Officially titled consequences of the case. I actually have my own subtitle, which is copyright and the future of the industry. Im absolutely to have patton of the fast institute to talk to us about the legal and commercial issues that are raised by this case. My name is adam mossoff. Im a senior fellow at the hudson institute. And im the chair of the newly constituted forum for intellectual property at the hudson student. This is our inaugural event and were delighted to have it on such an important issue and such an important speaker. We will be hosting events and promoting datadriven fact base research that explores and investigates the important and key roles that intellectual property plays and not just driving the u. S. Economy for the past 230 years but all innovation economies throughout the world creating the foundation for flourishing societies. And we hope to play an active role in insuring that factbased research and datadriven studies are in the hands of our policymakers as they consider the very important issues such as the decision that has to be made and legislation that has to be considered before congress and regulation that has to be aadopted by our agencies. Im very delighted to have as our speaker today tim wilson director at patents at the south institute. I would like to emphasize that we are both speaking on our individual capacities and not on behalf of our respected institutions. Normally, i do not give large or long introductions of people. If you wish to discover all of mr. Wilsons incredible accolades and achievements over his multidecade career embrace our mobile revolution. Choose the browser of your choice, the Search Engine of your choice whether bing or google, and you find all that you wish about about tim wilson. But thank you, tim for being here today. My pleasure. Thank you. So i wanted to kick off our discussion before we Start Talking about the goole v. Oracle case, many people may not have heard about the fast institute and may be wondering what is this organization . And why are you talking about this case from the perspective of your work at the fasts institute so could you please tell us a little bit about your company . Sure. Fast is a largely Held Software Company in cary , North Carolina which is about an hour from here. And we have been in the Software Business since before there was a Software Business back in 1976 we were founded but actually have our roots going back into the 1960s. And the problem that fast was trying to solve was to determine patterns in data that you couldnt see with the human eye or people couldnt perceive, statistics, analytic, Artificial Intelligence all those things that sas is best at developing. And so we have about 14,000 employees around the world now. And so we have about 14,000 employees around the world now. We are, you know, like i said, a large a large Software Company. We call it a proprietary Software Company. So that is a company that we actually make money directly from our software and our customers are happy to to participate with us and it helps us develop our Software Going forward. Also kind of interestingly, you know, apropos about this case is that we have a a. P. I. Which is the main way that our software is interacted with by our users. And so they create programs and that tells the computer kind of what to do, and its very useful to have those be easy to understand and used by our users. And that has really been one of the major reasons that sas has been successful at becoming a big Software Company and one of the reasons this case is very important. And the case centers around an a. P. I. , for the nontech geeks in the audience or who may be watching by live stream it stands for Application Program interface. So what it actually means, i think in a technical sense is it kind of a shorthand ways to refer to and access big blocks of computer code. Any of the kind of programmers in the audience, might know the various generations of software has been kind of first generation system. Second generation systems, Third Generation systems. A. P. I. Is kind of referred to as the fourth generation system, where were not actually programming, you know, a programming language like c. But were programming the system in big blocks of code. Its really an important and modern way to interact with the code. All right. Im sure well dig into some more details in your remarks. Were going to have a moderated back and forth between us to lay the foundation and what the case is about and policy issues and well open it up for questions for the audience in about 20 or 30 minutes. March 24, the Supreme Court will inhearing oral arguments what is now styled google v. O racle. Oogle in as oracle v g when oracle first sued them for 2011. Copyright infringement. It is centered around this little device that i hold up. I used to refer to this as my infringing device when i would talk at patent conferences because its the samsung and android device. Now, i can refer it to as my infringing device. It is multiple levels of infringement. Can you give us some of the relevant background here and why im making these references . Sure. Awesome. Back in the 1990s, java was created by sun micro systems as a new very Popular Software development, you know, programming system. And sun was later sold to oracle. And so thats how we got kind of this case, you know, in style as oracle being the main actor here. So the main strength of java, i think is that you could write your code once and run it anywhere. And that was the main thing that java gave to us that that we didnt have before in the marketplace. And it was really a useful feature. And at the same time what was happening or at least a little later, we saw the rise of the smart phones, right . We saw the iphone come out in 2007, i believe, and that really was for a company like google or something that they had dominated obviously, the search on the p. C. Platform. And you know, kind of the computer. But we had this new platform out there that the folks