Shares in Alphabet Inc (NASDAQ:GOOG) headed lower in pre-market trading on Wednesday after the Google owner lost a major copyright case that could cost it billions.
Fellow tech giant Oracle Corporation (NYSE:ORCL) originally brought the case against Google back in 2010, claiming that its Android platform infringes two patents which Oracle holds on its Java software – a programming language that powers everything from phones to websites.
Fair use
Google hit back, claiming that its use of Java was legal under the copyright law’s fair use doctrine, which allows for free use of copyrighted material under certain circumstances.
After years of back-and-forth, a jury in 2016 agreed with Google, a decision which Oracle subsequently appealed.
On Tuesday afternoon, the US Court of Appeals read its verdict and sided with Oracle, stating that Google violated copyright laws when it used Java software to build the Android platform back in 2009.
“There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform,” a panel of three Federal Circuit judges wrote in Tuesday's opinion.
Oracle praised the decision, saying that it “protects creators and consumers”, while Google said it was “disappointed” and was weighing up its options.
Oracle could seek more than US$9bn
The appeals court has sent the case back to a US judge in San Francisco – where the lawsuit was initially filed – to determine how much compensation Oracle is owed.
The company, headed up by eccentric billionaire Larry Ellison, had previously been seeking around US$9bn, but that figure could have increased this time around.
Whatever amount is awarded, it is highly likely to eclipse the current largest copyright verdict of US$1.3bn, which was awarded to Oracle when it sued rival SAP in 2010.
Alphabet shares were down just over 1% to US$994.10 shortly before the opening bell on Wall Street.