Oracle America, Inc. v. Google Inc.

Filing 925

RESPONSE (re #921 MOTION in Limine re Presentation of Financial Evidence and Testimony ) ORACLE AMERICAS OPPOSITION TO GOOGLES MOTION IN LIMINE RE PRESENTATION OF FINANCIAL EVIDENCE AND TESTIMONY filed byOracle America, Inc.. (Holtzman, Steven) (Filed on 4/15/2012)

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MORRISON & FOERSTER LLP
MICHAEL A. JACOBS (Bar No. 111664)
[e-mail]
MARC DAVID PETERS (Bar No. 211725)
[e-mail]
DANIEL P. MUINO (Bar No. 209624)
[e-mail]
755 Page Mill Road, Palo Alto, CA 94304-1018
Telephone: [phone] / Facsimile: [phone]
BOIES, SCHILLER & FLEXNER LLP
DAVID BOIES (Admitted Pro Hac Vice)
[e-mail]
333 Main Street, Armonk, NY 10504
Telephone: [phone] / Facsimile: [phone]
STEVEN C. HOLTZMAN (Bar No. 144177)
[e-mail]
1999 Harrison St., Suite 900, Oakland, CA 94612
Telephone: [phone] / Facsimile: [phone]
ALANNA RUTHERFORD
575 Lexington Avenue, 7th Floor, New York, NY 10022
Telephone: [phone] / Facsimile: [phone]
ORACLE CORPORATION
DORIAN DALEY (Bar No. 129049)
[e-mail]
DEBORAH K. MILLER (Bar No. 95527)
[e-mail]
MATTHEW M. SARBORARIA (Bar No. 211600)
[e-mail]
500 Oracle Parkway, Redwood City, CA 94065
Telephone: [phone] / Facsimile: [phone]
Attorneys for Plaintiff
ORACLE AMERICA, INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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ORACLE AMERICA, INC.

Case No. CV 10-03561 WHA

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Plaintiff,

Dept.: Courtroom 8, 19th Floor
Judge: Honorable William H. Alsup

v.

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ORACLE AMERICA’S OPPOSITION TO
GOOGLE’S MOTION IN LIMINE RE
PRESENTATION OF FINANCIAL
EVIDENCE AND TESTIMONY

Defendant.

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GOOGLE, INC.

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ORACLE’S OPP. TO GOOGLE’S MOTION IN LIMINE RE PRESENTATION OF FINANCIAL EVIDENCE AND
TESTIMONY
CASE NO. CV 10-03561 WHA

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Without offering a single case in support of its argument, Google moves to exclude all

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financial evidence and testimony from the copyright portion of the trial. However, the plain language

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of the Copyright Act and numerous decisions make clear that the financial evidence and testimony

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are relevant – to Google’s fair use defense to copyright infringement. Google’s request for a broad

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exclusion of all such evidence must be denied.

market for and value of the infringed materials. Establishing the immense value of Java technology

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reasons, including that Google’s infringement has and will have substantial adverse effect on the

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in this phase of the trial; rather the evidence is relevant to Google’s fair use defense fails for multiple

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in this case. Contrary to Google’s suggestion, Oracle does not intended to present damages evidence

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The evidence Oracle plans to offer directly rebuts Google’s contentions and alleged defenses

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as a whole - as to which the testimony will show that Sun’s and now Oracle’s copyrighted APIs

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account for a substantial portion - is relevant to this fair use factor.

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Indeed, it is disingenuous for Google to argue that presentation of financial evidence and

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testimony about Java and Sun is improper when Google itself has opened the door to this very

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evidence. From the inception of this case, to dispute Oracle’s longstanding statement that “Java is

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the foundation of Oracle’s Fusion Middleware and the single-most important software asset” the

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company ever acquired (TX 2040 at 2), Google has argued that Sun’s technology is stagnant, old, and

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had lapsed compared to what Google was offering to the market. As recently as last night, Google

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has given notice that it intends to continue this attack in its opening statement. Among the opening

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slides disclosed by Google yesterday were: a slide titled “Sun’s Failed Efforts to Build a Java

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Platform for Smartphones”, a slide titled “Oracle’s Failed Attempt to Create Smartphone”; a slide

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showing Dr. Cockburn with a text bubble containing the symbol “$0”; and statements such as “Java

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is perceived as stagnant and legacy” and “Stagnant innovation”. Google intends to put squarely at

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issue the nature of the copyrighted works, including the vibrancy of the Java community and the

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value of Oracle’s intellectual property. Granting Google’s motion to preclude all discussion of the

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value of Java would deny Oracle the ability to rebut Google’s assertion of fair use and the inaccurate

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statements in the opening.

