Oracle Sues Google, Wants Half of Android Ad Money

Oracle is seeking major compensation i.e. around 50% in terms of ad revenues Google generated via Android mobile operating system. These hefty demands were made in the recent filing made this week by Oracle in conjunction with the companies’ ongoing intellectual property dispute with Google.

Oracle originally filed the lawsuit in August last year, alleging that the Android platform has explicitly copied elements of Oracle’s copyrighted Java API packages.  Oracles states;

The infringed elements of Oracle America’s copyrighted work include Java method and class names, definitions, organization, and parameters; the structure, organization and content of Java class libraries; and the content and organization of Java’s documentation. In at least several instances, Android computer program code also was directly copied from copyrighted Oracle America code.

Oracle has taken the services of  Iain Cockburn, a Boston University professor to estimate the IP damages. Acording to Cockburn, if Java is found to be infringed by Android, Google would owe big time to Oracle. The actual amount of the lawsuit is not disclosed yet, but Google is aware that Cockburn has included all the Android revenues in his estimation. Oracle has an eye on Google’s ad revenue from Android. Although not explicitly stated by Cockburn, Oracle is planning to take 50% past revenue in royalty fees.

Google also made a filing earlier this week in U.S. District Court for the Northern District of California. Google’s attorney has petitioned to eliminate the damage estimates calculated by Iain Cockburn. The filing reads;

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, or other remuneration for its contributions to Android). Cockburn seems to be arguing that Google’s advertising revenue from, e.g., mobile searches on Android devices should be included in the royalty base as a convoyed sale, though he never articulates or supports this justification. The advertising services can be viewed anywhere, and are not uniquely enabled by Android.

According to Florian Mueller, Intellectual property activists, thinks that Google might be forced to restructure its business model for Android by the Oracle lawsuit. If Google lose, it might have to pay damages for past infringement as well and that might exceed what Google has made so far from Android. Mueller said;

This lawsuit has the potential to bring about a restructuring of Google’s Android business in economic as well as technical terms. Interestingly, Google itself admits that it could have done a license deal with Sun (apparently before it was acquired by Oracle) but rejected its terms. That refusal could now prove one of the worst mistakes in Google’s 13-year history as a company.

Google will be in big trouble if Oracle manages to win. Microsoft already charges $5 per Android phone from HTC, because of their patents. If Google will be forced to pay Oracle royalty and compensate the past damages, Android might not be able to stay free.

Have a look at the Public Version of Google Filing Re. Oracle Damages.