who were kind of really thinking about this issue said well, this changes everything. And that was the smartphone. And so you know, what we saw were was this platform that java had created or that sung had created that allowed you to run on any platform. And that includes the smart phones in smart phones they had their own version of java. I think think it was called java s. E. That was a popular way to create apps on this smart phones. I guess around that time, google acquired a Company Called android. And many people dont remember that android was not actually google in the beginning. That was something google thought, this is the way we are going to go into the smartphone business and of course when they they didnt know that it was not complete or was not as good as they thought it might be and so they were at the same time hedging their bets and sun,g we want to license or we want to license java as tol as another alternative getting into the smartphone business. Ofhink kind of the evidence the case has shown that the with kind of wrote down sun over the fact that, you know, sung made their job a java platformeir open and available for free to use. But you had to agree to kind of the open source model. Which is if you use the code, youre going to have to then you know, dedicate your code. Or follow the open model. And google didnt want to do that. And so they didnt want to kind of give away their their version of what they create using java. And so talks broke down. And you know, everybody tpwhue everybody knew what that meant, right . They werent going to use java except thats not what actually google did. They made the decision that it would be more expeditious to copy some of what was in java. And to instead of designing their own they just decided that they were beginning to take it. So, thats kind of the you know, the background of the dispute. They were actually in talks. Java was made available to companies. I think there were three different types of license that you could take. One of them was the open model. Another was a fully proprietary model, and you had to pay for that. So i think there were Business Decisions that were being made on both sides obviously. But you know, it was google that kind of knead business decision that they werent going to license java under the model that was offered. Were there alternatives . Could google come up an come up with an an alternative if they wanted to . Well, that is kind of the crux of this case, right . If google wanted to do it why , could they have done it . One of the arguments google was, it was impossible or nearly so impossible for them , once they had adopted the fact that they are going to use java, to come up with their own version. Is demonstrably false. Out throughame discovery but there was a very famous and important statement internally from a google engineer, tim lynde home. Who said at google that time. ,hat we have been asked to do referring to the founders and ceo of google at the time, is to investigate what technical alternatives exist java. We have been over a bunch of these and we think they all suck. We need to negotiate. Tim just described the licensing negotiations broke down. You mentioned they just took the code. How much code did that copy . Did they copy . Googles undisputed by that what they copied were oraclesnes of copyrighted code. Its interesting. Because you can say well, that doesnt seem like much in the context of maybe millions of lines of code that you might have in a smartphone. But you know the issue is not just the lines of code. Its how theyre organized. Its all about the Creative Processes that go into coming up with a system of you know, of code. That that actually works for the users. That many things folks miss is, google wasnt just copying the code to get to code. What they were copying the cold the code for was to get the programmers. Because if you learned how to work with the java programming language and you were a, you know, good developer, and now, all of a sudden, you are faced with a new programming language that you to relearn, that is a transaction cost and you have to decide, do i want to learn how to program in the android operating system thats different than the java that i actually have spent a lot of my time learning and figuring it out. What google wanted to acquire was not necessarily the java code but it was the java programmers. So thats kind of an interesting spin on what googles intent was here. They were like copying a book because theres a established fan base for that book. Yeah, its like the copy of the white album, right . We didnt copy the white album to get the white album music. What we did was we wanted the fan base. Earlier we were talking about the danger mouse remixing the white album. The reason he picked the white album was because it was the white album. He could have picked some garageband that no one had heard of then he wouldnt have had the , fame and the immediate access to fans that he had by mixing the white album. At the time, java was one of the most, you know, popular programming languages in the world. And so this was you know, this was a choice that they made that was, you know, something that brought the group of programmers to the platform. Remember what google was really competing with, i think, as a business at least in their minds was na the iphone was out there. Was that the iphone was out there. And the app store and the iphone was out there. We need to create an app store for android. So that means that we have to create a platform that developers are going to be attracted to. Speaking personally, i actually had the very first motorola Android Phone the one with the slideout mechanical keyboard. They licensed android from star wars, lucasfilms. I remember distinctly that device. I did not understand that i was carrying an infringing device in my pocket at the time. Google because oracle sued google for copyright infringement. Just quickly, what happened through the past 11 years that this ended up as