPhone so far. If you're Apple, you might be hoping that onerous licensing costs will slow down Google's momentum.
Either way, it's definitely in your best interest to keep a close eye on the proceedings. Add Google to your Foolish watchlist by clicking here, and add Oracle right here to stay updated on all news as settlement talks progress.
