Possible copyright implications for Software Development ahead of the Supreme Court case google versus oracle. Thats an institute hosted this event looking at the history of copyright protections and the importance of code being protected by copyright laws. Its an hour ten minutes. All right. I believe we will now begin. Thank you all for coming to our event today on google versus oracle case. Officially titled consequences of the case here i actually have my own subtitle, which is copyright in the future of the Software Industry. Very significant case and absolutely delighted to have adam mossoff here to speak to us today about the relevant legal policy in commercial issues that are raised by this case. My name is adam mossoff and i am a senior fellow at the Hudson Institute and also now the chair of the newly constituted forum for intellectual property at the Hudson Institute. This is, in fact, our inaugural event and so were delighted to have it on such an important issue and with such a great speaker. The forum will be hosting events sponsored and promoting datadriven factbased research that explores and investigates the importance and key will the intellectual property place and not just driving the u. S. Innovation economy for the past 230 years, but all innovation economy the world creating the foundation for flourishing societies. We hope very much to play an active role in ensuring that factbased research and datadriven studies are in the hands of our policymakers as they consider the very important issues such as decisions that have to be made in important cases at the Supreme Court and legislation that has to be considered before congress and regulations that would be adopted by our agencies. So as i mention im very delighted and happy to our speaker here today, tim wilso, director of patterns at the Sas Institute. Would like to emphasize that we are both speaking in her individual capacity only and not on behalf of our respective institutions. Normally i do not give large or long introduction of people. If you wish to discover all of his 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 being or google and you can find all that you wish about tim wilson. But thank you for being here today. My pleasure, thank you. I wanted to kick off our discussion before we start talk about the google versus oracle case. Many people may not have heard the Sas Institute may be wondering what is this organization and why are you talking about this case from the perspective of your work at the Sas Institute . Can you tell us about your company . Sure. We are a large privately Held Software Company in North Carolina which is about an hour flight south of here, and we have been in the Software Business since before the really was a Software Business back in 1976. We were founded but actually have our roots going back into the 60s. The problem that sas was trying to solve was to determine patterns in data that you couldnt see with the human eye, or people couldnt perceive statistics, analytics, Artificial Intelligence, all of those things that are things that sas is kind of best at developing. And so we have about 14,000 employees around the world now. We are, like i said, 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 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 an api, whats knn as an api today, that 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 apis be easy to understand and used by our users. And that has really been one of the major reasons that sas has been very successful at becoming, you know, a big Software Company and one of the reasons why this case is very important. And the case centers around api. For the nontech geeks in the audience who may be watching this finalized in, api stands for application programming interface. So what it actually means, i think, in a in a technical sen, it kind of is a shorthand way to refer and access big blocks of computer code. Any of the kind of programmers in the audience might know the various generations of software, you know, has been kind of first Generation System, Second Generation system, thirdGeneration System. Api are kind of, you know, referred to as the fourth Generation System where were not actually directly programming, you know, in 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 more of these details in your remarks. We will have a moderate back and forth between us to lay the foundation of what the case is about and policy issues, and then well open it up to questions from the audience in about 20 or 30 minutes. March 24 the Supreme Court will be hearing oral arguments in what is now styled google v. Oracle. It began actually as oracle versus google back in 2011, when oracle first sued google for copyright infringement. The case is really centered around the rise of this device i help up. I used refer to this as my infringing device when i would talk at conferences, the Samsung Android device and now refer to it as my infringing device because oracle versus google case as well so its multiple levels of infringement. Can you give us relevant background here to the case and why im making these references with my smartphone . Sure. Back in the 1990s java was created by Sun Microsystems as a new, very popular Software Development, you know, programming system. Son was later sold to oracle, and so thats how we got kind of this case styled as oracle being the main factor 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 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, something that they dominated obviously, the search on the pc platform and 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 smart phone. And so, you know, what we saw was this platform that java had created, or that sun had created that allows you to run on any platform. Well, of course, that included smart phones and in smartphones than their own version of java. I think it was called java se and so that was a popular way to create apps on these smart phones. And so, you know, i guess around that time, google acquired a Company Called android, and many people dont remember that android wasnt actually google in the beginning, right . And so that was something that i think google thought, well, this is the way were going to go into the smart phone business. As potentially another alternative to get into the smartphone business and i think, you know, kind of the evidence the case has shown that, you know, that the talk kind of broke down with sun over the fact that sun made their made their job a platform 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 also follow the open model, and google didnt want to do that. And so they didnt want to kind of give away their version of what they create using java. So talks broke down and, you know, everybody knew what that meant, right . Was that they werent going to use java except thats not what actually google did. They made the decision that it would be more expo dishes to copy some of what was in java and to, instead of designing their own, they just decided that they were going to take it. So thats kind of, you know, the background of the dispute. So they were actually in talks so that java was made available to companies and to developers . I think there were three different types of licenses that you could take from java, from sun. One of them was the open model, another was, you know, a fully proprietary model and you had to pay for that so i think, you know, there were Business Decisions that were being made on both sides, obviously, but you know, it was it was google that, you know, kind of made the business decision that they werent going to license java under the model that was offered. And were there alternatives . Could google have come up with some alternative if it wanted to . Well, you know, thats kind of one of the cruxes of this case, right, was, well, you know, if google wanted to do this, could they have done it . And one of the arguments that google has, you know, kind of proffered is that, you