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ORACLE’S OPP. TO GOOGLE’S MOTION IN LIMINE RE PRESENTATION OF FINANCIAL EVIDENCE AND
TESTIMONY
CASE NO. CV 10-03561 WHA

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Evidence Pertaining to Valuations and Finances May Be Proffered To
Establish Fair Use

The financial evidence about Java and Sun is, at a minimum, relevant to Oracle’s response to
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Google’s fair use defense. “‘In determining whether the use made of a work in any particular case is
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a fair use the factors to be considered include (1) the purpose and character of the use, including
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whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of
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the copyrighted work; (3) the amount and substantiality of the portion used in relation to the
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copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of
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the copyrighted work.’” Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 529 (9th Cir. 2008)

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single most important element of fair use.” Harper & Row Publishers, Inc. v. Nation Enterprises,
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(quoting 17 U.S.C. §107). The Supreme Court has noted that the fourth factor “is undoubtedly the
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471 U.S. 539, 566-68 (1985).
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“In evaluating [the fourth] factor, a court must consider not only the primary market for the
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copyrighted work, but the current and potential market for derivative works.” Gaylord v. United
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States, 595 F.3d 1364, 1375 (Fed. Cir. 2010) (citation omitted). “As a general matter, examining the
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effect on the marketability of the composite work containing a particular individual copyrighted work
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serves as a useful means to gauge the impact of a secondary use upon the potential market for or
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value of that individual work, since the effect on the marketability of the composite work will
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frequently be directly relevant to the effect on the market for or value of that individual work.” Am.
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Geophysical Union v. Texaco Inc., 60 F.3d 913, 928 (2d Cir. 1994).
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Oracle’s offer and valuation for a package of Sun’s software assets in connection with its
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acquisition of Sun is relevant to establish the value of and potential market for the Java API packages
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and source code. The 37 Java API packages are the core libraries of the Java platform, the API
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packages that developers commonly expect to use and see, and are integral to the Java platform. By
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copying the 37 Java API packages and source code, Google not only harmed the value of the Java
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API packages, but the value of Java, and the value of Oracle’s business which depended on Java.
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ORACLE’S OPP. TO GOOGLE’S MOTION IN LIMINE RE PRESENTATION OF FINANCIAL EVIDENCE AND
TESTIMONY
CASE NO. CV 10-03561 WHA

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These are precisely the “secondary” and “derivative” markets that should be considered as part of the

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fair use equation.

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Google mischaracterizes the centrality of Java in Oracle’s valuation by stating that Java was

Oracle Chief Corporate Architect Edward Screven testified at deposition that he would have paid the

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entire $7.4 billion price for Sun “just to get Java.” (Screven Dep. at 59:17-23.)

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either part of the Java business or Sun’s support services for Java users and developers.1 Indeed,

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list of the software assets to be included in Oracle’s acquisition shows that the assets considered were

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Core to Sun’s (now Oracle’s) entire business is the continued vitality of Java. A glance through the

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“only one” of “a package of software assets” considered in Oracle’s acquisition. (MIL at 2:2-3.)

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B.

Evidence of Android’s Finances Will Assist The Jury In Assessing The
Commercial Nature of Android and Android’s Impact of the Market for Java
– The First and Fourth Factors in A Fair Use Defense

17 U.S.C. § 107(1) states that “[i]n determining whether the use made of a work in any

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particular case is a fair use the factors to be considered shall include—(1) the purpose and character

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of the use, including whether such use is of a commercial nature or is for nonprofit educational

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purposes.” On its face, the Copyright Act requires the jury to consider the “commercial nature” of

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Android – which necessarily includes whether or not it is profitable and the scale of revenues it has

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earned. The revenue and profits that Google made from Android are evidence of “[t]he degree to

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which the new user exploits the copyright for commercial gain –as opposed to incidental use as part

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of a commercial enterprise – [which] affects the weight we afford commercial nature as a factor.”

