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Trump Jilts Google in Copyright Dispute at Supreme Court

The Trump administration has urged the Supreme Court to stay out of a long-running copyright dispute between Google and Oracle Corp., dealing a considerable blow to Google’s efforts to avoid an $8 billion damages award.

At issue in the dispute, billed as the copyright fight of the decade, are software interfaces called API declarations, which are shorthand commands that facilitate prewritten, complex computer functions. Google used a trove of Oracle-owned Java API declarations when building its Android smartphone operating system.

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“[Google] copied 11,500 lines of computer code verbatim, as well as the complex structure and organization inherent in that code, in order to help its competing commercial product,” the Trump administration’s legal brief reads. “The record demonstrates, moreover, that [Google’s] unauthorized copying harmed the market for [Oracle’s] Java platform.”

Sun Microsystems originally developed the contested API declarations. Oracle acquired Sun in 2010. Shortly thereafter, Oracle sued Google in federal court for patent and copyright infringement, saying Google impermissibly copied the API declarations. Years of litigation followed.

Now before the Supreme Court, Google questions whether APIs are copyrightable in the first place. The federal Copyright Act provides that protection does not extend to “methods of operation.” In Google’s view, APIs are a method of operation because they help developers access prewritten, complex functions.

“The Java API declarations simply tell developers how to access the prewritten methods to perform tasks carried out by the implementing code,” Google’s petition reads. “In that respect, the declarations are analogous to a set of rules developers are trained to follow when writing programs in the Java language. If the rules were changed, the prewritten methods would not work. For that reason, the declarations are necessarily part of the method of operating the libraries of prewritten code.”

The Trump administration disagreed, saying APIs do not count as a method of operation simply because they perform a function.

“Although there is a sense in which all computer code could be described as a method of operating a computer, the Copyright Act as a whole makes clear that computer programs can be protected by copyright, refuting any suggestion that the functional character of computer code suffices to bring it within [the Copyright Act],” the government’s brief reads.

The Supreme Court gives the federal government’s views great credence when, as here, the justices ask for its guidance about whether to take a case.

However, Google contends the federal appeals courts are split as to whether copyright protections reach software interfaces like APIs. The Supreme Court justices are much more likely to take a case featuring a question of law over which multiple courts disagree.

Google prevailed at the case’s first trial in 2012. A jury deadlocked over Oracle’s claims, prompting the judge to sign with Google. The U.S. Court of Appeals for the Federal Circuit, a specialized court for patent appeals, reversed that decision and ordered a new trial in 2014.

Google appealed the Federal Circuit’s ruling to the Supreme Court, but the justices turned the request down in 2015.

A second trial followed in 2016. A jury sided with Google, finding fair use protected its reliance on the API declarations. The Federal Circuit overturned that verdict, ruling Google had not engaged in fair use. It returned the case to a lower court for a trial on damages.

That decision is now pending before the Supreme Court. On April 29, the justices asked the Trump administration to weigh in on the petition.

The case is No. 18-956 Google v. Oracle America.

COLUMN BY

Kevin Daley

Kevin Daley is a legal affairs reporter for the Daily Caller News Foundation. Twitter: @kevindaleydc.

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Are Markets Ruining Video Games? Or is intellectual property the real culprit? by MATTHEW MCCAFFREY

Capitalism is ruining video games. So says game producer Lorne Lanning, creator of the Oddworld series, who recently sparked controversy by blasting economic developments in the gaming industry.

Lanning blames “capitalism” for gaming’s recent financial and artistic troubles, especially its emphasis on commercial success over artistic creativity. His basic claim is the same one levied against the film industry: major studios have been squeezing out their smaller competitors, taking advantage of market dominance to produce an endless stream of big-budget, artistically uninspiring sequels and spin-off franchises.

It’s unclear what Lanning (or anyone, really) means by capitalism, but he seems to be condemning the largely corporate world of game design and marketing. For instance, he mentions bureaucratic corporate structure, the quest for constant growth, and the need to appeal to mass markets as problems undermining the industry.

Several criticisms have been raised against Lanning’s claims.

First, he mainly seems upset about declining demand for the kinds of games he likes, so his arguments may be little more than sour grapes.

Second, markets produce to satisfy consumer wants, so if the artistic quality of games is low, isn’t that the fault of consumers’ tastes, rather than the market itself?

Third, without markets, there wouldn’t be a gaming industry. Markets increase productivity and make leisure possible, which in turn allows for the production of leisure goods like video games.

While there’s some truth to these criticisms, it’s important not to dismiss Lanning’s views as run-of-the-mill anti-market bias. In particular, we shouldn’t assume the game industry is a poster child for consumer sovereignty and healthy economic competition. In fact, what Lanning objects to sounds more like corporatism in the game industry than unregulated commerce; if so, it’s misguided to respond by defending game developers as heroic entrepreneurs or appealing to the wonders of the free market.

Lanning’s complaints may be justified, though he has misdiagnosed their cause: it’s actually regulation and a lack of markets that are hurting the game industry.

As it happens, major game studios have developed in ways we expect from firms artificially protected from competition: they’ve become less innovative, more risk-averse, and more focused on short-term gains. As Lanning puts it, in the gaming world, it’s not personalities and it’s not companies. It’s capitalism. So you get that [large] scale and now it gets more ruthless. These are public companies. This is Wall Street.

The analogy to Wall Street is telling, because the finance industry is at the heart of our heavily regulated and monopoly-privileged economy, and is probably the best example of what happens when government helps to eliminate market competition.

But what kind of intervention could be hampering competition in the gaming world?

One culprit is intellectual property (IP) law, which produces exactly the kind of problems Lanning is complaining about. Major studios spend a lot of money developing their IP, which they often license jealously. A case in point: Nintendo takes 40 percent of the ad revenue from YouTube videos featuring its games, a tactic that drives some creators away from their content.

Without noticing the irony, Lanning mentions several times the importance of retaining and nursing his own IP, all while protesting the sad state of small and medium-sized developers.

He may even have fallen prey to the anti-innovation incentive provided by IP, given that his recent projects have involved re-releasing classic titles rather than working on more ambitious (and uncertain!) projects. While IP law tends to favor the largest competitors, smaller firms can rely on it as well.

Ultimately, if developers want to pursue more artistic projects that appeal to smaller audiences, they need to take a step away from the one-size-fits-all corporate development supported by government regulation and toward genuine entrepreneurship and innovation.

If Lanning thought more about free exchange, he’d realize that markets produce exactly the kind of high-quality product he wants:

As craftsmen, our opportunity lies in finding the niches where we know our audience, we focus on it, we listen to it, we respect it, we treat it with some grace and … if you can keep mobilizing that audience, keep informing that audience, then how much is that worth?

It’s worth a lot. Yet, it’s markets that cater most effectively to diverse needs and niches, and it’s entrepreneurs who nurture value for consumers. Their success depends on it. We’re all better off when we turn our controllers over to the invisible hand.


Matthew McCaffrey

Matthew McCaffrey is assistant professor of enterprise at the University of Manchester and editor of Libertarian Papers.