a google v oracle. Sure. 2010 based google in on patent and copyright infringement. The patents were out of the case pretty quickly and it went to a jury trial and the jury decided that google infringed the copyrights. They split on the issue of fair decision washat first appealed to the federal Circuit Court of appeals here in washington. Because of the fact that they were patents. Where the decision went. The declaring code and the structure seeks an organization of the packages entitled to copyright protection and therefore, they reversed this court and sent it back for a new trial on fair use. Back to they went District Court and decided fair use. That of course went to the jury and the jury this time found that it was excused by fair use. Now, we get a second appeal to the court of appeals for the federal circuit. Arguinge, oracle was that the fair use was not inappropriate decision and they again reversed and said that googles use of java api packages was not there as a matter of law. Law decided as a matter of that the use was not fair. It was a commercial use. It was a competing use. It was not a fair use. So now google has appealed to the court and this is a significant case, because of the two questions the Supreme Court has granted on copyright ability and whether the copying is counts as fair use. This will be the first time the Supreme Court has ruled on profitability. This will be the first time the Supreme Court decides the bounds of that statue. And the fair use decision has been a long time since the last time we had a fair use probably since the 1990s. Tim i mean, copyright has been a really static body of law. I think everybody and including, you know, if you look at some of the evidence in the case, you know, from the District Court. You know that that google knew what they were doing, right . They knew that they needed a license for their use of java. And they did not get one. Adam yeah. And if so a commercial benefit, the right for creating a competing product it would seem , at least within his stake which is copying a small fraction of an article when teaching my class. If i immediately find something that i think is relevant and and vicinity decided to incorporate this permanently into my teaching materials. It just came out recently. I might take a paragraph and put it there. Im not competing but if i continue to use it, i would have to get a license. Anything remarkable that happened in the trial that the audience should be made aware of . Anderms of the facts foundations happening at the Supreme Court . Tim yes, there was lots of evidence that was excluded by the judge in the trial. You know, the the kind of the big things were that they excluded evidence that android supersedes java in the markets that java occupied before, right . And so this kind of goes to the arguments that google has made of interoperatability, and it kind of goes to the point that, this is not really interoperable. You know, you think of something somethingroperable as working together, but that was not the intent of google in this case. So there was a lot of evidence whaty were actually google intended to do was kind of being a complete replacement. In fact, thats whats been born out in the market, that we now is nondroid and google se longer out there for smartphones. Its one of those things that i think probably was an important thing that was excluded. Also, you know, google argued that one of them markets that they didnt compete with java on were for, you know, this was just about smartphones. But they fully well knew that their next rollout was going to be to p. C. s and computers. And so at the time i think it was the day after discovery closed that google made the announcement that they were going to make this android as an operating system for computers. And so that evidence never kind of met kind of the review by the jury. And so i think there are a lot of things that that you know, even if the Supreme Court thinks that the fair use argument, you know, kind of is fair, lets put it this way. That we ought to be looking that at the decisions made by the District Court on exclusions of evidence that ought to go back. And we ought to be in a sense going back and retrying for a third time. The fair use issue. And i think get a fair read of all of the evidence that weve seen in the case. The s. A. S. Institute is free from the case . Tim yeah, so we have put together an amicus brief and are getting prepared to file it in the next few days. And obviously, one of the things that we talk about is really this false dichotomy that google has set up in this case that says that theres some distinction, right, between the type of code that they call interfaces. These a. P. I. s, that theres some magical distinction between Software Interfaces and software in general, which we all including google agree its copyrightable. Congress didnt write the statue that way. What Congress Said is that software is copyrightable. Full stop. Code is code. You know, its all, kind of somewhat functional because it operates a machine at the end of the day. But it doesnt mean that its not creative just because it operates on a machine. All software operates on a machine. Theres no kind of logical position where you can say that one type of code ought to be treated as not copy writeable. And another type of code should be written as copyrightable. For as much respect as we have for the judiciary, do we want judges making those fine distinctions . As i said before, there are, you know, generations of different types of software that that are out there, you know, that kind of build on one another that even under the current rubric that all of this is , protected by copyright, you know, we still see massive advances. So far the positions that we see from the folks that generally are open source folks which is philosophically a different way to look at the world. Weve had a really good Robust Software industry here in the united states. It is much more robust than many other places around