US Supreme Court Weighs In on Copyright Fair Use Provision for Computer Code

A 10-year court saga has come to an end with the U.S. Supreme Court’s ruling in Google LLC v. Oracle America, Inc. In a 6-2 decision, the Supreme Court has ruled that Google’s use of Oracle’s software code in developing the Android operating system constituted a fair use under §107 of the Copyright Act.

In 2005, Google acquired Android, Inc. to develop a software platform for mobile devices including smartphones. Shortly after acquiring Android, Google began talks with Oracle to license the entire Java platform for use in its new smartphone technology. However, negotiations between Google and Oracle broke down. Google proceeded to develop the Android OS using code from Oracle’s Java SE program without a license. In creating the Android platform, Google copied approximately 11,500 lines of a total of 2.86 million lines of application programming interface (API) code from Oracle’s Java SE program.

Oracle sued Google in the Northern District of California in 2010. The jury found that Google’s use of Oracle’s code constituted copyright infringement but was deadlocked on whether or not such use of the code fell under the fair use exception of the Copyright Act. Under copyright law, “fair use” is a defense that can be asserted in cases where copyright infringement otherwise would be found. The District Court judge then decided that the code used by Google was not subject to copyright protection (as a matter of law), thus overruling the jury’s finding of copyright infringement by Google.

Oracle appealed the District Court ruling to the Federal Circuit which reversed the District Court ruling, finding that the software code at issue was copyrightable and remanded the case for another trial to address the question of whether Google’s unlicensed use of the code amounted to fair use.

On remand, the District Court jury found that Google’s use of Oracle’s software code constituted fair use. Oracle again appealed to the Federal Circuit which reversed the District Court, ruling that while deciding the facts of the case was for a jury to determine, whether or not those facts constitute “fair use” is a question of law. The Federal Circuit ruled that those facts did not constitute a fair use by Google and remanded back to the District Court.

Google petitioned the Supreme Court for a writ of certiorari, for review of the Federal Circuit’s determination as to copyrightability and fair use. The Supreme Court granted this petition.

While the Copyright Act simply defines a “computer program” as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result” and makes not distinctions as to the type of computer program involved, the Supreme Court took care to delineate between different types of software code and limited its analysis and decision to the particular code which Google copied. In this case, the type of code that Google copied form the Java SE program is called declaring code which is one type of code used to create the API of the Java SE program. While the Supreme Court went into a lengthy discussion of the differences between “implementing code” and “declaring code” involved in an API, Justice Breyer’s majority opinion, however, framed the question before the Supreme Court as follows “[w]e shall assume, but purely for argument’s sake, that the entire Sun Java [Oracle] API falls within the definition of that which can be copyrighted. . . [and] We shall ask instead whether Google’s use of part of that API was a ‘fair use.’” Justice Breyer explained the Court’s reasoning for not addressing the copyrightability of the API as follows: “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.” The Court held that the issue of “fair use” is a mixed question or law and fact, leaving the factual determinations to the jury with the ultimate question of whether those facts show fair use up to the judges to decide. The Court then proceeded with its fair use analysis of Google’s copying.

§107 of the Copyright Act sets forth the fair use doctrine as: “[i]n determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—(1) the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” The Court addressed each factor separately, finding each factor favored Google.

As to the nature of the copyrighted work, the Court held that all the code copied by Google was “declaring code.” The Court addressed the first factor: the purpose and character or the use. The Court considered whether or not Google’s copying adds something new to the copyrighted work. In order to determine this, the Court looked to see if Google transformed the copyrighted work, i.e. the declaring code, by examining the copying’s more specifically described purpose and character. The Court determined that Google’s purpose for using Oracle’s API code was to create new products, e.g. a smartphone operating system, and to provide “a new collection of tasks operating in a distinct and different computing environment.” Thus, the Court determined that Google did in fact transform or reimplement Oracle’s Java SE API code.

Regarding the amount and substantiality of use factor, the Court focuses on the several million lines of code that Google did not copy, rather than the 11,500 lines that Google did copy. The Court notes that this factor ‘will generally weigh in favor of fair use where, as here, the amount of copying was tethered to a valid, and transformative, purpose.” The Court found that the lines of code that Google did copy were tethered to the valid and transformative purpose of permitting programmers to make use of their knowledge and experience of using Oracle’s API code to develop new programs for smartphones with the Android software platform. 

Lastly, the court looked at the effects of Google’s copying in the “market for or value of the copyrighted work.” Here, the Court not only looked at the amount of potential lost revenue suffered by Oracle, but also the source of the loss and the public benefits the copying will likely produce. The Court looked at the trial evidence, which showed that Oracle was poorly positioned to succeed in the mobile phone market as previous efforts to move into the market were unsuccessful. The Court therefore found that given the uncertain nature of Oracle’s ability to compete in Android’s marketplace, the sources of it lost revenue, and the risk of creativity related harms to the public, and found that the market effects weighs in favor of Google. This is a curious finding, as Oracle presented evidence of its lost revenues as a result of Google’s actions.

In conclusion, the Court decided that Google implemented the API code it copied, taking only what was needed to effect a new and transformative program, and therefore Google’s use of Oracle’s API software code was a fair use.

Justice Thomas filed a dissenting opinion and states that the majority’s fair use analysis is fundamentally flawed for failing to address the question of whether or not the software code at issue is protected by the Copyright Act. The dissent asserts that Oracle’s code at issue is in fact copyrightable and that Google’s use of that copyrighted coded was anything but fair. The dissent notes that the majority’s reliance on the distinction between declaring code and implementing code is not supported by the Copyright Act and that the fact the majority did not consider the fair use factors in sequential order or in order of importance are telling of the majority’s flawed analysis.  

Based on the majority decision of the Court, it appears that the definition of “fair use” may be more liberally applied than in the past. This decision may signal a re-prioritization of the fair use factors in analyzing fair use of software code. The fact that the Court decided to focus on the nature of the copyrighted work first and used the result of that analysis in proceeding through the remaining fair use factors seems to indicate that the nature of the work is the most important factor when it comes to the fair use of software. This would be in contrast to past fair use rulings in which the market effects factor and the purpose and character of use factor were the two most important factors. On the other hand, there is a new line of fair use cases in the Federal Circuits that may force the Court to revisit this issue yet again. There is also the fact that the Court made it a point to say that the ruling in this case applied only to the specific code used by Google and that the ruling did not overturn or modify any earlier cases involving fair use. At the very least, fair use remains one of the most unpredictable aspects of copyright law and this decision is likely to have a significant impact on the tech community.