Thursday, June 30, 2011

Oracle Suing Google for $2.6 Billion

Oracle is suing Google for $2.6 billion over patents it says the Internet giant infringes with android, the latest development in the convoluted world of software patent litigation.

The company alleges that Android infringes on patents for Java software that Oracle acquired when it purchased Sun Microsystems, the patents' creator.


Reports recently emerged that Oracle, best known for its database software, was suing Google for "billions", but new legal documents specify the number, estimated by a consultant for Oracle named Iain Cockburn.

"Google falsely claims that Prof. Cockburn concludes that Oracle is owed anywhere from $1.4 to $6.1 billion in damages," said Oracle in a court filing. "He does not. His opinion is that the total damages that should be awarded to Oracle is $2.6 billion."

Google had previously criticized Cockburn's estimates, saying that even the lower bound of $1.4 billion was 20 times what Sun made yearly from all its mobile Java licensing agreements.

Oracle reportedly claims that it offered Google reasonable terms for licensing the patents but that the company turned them down. Google has said that it does not infringe on the patents in question, and also claims they're invalid.

This battle is just a skirmish when considering the whole of the mobile industry, which has been roiled by patent litigation recently. Virtually every major player is locked in a courtroom battle with another, with many fighting on multiple fronts. In question in many cases are software patents, which tend to be broad and subject to multiple interpretations that make them a useful tool for bludgeoning competitors.

Android appears to be a favorite target. Microsoft, which believes that the mobile platform infringes on its own patents, has been suing companies that use it in their products. Microsoft has sued Motorola, which staged a comeback on Android handsets, and Barnes & Noble, which used the OS in its Nook Color e-reader.

HTC chose to settle with the software giant rather than going to court, and now pays licensing fees to Microsoft on every Android handset it sells. Regardless of a suit's validity, defending against them is so costly that it may actually be cheaper and less disruptive to settle. That makes the suits a powerful weapon.

The tactic has strategic interest for Microsoft, harrying competitors and making a rival platform, Android, less attractive to manufacturers.

However, the patent system was created to protect innovation, not squeeze competitors. The House recently passed a bill designed to overhaul the patent process with an aim to streamlining applications and making it more difficult for so-called "patent trolls" to extort money from companies using over-broad patents. However, the new patent legislation has raised questions of its own, including accusations that it unfairly discriminates against smaller, independent investors to the advantage of large corporations.

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