March 26, 2023

Bits Blog: Google Cleared of Infringing on Oracle’s Java Patents

David Paul Morris/Bloomberg News

Google did not infringe on any Oracle patents when it used Java software in the Android operating system, a federal jury said on Wednesday.

The verdict, reached in Federal District Court in San Francisco, leaves Oracle with a relatively small claim of copyright infringement, making it almost certain that the judge will not demand a harsh penalty from Google.

That would be a mild end to what at one time seemed to be a major case between two of the largest companies in computer technology. Oracle, which picked up the Java software language when it bought Sun Microsystems, accused Google of violating both patent and copyright protections in developing Android, which is now the world’s most popular smartphone operating system. If Google had lost on several counts of the case, it could have been subject to severe fines or been forced to let Oracle in on future developments of Android.

“It’s a full win for us,” said Jim Prosser, a Google spokesman. “If you look at what has happened in this case so far, they didn’t have much.”

Deborah Hellinger, an Oracle spokeswoman, issued a statement saying:

“Oracle presented overwhelming evidence at trial that Google knew it would fragment and damage Java. We plan to continue to defend and uphold Java’s core write-once, run-anywhere principle and ensure it is protected for the nine million Java developers and the community that depend on Java compatibility.”

The case became notable for the star power of its witnesses, as both Oracle’s chief executive, Lawrence J. Ellison, and Google’s chief executive, Larry Page, took the stand. Evidence also included several embarrassing e-mails from Google executives discussing whether they needed to seek a software license for Java.

Earlier this month, the jury found that Google had violated Oracle’s copyright, but only on a few lines of code, out of millions of lines in Android. Other copyright claims were, like Wednesday’s patent claims, unconvincing to the jury.

Judge William Alsup of Federal District Court in San Francisco, who is presiding in the case, has shown himself to be something of an amateur programmer. He has been somewhat dismissive of the sophistication needed to create the Android code that the jury earlier found had been stolen, another indication that he was unlikely to pass harsh judgment on Google.

While Oracle may appeal the verdict, there is still another wrinkle in the trial. The judge must still rule on whether or not application programming interfaces, or A.P.I.’s, can be copyrighted. A.P.I.’s are the specifications between different software components that enable them to communicate with each other. If he rules that they cannot be copyrighted, damages will be relatively modest. If he finds that they are, the case will be again presented to a jury.

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I.R.S. Loses Tax Case Against Lay of Enron

The United States Tax Court rejected a bid by the Internal Revenue Service to collect $3.9 million from the estate of the former Enron chief Kenneth L. Lay and his wife.

The case was related to transactions among Mr. Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the chief executive position, under the stipulation that the annuities would be returned to him if he worked a 4 ¼-year term. The company did not survive that long, and it filed for bankruptcy protection in December 2001.

The I.R.S. contested the Lays’ assertion that the annuities had been sold to Enron. In 2009, the I.R.S. filed a notice of tax deficiency for $3.9 million, arguing that the Lays should have reported the $10 million as income in 2001. Instead, they reported that they sold the annuities to Enron at their cost basis for no gain.

Judge Joseph Goeke of the tax court said in the decision that the agency’s position was incorrect and ruled for Mrs. Lay and for Mr. Lay’s estate. The transactions, he wrote, were legitimate, and neither of the Lays nor the estate received any distributions or death benefit from the annuity.

Mr. Lay, who died in July 2006 at age 64, was convicted in May of that year by a federal jury in Houston. He and the company’s former chief, Jeffrey K. Skilling, were found guilty of deceiving shareholders about Enron’s financial condition by hiding debt and losses in a series of off-balance-sheet entities.

More than 5,000 jobs and $1 billion in employee retirement funds were wiped out when the world’s largest energy trader plunged into bankruptcy in December 2001, after revelations of widespread accounting fraud.

Mr. Lay’s convictions were later thrown out because he did not have a chance to appeal the cases before he died.

Enron’s creditors, the government, Mr. Lay’s estate and Mrs. Lay have been involved in a variety of lawsuits since the company’s demise.

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