Oracle's win over Google in Android copyright case can see sea change in global software industry

SAN FRANCISCO - Google could owe Oracle billions of dollars for using the latter's open-source Java programming code while developing its Android mobile platform, a US appeals court said Tuesday, in a ruling that can significantly impact the software industry worldwide.

The ruling is the latest development in an eight-year copyright feud between the two software giants.

Oracle first filed its case against Google in 2010, claiming Android infringes two of Oracle's Java software patents.

In 2012, a jury determined that Java does not deserve protection under copyright law. But two years later, an appeals court overturned the ruling, raising the question of whether Google's use of Oracle's Java application programming interfaces (APIs) violated the copyright law.

A jury determined in 2016 that Google's actions were legal under the copyright law's fair use doctrine, which allows the free use of copyrighted materials under specific circumstances. Oracle appealed the decision, and finally, judges took its side on Tuesday.

"There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform," a three-judge federal circuit panel in Washington ruled.

"The fact that Android is free of charge does not make Google's use of the Java API packages noncommercial," it said, noting that Android has generated more than $42 billion in revenue from advertising.

Oracle said in a statement on Tuesday that the recent "decision protects creators and consumers." Google said it is weighing its options. It could appeal to the full slate of judges on the court.

"We are disappointed the court reversed the jury finding that Java is open and free for everyone," a Google spokesperson said in a statement. "This type of ruling will make apps and online services more expensive for users. We are considering our options."

Another court will determine how much Google owes Oracle in damages.

As of 2016, Oracle was seeking about $9 billion from Google, though that number could grow.

The dispute could have far-reaching implications for the entire software industry. Many other companies rely on open-source software to develop their own platforms.

"The decision is going to create a significant shift in how software is developed worldwide," Christopher Carani, a partner with McAndrews, Held & Malloy and a professor at Northwestern's law school, told CNN.

"It really means that copyright in this context has teeth," he said. "Sometimes free is not really free."

Lawyer March Schonfeld of Burns & Levinson in Boston told Bloomberg that it's a momentous decision on the issue of fair use.

"It is very, very important for the software industry. I think it's going to go to the Supreme Court because the Federal Circuit has made a very controversial decision," Schonfeld said.