Over the years, Google has asserted the fair use doctrine in more than one lawsuit as a defense to using copyrighted material without permission. In a previous article, we discussed Google’s fair use win in the case Authors Guild v. Google. But courts don’t always see eye-to-eye with the Internet giant. On March 27, the Court of Appeals for the Federal Circuit reversed a jury verdict of fair use in Goggle’s favor, concluding instead that Google’s use of protected works was inherently unfair. As a counterpoint to Authors Guild, let’s look at Oracle America v. Google, especially regarding the fourth fair use factor—market harm.
The Facts
In 2005, Google began developing its Android mobile operating system. However, to use Java (the preferred programming language for mobile devices), Google needed software application programming interfaces (APIs) owned by Oracle America. For a contracted fee, Oracle licenses the APIs to software developers, and Google and Oracle did enter into negotiations for a licensing agreement. But they never made a deal. Rather, when Google’s Android team couldn’t develop its own APIs, Google copied verbatim 11,500 lines of Oracle’s code as well as the structure, sequence, and organization of 37 Java API packages.
Oracle sued for copyright infringement, and, in 2012, a jury found Google had copied protectable expression from the APIs but deadlocked over whether Google’s use was fair use. But then, after the verdict, the district court held that the APIs were not copyrightable after all, setting aside the jury’s finding of infringement. That ruling was reversed in 2014 by the Federal Circuit, which remanded the case for a new trial to decide the fair use question. In 2016, a jury found in Google’s favor, which brings us to the appeal and, as of March, Google’s loss.
How Market Harm Prevents Google from Successfully Asserting Fair Use
After finding that Google’s use was not transformative because Google did not alter the Java code with “new expression, meaning, or message (Fair Use Factor #1);” that the nature of the copyrighted work was functional but still protected (Fair Use Factor #2); and that the extent of the copying was neutral (Fair Use Factor #3), the court looked at market harm (Fair Use Factor #4). Market harm refers to the effect of the use of a copyrighted work on the potential market for or value of that work. In this case, the court found clear market harm.
In Authors Guild v. Google, the court decided Google’s use of copyrighted material wasn’t a meaningful substitute for the works in question—thus, no market harm. Here, the court found Android and Java to be direct competitors in the market for mobile device software, with Java having been used in smartphones and tablets before Android entered the marketplace. Moreover, “Android’s release effectively replaced Java SE as the supplier of Oracle’s copyrighted works… This superseding use is inherently unfair.”
The Android system is hugely successful, and (the court noted) “devastating” to Oracle’s licensing strategy. Many consumers switched to Android and other Java customers, such as Amazon, demanded discounts. If nothing else, this case shows that when evidence of market harm is clear—and not conjecture—fair use is very hard to prove.
Read the full decision here.