10:51am PT by Eriq Gardner
Supreme Court Hands Google a Landmark Win — and Hollywood a Huge Concern
Google can let out a huge sigh of relief now that the Supreme Court has saved the tech giant from billions of dollars in damages in a long-lasting lawsuit brought by Oracle over computer code used to build the Android operating system. As for big movie studios, while a copyright dispute about computer code might not seem like a subject of particular consequence for them, an opinion from Justice Stephen Breyer concluding that Google made fair use of copyrighted material will very likely be discussed for quite some time and be invoked in other contexts. As such, a few lines in particular from today's opinion regarding public benefits and public harms could have many in Hollywood quite tense about a future staked on intellectual property.
First, some background about what was dubbed the "Copyright Case of the Century" by some experts.
Oracle is the owner of Java, a popular programming platform used to create apps for messaging, navigation, news and social media. This copyright fight focused on the Java API, and specifically, how Google's engineers while writing their own task-implementing programs copied certain declaring code from Java.
Google argued, ultimately successfully, that there were good reasons for relying on preexisting declarations: Those were most familiar to programmers and the copied code allowed engineers to organize themselves before moving onto the nitty gritty of implementation code. Without that copying, programmers would need to learn an entirely new system to call up the same tasks.
Was declaring code within the scope of copyright protection?
Surprisingly, that's a question that the high court largely bypassed today. The case was pre-hyped as one that would determine the copyrightability of computer code, but Breyer essentially says: Let's assume all of Java is copyrighted; did Google make fair use?
A quick word about Breyer: He's long been the active justice on the Supreme Court that at least in terms of copyright, has been deemed most leery of the expansion of property rights. It's true that seven years ago, Breyer delivered TV broadcasters a welcome victory in the Aereo case; nevertheless, he's viewed as a technologist, a reputation he's earned from his days as a scholar opposing term extensions to his thoughts in cases like Grokster. There, he suggested that file-sharing technologies might get a pass from contributory liability under the same test ("capable of substantial noninfringing uses") once given to the Sony Betamax VCR.
In Breyer's majority opinion, which notably attracted the votes of newer justices like Gorsuch and Kavanaugh, he doesn't ignore the fact that this case involves functional computer code rather than something inarguably creative like, say, a movie, TV show or book. It's just cabined under the "nature of the copyrighted work" — one of the four main factors governing fair use analysis (and the factor that has traditionally been given short shrift by judges). Breyer reiterates earlier precedent that some works of originality and creativity are closer to the core of copyright than others — and that "declaring code is, if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright."
So far, no problem — at least from Hollywood's standpoint.
But potential trouble for the industry arrives in the section about the purpose and character of potential use, in other words, whether Google's use of Java was transformative.
In an amicus brief to the high court, the Motion Picture Association (minus, notably, Netflix) urged the high court against concluding that Google (which has long been an arch-enemy) made any transformative use of Java. Industry lawyers wrote, "Unlike purely expressive works, software, by definition, has a functional component that makes it inherently different. Applying the concept of transformation to partially non-expressive works like software is like trying to put the proverbial square peg into a round hole: transformation, with its focus on new expression, meaning, or message, assumes an effect on human thought or emotion; in contrast, software, in significant part, operates independently of such human thought and emotion."
Breyer concludes otherwise by buying Google's argument that it has achieved something truly innovative.
"Here Google’s use of the Sun Java API seeks to create new products," he writes. "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. To the extent that Google used parts of the Sun Java API to create a new platform that could be readily used by programmers, its use was consistent with that creative 'progress' that is the basic constitutional objective of copyright itself."
Breyer also notes that Google's engineers did what they did partially for the sake of interoperability before ultimately tipping this fair use factor toward Google.
Standing alone, even given the industry's amicus brief, that might not cause fire alarms to ring. Instead, the lines that Hollywood may find most disconcerting come from the section that measures the fair use factor of market effects. At an earlier stage of this case, the MPA had authored a separate friend-of-the-court brief aimed to ensure that just because a Hollywood studio (or any copyright holder) hasn't exploited its work somewhere doesn't mean they wouldn't eventually do so.
So what does Breyer write?
He acknowledges that a copyright infringement does mean potential losses for an owner, but adds that one must also take into account the source of the loss as well as the public benefits the copying will likely produce. "Are those benefits, for example, related to copyright’s concern for the creative production of new expression?" he asks. "Are they comparatively important, or unimportant, when compared with dollar amounts likely lost (taking into account as well the nature of the source of the loss)?"
Breyer acknowledges that a jury could have found that Android didn't harm any market for Java and that there's good evidence Oracle wasn't in any position to enter the mobile phone market. Google sought a license to use the Java code and didn't get it, but that's not important in the end.
Breyer writes — and this will likely be quoted for quite some time — "to allow enforcement of Oracle’s copyright here would risk harm to the public."
Explaining, he seems to add a public benefits and harm test to the usual market analysis by writing, "Given the costs and difficulties of producing alternative APIs with similar appeal to programmers, allowing enforcement here would make of the Sun Java API’s declaring code a lock limiting the future creativity of new programs. Oracle alone would hold the key. The result could well prove highly profitable to Oracle (or other firms holding a copyright in computer interfaces). But those profits could well flow from creative improvements, new applications, and new uses developed by users who have learned to work with that interface. To that extent, the lock would interfere with, not further, copyright’s basic creativity objectives."
In other words, copyright can become the enemy of progress — rising to an exclusive ability to control and stymie a developing market. That's something that a majority of justices on the Supreme Court find intolerable, and it's an important development in the history of IP enforcement. As Hollywood confronts new derivatives of its intellectual property, in all sorts of creative and technologically advanced ways, Breyer's words could become very significant indeed. While the justice does note that application of fair use will depend on context and that "copyright’s protection may be stronger where the copyrighted material is fiction, not fact, where it consists of a motion picture rather than a news broadcast, or where it serves an artistic rather than a utilitarian function," he makes no hard lines limiting application of his fair use analysis and also sees it as providing "a context-based check that can help to keep a copyright monopoly within its lawful bounds."
No surprise then that the minority opinion seizes upon all of this for criticism.
As Justice Clarence Thomas writes, joined by Justice Samuel Alito, "The majority’s concern about a lock-in effect … is speculation belied by history. First, Oracle never had lock-in power. The majority (again) overlooks that Apple and Microsoft created mobile operating systems without using Oracle's declaring code."
And putting it all together, including the section on how Google has made transformative use of code through the creation of new products, Thomas continues, "That new definition eviscerates copyright. A movie studio that converts a book into a film without permission not only creates a new product (the film) but enables others to 'create products'—film reviews, merchandise, YouTube highlight reels, late night television interviews, and the like. Nearly every computer program, once copied, can be used to create new products. Surely the majority would not say that an author can pirate the next version of Microsoft Word simply because he can use it to create new manuscripts."
Here's the full opinion: