Thursday, March 29, 2012

Oracle v. Google - Joint Statement Reveals A Weakened Patent Case

In August 2010, Oracle sued Google for infringement of Java patents and copyrights obtained from the Sun acquisition. Judge Alsup has set the matter for trial on April 16. Because the trial is scheduled for eight weeks, Judge Alsup has ordered Oracle and Google submit proposals to streamline the trial. In response, Oracle and Google filed the following joint statement of trial streamlining proposals in court yesterday.

I think the consensus is Google's primary risk is it may be required to pay major damages (e.g., hundreds of millions) for copyright infringement. The risk of paying major damages for patent infringement is less likely for the following reasons:

Google is faced with only two patents at trial. It used to be faced with seven US patents, but Google aggressively filed for reexamination of the patents. Only two Oracle patents survived for the trial: U.S. Reissue No. 38,104 (the '104 reissue patent) and U.S. Patent No. 6,061,520 (the '520 patent). My previous post: Patent Reexamination Has Arrived - Oracle v. Google gives details.

Google has limited past damages. Google was able to prove that Oracle and Sun had not marked any practice products so limited damage to those after Oracle gave Google notice under 35 USC 287. My previous post: Failure to Patent Mark - Losing Easy Money gives additional details.

Google is negotiating for a low ball amount for future damages. Google proposes to pay Oracle $2.7 million and 0.5% of Android revenues for the '104 reissue patent expiring in December 2012 and $80,000 and 0.015% for the '520 patent expiring in 2018. Since Google gives away Android free to handset manufacturers, revenue for this proposal may be based on Google ads and third party applications. I am not certain from the joint statement how Google intends the revenue be established, and why Oracle should accept the independent damages expert's royalty (0.015%) and unadjusted damages of a mere $80,000 for the '520 patent.

Google may win the judge's favor in agreeing to drop its invalidity defense to the '520 patent. Google had to prove invalidity by clear and convincing evidence so giving it up may not mean much: "Judge Alsup I am giving up this (difficult) defense and streamlining my case for trial, so please side with me...."

Google has preserved the defense of non-infringement. Oracle has to prove infringement by a preponderance of the evidence and this is often a potent defense for defendants.

Google is not engaging Oracle with its damage proposals. In my opinion, Oracle may be right to rebuff Google's "low ball" and go to trial. The proposed damages appear to be too low. I think everybody knows it, but this is positional bargaining 101.

Copyright © 2012 Robert Moll. All rights reserved.