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Elvis Presley Enter., Inc. v. Passport Video, 349 F.3d 622, 627-28 (9th Cir. 2003) (emphasis added)

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(rev’d on other grounds, as recognized by Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d

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1 In a footnote, Google objects on hearsay grounds (the only objection it makes) to Oracle’s proposal

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to introduce TX 2038, a letter from Oracle CEO Larry Ellison to Sun, through Mr. Ellison’s
testimony, as evidence of “the truth of Oracle’s supposed valuation of 'Java.’” (MIL at 1 n. 1.) The
objection is unfounded. The letter, which Mr. Ellison wrote on Oracle’s behalf long before the
commencement of this litigation, offered Sun $2 billion for its software assets, including Java. The
letter is not hearsay because it will not be offered for the truth of the matter asserted – the value of
Java – but as evidence that Oracle made a $2 billion offer for Sun’s software and considered the
software to be valued at least that much.

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989 (9th Cir. 2011). Determining whether the infringing use is “of a commercial nature” thus

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requires examining “the value obtained by the secondary user from the use of the copyrighted

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material.” Am. Geophysical Union v. Texaco Inc., 60 F.3d at 922. “The more revenue obtained as a

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result of an infringer's use of the copyrighted work, the less likely the use will be considered fair.”

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FMC Corp. v. Control Solutions, Inc., 369 F. Supp. 2d 539, 579 (E.D. Pa. 2005) (citation omitted).

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Deciding whether Google’s use has been fair requires the jury to assess the commercial nature

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exploitation of the copyrighted material,” part of the analysis under the first factor. Leadsinger, Inc.

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Evidence of Android’s finances will help the jury assess whether Google “stands to profit from

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factor). Excluding all evidence of Android’s revenues would impermissibly obstruct that analysis.

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of Android (the first fair use factor) and Android’s impact on the market for Java (the fourth fair use

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v. BMG Music Pub., 512 F.3d at 530 (citing Harper & Row Publishers, Inc. v. Nation Enterprises,

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471 U.S. 539, 562 (1985)). Even if the evidence of Android’s finances is not dispositive of this

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factor, it is unquestionably relevant, and Google does not muster a single citation to the contrary.

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As for the fourth fair use factor, Oracle intends to argue that the use of Android affected every

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part of the market for the copyrighted work. Mr. Agrawal’s testimony regarding Android’s market

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success – the growth in Android’s revenues and licensing – is key evidence of Android’s impact on

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the market that would otherwise be available to Java. The impact on the market of a $1 million

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business compared with a $1 billion business is obviously quite different. The jury should be able to

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hear which type of operation Android is.

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Because the financial evidence and testimony at issue directly addresses Google’s defenses

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and planned opening statement, the probative value and relevance to the evidence could not be

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clearer. Oracle should be permitted to present it to the jury. Google’s argument that such evidence

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belongs only in the damages phase is wrong as a matter of law. Oracle will not suggest that this

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evidence shows how much Oracle has been damaged; rather, that the value of Java and Android

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demonstrate that Google’s fair use defense is without merit.

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ORACLE’S OPP. TO GOOGLE’S MOTION IN LIMINE RE PRESENTATION OF FINANCIAL EVIDENCE AND
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CASE NO. CV 10-03561 WHA

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Dated: April 15, 2012

BOIES, SCHILLER & FLEXNER LLP
By: Steven C. Holtzman
Steven C. Holtzman
Attorneys for Plaintiff
ORACLE AMERICA, INC.

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ORACLE’S OPP. TO GOOGLE’S MOTION IN LIMINE RE PRESENTATION OF FINANCIAL EVIDENCE AND
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CASE NO. CV 10-03561 WHA