Rethinking Software Development Agreements in the Age of Copyright Battles

By: Prema Roddam and Juan Valdez

The U.S. Supreme Court is scheduled to decide this fall on a decade-old battle between Google and Oracle that may have far-reaching implications for software developers and their clients. This is a unique case because it highlights the importance and complexities of protecting IP rights and applying copyright concepts in a software agreement. As the country awaits the verdict, third-party software developers and their clients should both meet with an intellectual property (IP) attorney to create strong Software Development Agreements that ensure they are fairly entitled to use the code or have certain ownership protection.

Google V. Oracle: Is Software Copyrightable?

Back in the mid-2000s, Google developed the Android operating system using Oracle’s Java programming language. After negotiations for a commercial license broke down, Google software engineers wrote their own Java code for Android. While most of their code was unique, they copied Java’s organizational structure and about 3% of its original coding so that applications written in Java could run on Android. The Google v. Oracle case centers on whether Google’s use of Java coding structure – and some coding strings – violated Oracle’s intellectual property rights.

The Java programming language is unique because it enables developers to write code for programs that can run on multiple operating systems, and it allows different programs to work together. Java uses an application programming interface (API) with pre-written codes that perform thousands of functions. This means that software developers can use the Java API to accomplish a variety of goals without having to start from scratch and write new code.

Google chose the Java API to develop its Android operating system because it was so well-known. Developers would be able to create mobile applications while easily using a type of code they were familiar with. According to Google, they “had to replicate the…structure of the Java API declarations exactly; any change to those declarations would have prevented developers from reusing the same commands, thereby forcing them to learn new commands for each routine task.” ¹

Litigation History

US Judges have ruled in favor of both Oracle and Google, and both sides have filed appeals.

During one ruling in favor of Google in 2012, Judge Alsup stated that the Java API could not receive copyright protection, because although it is creative and original, it is “a command structure, a system or method of operation.”² Ideas, structures, and functions cannot be copyrighted. Per Judge Alsup, “anyone free to use the [Java] language…(as Oracle concedes all are)” must use some basic Java coding packages, unchanged.

This decision was reversed in 2014, with the US Court of Appeals for the Federal Circuit stating: “API packages are entitled to copyright protection.”³ Google has since appealed and brought the case to the Supreme Court. If the appeal from Google is overturned, it could affect many software programs and related software agreements and as a result, it could lead to an increase in software infringement litigation.

What this Supreme Court Verdict Could Mean for Your Business

Keeping APIs open enables developers to freely build applications that work together. If the Supreme Court rules in favor of Oracle this fall, software developers may need to either:

Pay for a license to use a coding language
Create new code that does not rely on copyrighted APIs

Either outcome could increase the cost of software development, slow innovation, and make it so that software systems cannot communicate with each other. These are significant impacts that could disrupt the face of software programming.

Businesses that plan to use third party software developers should work closely with an experienced intellectual property attorney to ensure their Software Development Agreements protect their rights. A Software Development Agreement not only establishes a strong binding relationship between the parties but also guarantees the ability to patent, copyright, trademark, or keep a trade secret in your company to avoid a legal battle such as Google V. Oracle.

If your company relies heavily on APIs, be aware that the Supreme Court verdict may interrupt the life cycle of your product. Further, a Supreme Court decision in favor of Oracle could make it more expensive for one application to run on multiple operating systems. Companies may need to consider which operating system best suits their project or consider increasing their budget to enable their project to work on multiple operating systems.