Google Win Over Oracle Well Worth The $50 Million Cost

| About: Alphabet Inc. (GOOG)

There are days when you really have to take your hat off to the American judicial system. This is one of those days.

After a titanic struggle that cost both companies $50 million, Judge William Alsup has absolved Google (NASDAQ:GOOG) of violating Oracle's (NYSE:ORCL) copyrights on Java, after a jury had ruled against Oracle's patent claims over the same software.

Google had written a Java Virtual Machine (JVM) called Dalvik, which was at the heart of its Android system. Oracle was demanding injunctions and payments that could have crippled the system's potential profitability.

It's a big win for Google, and a bigger win for open source. The win for open source is contained deep inside Alsup's ruling:

So long as the specific code used to implement a method is different, anyone is free under the Copyright Act to write his or her own code to carry out exactly the same function or specification of any methods used in the Java API.

After two years of proceedings and six weeks of trial, Alsup was able to understand the difference between the functions of code and the code itself. As long as a company creates its own way of doing the things another company set out to do, in other words, it's legal.

Without this ruling open source projects could not be forked, and proprietary companies would have been able to prevent compatible products from coming to market. It's a big deal.

While Oracle will appeal, and its advocates insist they have a case, there will be a big presumption in favor of Google's arguments because both sides were heard so extensively at trial.

Because copyrights can extend for nearly a century and require no application, while patents run just 20 years and require detailed description of what's being protected, they could have been much more powerful weapons in court. Those weapons are now, for the most part, disarmed.

Disclosure: I am long GOOG.

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