Computer Programs are Different, Says SCOTUS in Landmark Ruling that Google’s Use of Oracle’s API Packages Was Fair

The U.S. Supreme Court this morning found Google’s use of Oracle’s Java application programming interface (“API packages”) a fair use as a matter of law, with Justices Thomas and Alito dissenting. The decision reverses a 2018 Federal Circuit ruling in favor of Oracle. Google appealed that decision to the Supreme Court in January 2019, and three attorneys made arguments to the High Court in October 2020: Thomas Goldstein of Goldstein & Russell argued for Google; Joshua Rosenkranz of Orrick argued for Oracle; and Deputy Solicitor General Malcolm Stuart argued on behalf of the U.S. Government. Although the justices’ questioning at that hearing seemed skeptical of Google’s arguments, it also revealed that the Court wanted to avoid upending industry practices in computer programming.

The High Court agreed in 2019 to consider the following questions: 1) Whether copyright protection extends to a software interface; and 2) Whether Google’s use of a software interface in the context of creating a new computer program constitutes fair use.

Today, the Court held:

Google’s copying of the Java SE API, which included only those lines of code that were needed to allow programmers to put their accrued talents to work in a new and transformative program, was a fair use of that material as a matter of law…. Computer programs differ to some extent from many other copyrightable works because computer programs always serve a functional purpose. Because of these differences, fair use has an important role to play for computer programs by providing a context-based check that keeps the copyright monopoly afforded to computer programs within its lawful bounds.

Justice Breyer delivered the opinion for the Court. The majority explained that, in reviewing the Federal Circuit’s decision, the Court assumed, “for argument’s sake,” that the material was copyrightable. However, applying the Copyright Act’s four guiding factors to assess fair use, the Court determined that Google’s “limited copying of the API” was a fair use.

The four factors are:

• The purpose and character of the use;
• The nature of the copyrighted work;
• the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
• the effect of the use upon the potential market for or value of the copyrighted work.

As to the nature of Oracle’s copyrighted work, the Court said that, while the declaring code on the one hand “resembles other copyrighted works in that it is part of a computer program…it differs, however, from many other kinds of copyrightable computer code.” This is because it cannot be separated from other, uncopyrightable elements. For instance, it is “inextricably bound together” with “the division of computing tasks; the idea of organizing tasks into what we have called cabinets, drawers, and files, an idea that is also not copyrightable;…the use of specific commands known to programmers, known here as method calls (such as java.lang.Math.max, etc.), that Oracle does not here con-test;  and implementing code, which is copyrightable but was not copied.”

This makes the declaring code that Google copied further from “the core of copyright” than other kinds of works, said the Court. It added:

That fact diminishes the fear, expressed by both thedissent and the Federal Circuit, that application of “fair use” here would seriously undermine the general copyright protection that Congress provided for computer programs. And it means that this factor, “the nature of the copyrighted work,” points in the direction of fair use.

On the subject of the purpose and character of the use, the Court assessed whether Google’s use was transformative in some way, so as to add something new and important to the copyrighted work. The majority said:

Here, Google’s use of the Sun Java API seeks to create new products. It seeks to expand the use and usefulness of Android-based smartphones. Its new product offers programmers a highly creative and innovative tool for a smartphone environment…. Google, through Android, provided a new collection of tasks operating in a distinct and different computing environment. Those tasks were carried out through the use of new implementing code(that Google wrote) designed to operate within that new environment.

The Court likewise found that the amount and substantiality of the copied content should be viewed in light of “the several million lines that Google did not copy,” rather than the 11,500 lines of code it did copy, because those lines were copied for a “valid and transformative purpose.” While the Federal Circuit had argued that Google could have copied only the 170 lines of code that were necessary to write the Java language, the High Court said that view of Google’s legitimate objectives was too narrow. The Court explained:

Google’s basic objective was not simply to make the Java programming language usable on its An-droid systems. It was to permit programmers to make use of their knowledge and experience using the Sun Java API when they wrote new programs for smartphones with the Android platform. In principle, Google might have created its own, different system of declaring code. But the jury could have found that its doing so would not have achieved that basic objective. In a sense, the declaring code was the key that it needed to unlock the programmers’ creative energies. And it needed those energies to create and to improve its own innovative Android systems.

Finally with respect to market effects, the Court said there was too much uncertainty as to whether Sun/ Oracle could have successfully competed in Android’s market place; an inability to accurately determine whether Oracle’s lost revenue has to do with its own investments in creating the Sun Java API or with third parties’ investments; and a high risk of creativity-related harms to the public, all of which weighed in favor of fair use.

Before reversing and remanding the case back to the Federal Circuit, the Court made clear that its decision does not overturn or modify its earlier cases on fair use, but rather that this case is different:

[W]e here recognize that application of a copyright doctrine such as fair use has long proved a cooperative effort of Legislatures and courts, and that Congress, in our view, intended that it so continue. As such, we have looked to the principles set forth in the fair use statute, §107, and set forth in our earlier cases, and applied them to this different kind of copyrighted work.

In their dissent, authored by Justice Thomas, Justices Thomas and Alito argued that the Court reached the “unlikely result” that Google’s use was fair “in large part because it bypasses the antecedent question clearly before us: Is the software code at issue here protected by the Copyright Act?”

By choosing not to analyze the question of copyrightability, the Court skipped “half the relevant statutory text” and denied the reality that Google’s use was “anything but fair.” In its own analysis of the four fair use factors, the dissent found that three of the four factors weighed “decidedly against Google” and that the sole factor that possibly favored Google—the nature of the work—“cannot by itself support a determination of fair use.” The dissent concluded:

The majority purports to save for another day the question whether declaring code is copyrightable. The only apparent reason for doing so is because the majority cannot square its fundamentally flawed fair-use analysis with a finding that declaring code is copyrightable. The majority has used fair use to eviscerate Congress’ considered policy judgment.

In a statement following the ruling, Dorian Daley, Executive Vice President and General Counsel, Oracle, said:

The Google platform just got bigger and market power greater — the barriers to entry higher and the ability to compete lower.  They stole Java and spent a decade litigating as only a monopolist can.  This behavior is exactly why regulatory authorities around the world and in the United States are examining Google’s business practices.

J. Michael Keyes of Dorsey & Whitney called the ruling “the biggest copyright decision in a generation” and said that it’s “hard to overstate the significance.” He added that the Court’s fair use analysis is likely to result in “more copying, more cases, and more claims of fair use” with respect to software-related claims.

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