In October, I listened to and reported on the arguments made by Google and Oracle at the Supreme Court, and highlighted the potential impact of the Supreme Court's decision. My chief concern was whether the Court would exclude declaring code from copyright protection. It seems to have dodged this question and instead focused on fair use to rule in Google's favor. I am glad that they tacitly have approved copyright protection for all software, I am concerned with the breadth that they have given to fair use for software, and the practical outcome of this decision.
The first paragraphs of Justice Thomas's dissent truly sums it up:
"Oracle spent years developing a programming library that successfully attracted software developers, thus enhancing the value of Oracle’s products.1 Google sought a license to use the library in Android, the operating system it was developing for mobile
phones. But when the companies could not agree on terms, Google simply copied verbatim 11,500 lines of code from the library. As a result, it erased 97.5% of the value of Oracle’s partnership with Amazon, made tens of billions of dollars, and established its position as the owner of the largest mobile operating system in the world. Despite this, the majority holds that this copying was fair use.
...Google’s use of that copyrighted code was anything but fair. "
As an IP attorney it seems like fundamental tenets of IP law have been under siege by tech companies for the last decade, and the Supreme Court is more than willing to answer the call to continue to strip away IP protection in the U.S. I am disappointed in the decision as it seems to open the door for companies to take advantage of software providers, like Oracle, that depend on licensing revenue from downstream consumers for their livelihood.
From a legal standpoint, the Court upheld that fair use is a mixed question of law and fact, and did not disturb the overall structure of fair use analysis. However, it used the factor relating to the nature of the work to draw lines between different types of software as a means for finding in Google's favor. Specifically, the Court reasoned that declaring code is further from what Congress intended to protect than implementing code, which is more likely to be inextricably tied to creative expression. In essence, because declaring code lies closer to the function of the computer driven by the software, it is less worthy of strong protection.
Their reasoning is flawed and appears to simply be an end-around of whether the declaring code should be protected by copyright law. The dissent rightfully points out the incongruities of this reasoning within the statutory context and other fair use decisions fostering the better position that the nature of the work is simply software as opposed to another protected work.
The Court goes on to find all of the factors including the substantiality of the use and the market effects of the use as favoring fair use. I find their application of these factors to the facts to be absurd. Suggesting that taking only the code needed to implement the Android phone system, i.e. bypass Oracle's software license, cannot be deemed insubstantial. Moreover, the economic impact identified by Justice Thomas including destroying the value of Oracle's software, making billions of dollars and emerging as the dominant cell phone operating system demonstrates a significant impact on the market for the original work. Yet somehow the court viewed it as insubstantial.
Others that have reviewed the opinion have optimistically indicated that it should be limited to its facts, but having witnessed the fallout from the Court's Alice decision in the patent context, I fear that we will see an increase in copyright infringement excused under the banner of fair use further weakening the protections for software in the U.S.
This weakening places more emphasis on obtaining strong contractual limitations on use of licensed software. Since contract protection may become the first and last line of defense for software similar to Oracle's, companies that depend on downstream licenses would be wise to have an audit of their current restrictions.