Two tech giants of the world, Google and Oracle America, have clashed heads in court and a verdict has been reached – a win for Google, and users of a piece of tech called application programming interfaces (APIs). While an Oracle appeal is to be expected, there may be implications for copyright law, how software is developed and how it is used in the tech industry. But how much will it really matter?

What are APIs?


Application programming interfaces help the application-making process easier: it provides all the building blocks to making an app or operating system. For example, Snapchat has multiple functions that need to access the Android or iOS suite of features including mobile data, the keyboard and camera. Rather than Snapchat developing their own complex set of code to try and access those features, Google or Apple will develop an API where programmers can easily apply the features to their app.

Google v Oracle


The 37 APIs in question were developed in Java, a language first created by Sun Microsystems, Inc before being acquired by Oracle. After being renamed as Oracle America post-acquisition Oracle America alleged that Google has used those 37 APIs in their Android mobile operating software. Whilst there is no dispute about the fact Google had not literally copied the code, Oracle argues that Google illegally used them and sought damages (in the order of billions of USD). The first court found that APIs cannot be copyrighted at all, before being overturned by a superior appeals court. The only defence available to Google, which the jury decided in Google’s favour for, was that they exercised ‘fair use’ in using Oracle’s APIs.

What the legislation says


The US Copyright Act 1976 lists ‘fair use’ as a way to allow the use of copyrighted material. There are 4 factors that a court is to consider:

  1. Purpose and character of use
  2. Nature of the copyrighted work
  3. The amount and substantiality of the copyrighted work; and
  4. The effect of the use upon the potential market for or value of the copyrighted work

In this case, it was the first factor that was the most contentious, which considers whether Google’s actions were for commercial use or whether it was transformative.

What the cases say


The idea of whether the copyrighted work has been used in a transformative matter is new – it is not in the legislation, but was first raised and applied in the 1994 case of Campbell v. Acuff-Rose Music 510 U.S. 569 (1994). In the directions to the jury in this Google v Oracle case, Judge Alsup said that transformative was a high test – it had to be more than a little alteration, and if there was no change the work must have been used in a different context.

Some key cases that have looked at what ‘transformative’ actually means:

  • This case – mobile software: the jury found Google’s argument that the APIs were being used in a different context as the stronger argument: that is, using APIs that were developed as open-use packages is in the different context to its use in mobile software
  • Parody: it is held generally that parody may be ‘fair use’ as it is both transformative and is a form of criticism; ‘the heart of any parody is its evocation of the message or style of the original work in order to alter that message or style in a way that humorously expresses the author’s opinion of the original work’ (Albeine Music Inc v Sony Music Entertainment 320 F. Supp. 2d 84 (S.D.N.Y. 2003)). The courts have produced the eloquent test of ‘whether a parodic character may reasonably be perceived’ from the work being contested.
  • Remixes: some song or video remixes are arguably transformative works

Implications for the tech industry


It has been widely accepted that code is reusable – that is, anyone can find it, use it or adapt it to their own use. The arguments are that such information is the right of all people to allow innovation and entrepreneurship. It’s also necessary for efficient program development – if programmers are required to seek permission each time they call upon an API, it can present both unnecessary legal risk and uncertainty to the process, and prove a powerful weapon to silence competition.

So whilst the Federal Circuit Court has ruled that APIs can be protected by copyright (opening the door to litigation against anyone who uses an API created by Oracle or other copyrighted API), it does bring it back from the brink with both the Federal and a District Circuit Court finding ‘fair use’ may be a valid defence in tech cases.

The Law in Australia


The Copyright Act 1968 (Cth) has some exceptions, including of fair dealing, but does not encompass a ‘fair use’ exception like in the US. It is a much narrower and stricter test, as applied by the High Court in many cases; the Australian Law Reform Commission has recommended there be a non-exhaustive ‘fair use’ exception in the law as it would:

  • provide flexibility to respond to changing conditions as it is principles-based and technology neutral;
  • assist innovation;
  • restore balance to the copyright system; and
  • assist with meeting consumer expectations.

The Commission did not, however, state that there would be unnecessary cost in litigation for determining ‘fair use’ and it might not comply with international copyright law.

Where to from here?


The win for Google in the District Circuit Court of Northern California provides some certainty in an area for what constitutes ‘fair use’. However, it means that whenever there is a legal dispute only a court can resolve it as there is no strict test. There will be many in-house counsels trying to wrap their heads around the latest judgment and seeing the implications for their existing operations, particularly in the past-moving technology industry, which can present a legal minefield.

Let us know your thoughts on the case of Google v Oracle by tagging us #lawpath or @lawpath.

William Vu

William is a Paralegal, working in our content team, which aims to provide free legal guides to facilitate public access to legal resources. His interests lie in public law, in particular constitutional and administrative law.