Sun Microsystems offered to license its Java technology to Google for $100 million (£60 million), a Google attorney said, attempting to show that Oracle is out of touch as it seeks billions from Google for patent infringement.
Oracle and Google lawyers were in court this week for a hearing in Oracle's lawsuit accusing Google of patent infringement in its Android OS. Judge William Alsup was in a feisty mood, warning Oracle that "this court is not a wholly owned subsidiary of Oracle Corporation" and telling Google that Andy Rubin, who runs its Android business, will be "on the hot seat" at trial.
Alsup also made it clear that he thinks Google's ad revenues are linked to the value of Android, something Google contests, and that it will have to pay damages "probably in the millions... maybe the billions" if it is found guilty of infringement.
Java patent tug of war
Oracle sued Google last August, saying its Android OS violates seven Java-related patents, as well as Java copyrights that Oracle acquired when it bought Sun Microsystems.
The hearing was to hear Google's motion to have Oracle's damages expert excluded from the case. Robert Van Nest, an attorney for Google, told Alsup the expert failed to link Oracle's patents directly to his damages estimate, which Google says is between $1.4 billion and $6.1 billion (£3.74 billion).
The expert ignored that Sun offered Google a three year, "all-in" royalty licence for Java for $100 million, which Google rejected, Van Nest said. The offer was made when Google was just starting Android's development.
But if Google tried to negotiate a licence for Java, Alsup asked, doesn't that show Google knew it was going to infringe Sun's patents all along? "Tell me why there's not wilful infringement here?" he asked.
"The negotiation that took place was not a pure licensing negotiation," Van Nest replied. Google was trying to partner with Sun to co-develop Android, he said. When the talks failed, Google developed a "clean room" version of Java using technology it developed in-house or licensed from the Apache Software Foundation.
So why did Google think it needed a licence? Alsup wanted to know.
"They were negotiating an agreement," Van Nest said. "They weren't saying we need a licence to your technology. They came to Sun saying we have a product we'd like to build together. You guys have technology that might be useful, we have technology that might be useful, let's partner and build it."
Damages too high?
If Alsup was tough on Van Nest, he was tougher on Oracle. He didn't say if he'll exclude Oracle's damages expert, but he clearly thinks the upper end of his damages estimate is too high.
"There's nothing in there but a guy who's being paid $700 an hour who comes up with $6 billion. Come on," Alsup said, after making Oracle tell the court how much its expert gets paid.
Steven Holtzman, an attorney for Oracle, told the judge Oracle has done enough to show that its patent claims support its request for so called "entire market" damages.
"You can't even tell me now which claims you're going to assert at trial," Alsup shot back, "and you want me to gamble that whatever you decide on is going to meet the entire market rule? That is crazy and you're not going to get away with that."
Alsup has been pressuring Oracle to reduce the claims it will pursue at trial. It started with 132 and narrowed it this month to 50. The judge has suggested it should be two or three to avoid overwhelming the jury.
Oracle has "Google documents" which will show that it wilfully infringed Sun's patents, Holtzman said, adding that he didn't want to discuss them at a "public hearing."
That also drew Alsup's wrath. "You lawyers are not going to handcuff the public from knowing what goes on in this federal district court," he snapped. "This is not a wholly-owned subsidiary of Oracle Corporation. If Google has a memo in their files saying 'we're about to willingly infringe,' there's no way I'm going to keep that secret from the public."
Holtzman said Oracle has an email from a Google executive to Rubin, the head of Google's Android division, which he said shows that Google recognised it needed a licence for Java.
He read part of the email in court: "What we've actually been asked to do by Larry and Sergey is to investigate what technology alternatives exist to Java for Android and Chrome," the Google executive wrote, referring to founders Larry Page and Sergey Brin. "We've been over a hundred of these and think they all suck. We conclude that we need to negotiate a licence for Java."
"That's a pretty good document for you," Alsup said. "That ought to be big for you at trial."
Later he asked Google's attorney: "What do you make of this memo... to Andy Rubin? He'll be on the hot seat at trial and have to explain this email.... I agree with you it doesn't [mention] patents, but don't you think a good lawyer will convince a jury that it [refers to] a licence for patents? How do you get around that?"
"You're going to be on the losing end of this document with Andy Rubin on the stand. You think about that," Alsup continued. "And I want to say this: Wilful infringement is final. There are profound implications of a permanent injunction. I'm not saying there is wilful infringement, but that is a serious factor when you're considering an injunction."
The email was written only last year, Van Nest protested, long after Google developed Android.
"Then why were you looking for an alternative to Java?" Alsup wanted to know. Because Oracle had threatened to sue for billions of dollars, Van Nest replied, and Google was looking for another platform.
Sun execs questioned
Jonathan Schwartz, Sun's former CEO, also gave evidence to the court this week. He testified that Android did not fragment the Java platform, that it was based on technology developed by Google or licensed from the Apache Software Foundation, and that Sun welcomed it as a way to expand Java's use, according to Van Nest.
That could undermine Oracle's damages claim, which is based partly on the idea that Sun feared Android would fragment Java. "Is there a single Sun executive you have found who will come forward, who's not on the payroll by the way, and say fragmentation is terrible"? Alsup asked Oracle's attorney.
Holtzman named a former Sun executive who now works for Oracle. "But he's on the payroll !" Alsup said. "I'm talking about someone who's not on the payroll or hired on one of your retainers... The kind of people juries tend to believe."
Holtzman suggested Rich Greene, the former head of Sun's Java business, but said he couldn't be sure what he would testify.
Another part of Oracle's damages rests on its assertion that Android contributes to Google's advertising revenue. Google says that has nothing to do with the patents at issue, and notes that it gives Android away for free. That would mean Google's damages amount to "zero," Oracle's attorney protested.
"That's ridiculous and it's not going to happen, so you don't worry about that," Alsup said. "They're probably in the millions, I dunno, maybe the billions, I don't know what it is, but zero is ridiculous." Google is "totally wrong" that it's ad revenues are irrelevant to Android's value, Alsup said.
By picking holes in both companies' arguments, Alsup may have been trying to prod them toward a settlement. A three week jury trial is currently scheduled for October 31.
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