U.S. Supreme Court Clarifies Fair Use Defense Under Copyright Law as Tech Innovators Win Significant Victory in Google v. Oracle

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On April 5, 2021, the United States Supreme Court held that tech giant Google, which used code from the Oracle-owned computer programming language “Java” to create the interface for Android smartphones, was nevertheless not liable on Oracle’s claims of copyright infringement. In reaching its 6-2 decision, the Supreme Court reversed a 2018 Federal Circuit decision in this decade-long litigation over the code that supports smartphones used by more than two billion people throughout the world.

Oracle (formerly known as Sun Microsystems) is the developer of Java, a programming language that allows developers to compute data, carry out a system of commands, and implement that data into useable software. Oracle sued Google in 2010 over the use of the Java application programming interface (“API”). Oracle asserted that when Google created the Android operating system, Google directly copied Oracle’s “declaring source code”—a Java language that organizes the universe of tasks a program might perform—and then wrote its own “implementing code,” the actual programming of the Android interface itself.

Initially, the trial judge in the Northern District Court of California held that the Java API was not copyrightable, concluding that Google only used functional elements of Java that are not protected under the Copyright Act, which does not protect “any idea, procedure, process, system, method of operation, concept, principle, or discovery.”  17 U.S.C. § 102. The Federal Circuit reversed, holding that the Java API had sufficient elements of creativity to merit copyright protection, and the case proceeded to trial, where a jury found infringement—but also found that Google was entitled to the fair use defense. The 2018 appeal to the Federal Circuit reversed again, finding that Google could not show fair use as a matter of law.

Fair use is a defense that allows limited use of a copyrighted work even if such use would otherwise infringe. Under the Section 107 of the Copyright Act, there are four factors to determine whether fair use applies: “the purpose and character” of the use; “the nature of the work” itself; “the amount and substantiality of the portion used in relation to the work as a whole;” and “the effect of the use on the potential market for or value of the copyrighted work.” 17 U.S.C. § 107.

Some of the largest tech companies in the world lined up to file amicus briefs supporting Google’s position, including Microsoft and IBM. Over 150 academics and tech professionals also filed briefs in support of Google, arguing that a decision for Oracle would stifle technological creativity and wreak havoc on software developers. On the other hand, the Trump administration had previously sided with Oracle and urged the Court to deny certiorari. Critics of Google’s position contended that its use of Java was commercial, not transformative, and that it harmed the market for Java’s platform. In particular, the Trump administration brief opposing certiorari noted that one of Google’s key competitors, Apple, was able to develop a highly successful mobile operating system without copying any Java code. In total, several dozen amicus briefs were filed.

In its 6-2 decision reversing the Federal Circuit, the Supreme Court decided the case on fair use grounds, and declined to decide the second question in the case: whether an API is copyrightable at all. The Court wrote, “Given the rapidly changing technological, economic, and business-related circumstances, we believe we should not answer more than is necessary to resolve the parties’ dispute.” Instead, the Court assumed for argument’s sake that Oracle’s Java API was copyrightable but held that Google nevertheless escaped liability through the affirmative defense of fair use.

Notably, in applying the four factors, the Supreme Court held that fair use, even if it implicates findings of fact left to the jury, is ultimately a legal question of whether on those facts the defense applies and, thus, is subject to de novo review.

The Court applied the four factors and held that Google had a fair use defense as a matter of law. The “nature of the work,” the Court held, “favors” fair use because the Java code necessarily combines uncopyrightable ideas, such as its “general task division and organization,” with some elements of creative expression that, here, were actually Google’s (the “implementing code”). “Unlike many other programs,” the Court wrote, Java’s value “in significant part derives from the value that those who do not hold copyrights, namely, computer programmers, invest of their own time and effort to learn the API’s system.”  Id. at 24.

The “purpose and character” factor, as the Court explained, turns on whether the use was “transformative.” Google’s use of Java’s API to create Android was indeed transformative, the Court held.

The remaining factors similarly favored Google. With respect to the “amount and substantiality” of the amount of Java code Google copied, the Court noted Google’s use of 11,500 lines of declaring code was only 0.4 percent of the entire Java API. Also, the Court highlighted portions of the record showing that Google’s use of the Java API actually increased its value to Oracle, and this, coupled with the potential harm to the market at large if technology-related creativity were stifled, led the Court to find the fourth factor (the use’s “effect” on the “potential market for or value” of the work) also favored Google.

The Supreme Court’s ruling for Google is a major victory for innovation in the technology industry, and will strengthen the fair use doctrine. While the technology IP world may have hoped for a definitive answer to the question whether APIs are copyrightable, in our view the Court exercised wise restraint in declining to go farther than necessary to resolve this case. The pace of technology change, and the ever-changing environment of the Internet, are powerful reasons not to make hard and fast declarations about what is “creative” and thus entitled to copyright protection as opposed to what is “merely” functional. Going forward, such questions will likely remain highly fact-intensive and require cogent application of those facts to law and precedent by competent IP counsel.