Tuesday, March 27, 2018

CAFC in Oracle/Google case: we conclude that Google’s use of the declaring code and SSO of the 37 API packages was not fair as a matter of law.

The outcome of Oracle v. Google was a win for Oracle:

Because we conclude that Google’s use of the Java
API packages was not fair as a matter of law, we reverse
the district court’s decisions denying Oracle’s motions for
JMOL and remand for a trial on damages. We also dismiss
Google’s cross-appeal.

The CAFC noted:

It is undisputed that Google copied Oracle’s declaring
code and SSO for the 37 API packages verbatim. The
question is whether that copying was fair. “From the
infancy of copyright protection, some opportunity for fair
use of copyrighted materials has been thought necessary
to fulfill copyright’s very purpose, ‘to promote the Progress
of Science and useful Arts.’” Campbell v. Acuff-Rose
Music, Inc., 510 U.S. 569, 575 (1994) (quoting U.S. Const.,
art. I, § 8, cl. 8). As the Supreme Court noted in Campbell,
“[i]n truth, in literature, in science and in art, there
are, and can be, few, if any, things, which in an abstract
sense, are strictly new and original throughout. Every
book in literature, science and art, borrows, and

must necessarily borrow, and use much which was well known
and used before.

Id. (quoting Emerson v. Davies, 8 F.
Cas. 615, 619 (C.C.D. Mass. 1845)).
The fair use defense began as a judge-made doctrine
and was codified in Section 107 of the 1976 Copyright Act.
Id. at 576. It operates as a limited exception to the copyright
holder’s exclusive rights and permits use of copyrighted
work if it is “for purposes such as criticism,
comment, news reporting, teaching . . ., scholarship, or
research.” 17 U.S.C. § 107.

As to fair use:

While some courts once treated the entire question of
fair use as factual, and, thus, a question to be sent to the
jury, that is not the modern view.3 Since Harper & Row,
the Ninth Circuit has described fair use as an “equitable
defense.” Fisher v. Dees, 794 F.2d 432, 435 (9th Cir. 1986)


Harper & Row involved an appeal
from a bench trial where the district court concluded that
the use of the copyrighted material was not a fair use.
Harper & Row Publishers, Inc. v. Nation Enters., 723 F.2d
195, 199 (2d Cir. 1983). The Court, thus, had no reason
to discuss a jury determination of fair use and has not
since taken an opportunity to do so.
Perhaps because of this silence, even after Harper &
Row, several courts—including the Ninth Circuit—have
continued to accept the fact that the question of fair use
may go to a jury, albeit without analysis of why it may.
Compaq Comput. Corp. v. Ergonome Inc., 387 F.3d 403,
411 (5th Cir. 2004) (“The evidence presented at trial and
the reasonable inferences therefrom, when viewed
through the lens of the statutory fair use factors, support
the jury’s fair use finding.”);


Despite this case law, all aspects of Google’s fair use
defense went to the jury with neither party arguing that
it should not. Thus, the jury was asked not just what the
historical facts were, but what the implications of those
facts were for the fair use defense. During the first appeal,
Google argued to this court that there were disputed
issues of material historical fact relevant to its fair use
defense. As discussed below, the parties stipulated—or at
least ceased to dispute—some of those facts, and presented
the remaining disputed historical facts to the jury on
remand. The jury returned a verdict in favor of Google on
its fair use defense. Because the verdict form—though
captioned as a “special verdict”—did not ask the jury to
articulate its fact findings in any detail, we must assume
that the jury resolved all factual issues relating to the
historical facts in favor of the verdict

The Napster case appeared:

Giving customers “for free something they
would ordinarily have to buy” can constitute commercial
use. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004,
1015 (9th Cir. 2001) (finding that “repeated and exploitative
copying of copyrighted works, even if the copies are
not offered for sale, may constitute a commercial use”).


Accordingly, Google’s commercial use of the API packages
weighs against a finding of fair use.

As to transformative use:

A use is “transformative” if it “adds something new,
with a further purpose or different character, altering the
first with new expression, meaning or message.”


As explained
below, Google’s use of the API packages is not transformative
as a matter of law because: (1) it does not fit within
the uses listed in the preamble to § 107; (2) the purpose of
the API packages in Android is the same as the purpose of
the packages in the Java platform; (3) Google made no
alteration to the expressive content or message of the
copyrighted material; and (4) smartphones were not a
new context.


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