Google Android Faces Legal Threats

Jun.21.11 | About: Alphabet Inc. (GOOG)

Most attention concerning Google's (NASDAQ:GOOG) patent litigation over its Android phones involves the operating system itself.

While Android is based on Linux, it is optimized to be controlled centrally. You can't fork it as you would a normal Linux. It's an ecosystem controlled by Google.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and others have filed literally dozens of patent suits against Google's OEMs, the folks who make Android phones, charging violations of various patents, and while the impact of any one suit may not be great, their cumulative effect could be enormous.

That's the view of Florian Mueller (above), an opponent of software patents based in Germany, who since last year's Bilski decision legitimizing such patents has been analyzing such suits through his FOSSPatents blog. He writes that Google's biggest problem is the suit Oracle (NYSE:ORCL) filed directly against it concerning Java, the computer language used to write apps for Android devices.

Oracle makes both copyright and patent claims against Google's use of Java in its Dalvik virtual machine, which connects the language to the operating system, he writes, and both may have merit. Oracle alleges that Google did not use a General Public License (GPL) version of Java for Dalvik, but an Oracle-proprietary version, and that it then changed the software to make it quasi-proprietary to Google, a further violation of Oracle's rights.

Why did Google do this? Two reasons. One, previous Java owner Sun Microsystems was pushing wide adoption of Java when Google began its work, not monetization, and Google felt it could get away with it. Second, Google wanted to maintain control of the Android ecosystem, and saw a mixture of proprietary and permissive open source licenses (like Apache) as the way to do that.

But in doing this with code it had minimal legal rights to, Google has put much of its future at risk, Mueller writes.

Last week Oracle filed an estimate from its experts that Google's liability in the case could be as much as $6.1 billion. Basically Oracle wants everything Google has made from Android, plus half of anything it might make going forward. This would force Google to charge OEMs and software companies for use of the Android software – in order to pay Oracle.

The problem goes deeper than that, Mueller writes. The way in which Google engineers connected Java to Linux may violate the GPL, which could force the company to publish the system's soft code, and could force its software ecosystem to do the same.

All this means that, despite Android's market popularity, the smart phone game is not over. OEMs may look again at Microsoft's Windows Phone or HP's WebOS in order to avoid litigation risks, Mueller thinks, and the precedent would be set that no phone operating system – not even one based on Linux – can be free.

Disclosure: I am long GOOG.