know, it w was it was impossible or nearly so i am impossible for them to, once they have adopted, you know, the fact this theyre going to use java to come up with their own version and that, i think is demonstrably false. In fact, yes, it came out in t the through discovery, but there was a very famous and important statement internally from a google engineer, tim windholm who said quote, what weve actually been asked to do, referring to larry page and sergei brent, founders and president and ceo of google at that time, what for android and chrome. Weve been over these and we think they all suck and we think we need to jafva as we need. And licensing broke down and they took the code. How much code did they copy, did google copy . So its undisputed by google that what they copied were 11,500 lines of oracles copyrighted code. Its interesting, you know, you can say well, you know, thats that doesnt seem like much in the context of maybe millions of line of code that you might have in a smartphone, but you know, the issue is, its not just the lines of code, its how theyre organized, its all of the Creative Processes that go into coming up with a system of, you know, of code that actually works for the users, right . Because, you know, i think one of the things that many folks misses is google wasnt just copying the code to get the code. What they were copying the code for was to get the programmers because if you learned how to work with the java programming language and you were a good developer and now all of a sudden you are, you know, kind of faced with a new programming language that you have to relearn, that is, you know, kind of a transaction cost that you have to decide, well, do i want to learn how to program in this android operating system thats different than the java that i actually have spent a lot of my time learning and figuring out . And so what google wanted to acquire was not necessarily the java code, but it was the java programmers and so thats kind of an interesting, you know, spin on what really googles intent was here. Like copying a book because theres an established fan base for that book. Yeah, its like the copy we talked about this before, 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 remixing the white album. The reason you picked the white album, it was the white album. You could have picked a garage band, but you wouldnt have the fame and immediate access to fans that you had by remixing the white album. At the time java was one of the most, you know, kind of popular programming languages in the world and so this was, you know, this was a choice that they made that was, you know was something that brought that group of programmers to the platform because remember what google was really competing with, i think, as a business, at least in their minds, was that the iphone was out there. And the app store and the iphone was out there, and we needed to create an app for for android and so that means that we had, you know, we have to create a platform that developers are going to be attracted to. I speaking personally, i actually had the very first motor rolla phone, the one with at mechanical slideout keyboard and they licensed android star wars from lucas films and i didnt realize i was carrying an infringing device in my pocket at that time. And so, it was oracle v google because oracle sued google for copyright infringement. So quickly what happened through the past 11 years of litigation, and its google the oracle, and google is appealing to the u. S. Supreme court. Sure, so oracle sued google in 2010 based on patent and copyright infringement. The patents were out of the case pretty quickly and it went to a jury trial and the jury actually decided that, you know, that google infringed the copyrights. They split on the issue of fair use and so that decision was first appealed to the federal Circuit Court of appeals here in washington because of the fact that there were patents in the case. This is with are that decision went. The cafc said that the declaring code and this is kind of out of the case, the declaring code and the structure of defense and organization of the api packages are entitled to copyright protection and therefore, they reversed the District Court and sent it back for a new trial on fair use. So then they went back, back to the District Court and decided fair use. Now, that of course went to the jury and the jury this time found that it was excused by fair use, right . So now we get a second appeal to the court of appeals for the Second Circuit and this time ar oracle was arguing that fair use was not an appropriate decision for the jury and casc again reversed and said that googles use of java api packages was not fair as a matter of law, right . And so they decided as a matter of law that the use was not fair, it was a commercial use. It was a competing use. It was not a fair use. And so now google has appealed to the Supreme Court and this is a significant case, right, because the two questions the Supreme Court granted review on is the copy rightability of api. And whether this copying of the api if its copyrighted is fair use. When was the last time the Supreme Court heard a case on the copy right ability of a Software Program . Im not aware. This will be the very first time the Supreme Court has ruled on the copyright ability of the Software Programs. The congress in 1980 amended it and said that code is copy rightable and this is the first time that the Supreme Court decides the bounds and its been a long time since weve had a fair use ruling, probably since the 90s, i think with copy right has been a really static kind of body of law. I think everybody and including, you know, if you look at some of the evident in the case, you know, from the District Court, you know that google knew what they were doing, right . They knew that they needed a license for their use of java and that they intentionally didnt get one. Yeah. So again, commercial benefit, right, for a competing product and would seem at least on its face not on the scope of what typically fair use and copying a small section of the article of use, for use in teaching a clans class, for instance, if i teach something that i think is relevant and havent incorporated this permanently and it came out recently and might take a paragraph and put it in there. Im not competing with it, but if i continue to use it i would have to get a license. All right, so anything remarkable that happened in the trial that the audience should be made aware of, understanding the facts and foundations of whats happening in the Supreme Court . Yeah, there was actually lots of important evidence, i think, that was excluded by the judge in the trial. You know, the you know, kind of the big things were that they excluded evidence that android superce supercedes java in the market they occupied before so this kind of goes to the argument that google has made for interoperability and kind of goes to the point that this is not really interoperable. You think of something being interoperable as working together. That was not really the intent of google in this case and so, you know, there was a lot of evidence that, you know, that they were actually, what google intended to do was kind of be a complete replacement and in fact, thats whats been born out in the market is that we now have android and google se is no longer out there for smart phones. So its one of those things that i think probably was an important thing that was excluded. Also, you know, google argued that, you know, one of the markets that they didnt compete with, with java on were for, you know, this was just about smart phones, but they fully well knew that their next rollout was going to be to pcs 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 all, android available as an operating system for computers and so that evidence never kind of never kind of met, you know, kind of the review by the jury and so i think there are a lot of things that, you know, e