Oracle wants damages against Google between $1.4 and $6.1 billion - yes that's billion! What does this mean for Android developers?

Speculation about the actual sums of money involved in Oracle's claim against Google for Android patent infringement is over - it is seeking damages between $1.4 and $6.1 billion. Google considers this out of proportion and that the calculations they are based on are seriously flawed. However, according to Google's 2010 filing with the US Securities and Exchange Commisson it has $10 billion in ready cash and equivalent and this puts the demand into a better focus.

Judge Alsup's latest move in this ongoing and protracted legal wrangle was to order Google to make public parts of a court filing originally made on June 6, 2011 that contains details of Oracle's damage claims. Google complied with that order on Friday. As a result we can read the complete unredacted version of the filing and discover not only the figures involved but Google''s objections to how they have been calculated.

The June 6 filing was intended to expose serious flaws in the way that Oracle's expert, Iain Cockburn, had calculated the claim for damages and to ask:

"leave to file a Daubert or other motion directed at the damages report"

 the Daubert is a rule on the admissibility of expert testimony which if granted would mean that Iain Cockburn's evidence would not be heard by the trial jury.

What the document reveals is that, were it eventually to  lose,  Google would owe Oracle between 1.4 and 6.1 billion dollars, which it says is:

"a breathtaking figure that is out of proportion to any meaningful measure of the intellectual property at issue"

The filing continues:

"Even the low end of Cockburn's range is over 10 times the amount that Sun Microsystems, Inc. made each year for the entirety of its Java licensing program and 20 times what Sun made for Java-based mobile licensing."

and then states:

"Cockburn's theory is neatly tailored to enable Oracle to finance nearly all of its multi-billion dollar acquisition of Sun, even though the asserted patents and copyrights accounted for only a fraction of the value of Sun."

After explaining that Cockburn is demanding a 50% royalty on all of Google's revenue on all Android devices worldwide, Google sets out its case for concluding that:

Cockburn's legal errors are fundamental and disqualifying, and allowing him to testify about his conclusions to a jury would prejudice Google.

Here are the four arguments it advances:

First, Cockburn has no basis for including all of Google's revenue from Android phones into the base of his royalty calculation. The accused product here is the Android software platform, which Google does not sell (and Google does not receive any payment, fee, royalty, orother remuneration for its contributions to Android).

Second, Cockburn includes Oracle's "lost profits and opportunities" in his purported royalty base.

Third, after improperly inflating the base of his royalty calculation, Cockburn proceeds to apply an unprecedented fifty percent royalty rate to that base through use of improper short-cuts.In contravention of long-settled precedent, he fails to tie his royalty rate to the value of the patented technology actually at issue in this case

Fourth,Cockburn cavalierly asserts that infringement of a single claim of a single patent would result in the same multi-billion dollar award as infringement of all of the asserted claims

It is worth noting that the Judge acted swiftly to grant the request, i.e. he has allowed Google to file yet another motion, but stipulated that:

Counsel must make a strenuous effort to keep the length of the briefs and the volume of the record to a minimum. 

Although both sides are acting as if there is going to be a trial within a few months this is by no means certain - it may be postponed pending the re-examination of the disputed patents by the U.S. Patent and Trademark Office and this could introduce yet more delay.

At the moment the case seems to be creating plenty of work for lawyers.

But what about the developer community - how should we respond to this unfolding scenario?

Probably full steam ahead with Android projects. Even if Google does end up shelling out billions it is isn't going to do much to halt its progress. A dispute that originally seemed to be about issues such as control of Java with a possible impact on the technology that makes Android possible, seems to have come down to nothing more than money - and money Google can probably afford to pay in the unlikely event it loses big time!

Previous articles:

Oracle sues Google for Android Java use

Google v Oracle - progress at last?

Further moves in Oracle versus Google lawsuit

Judge losing patience with Oracle v Google?