THIRD-PARTY SOFTWARE
29 Apr

THE FAIR USE OF PROTECTED CODE IN THIRD-PARTY SOFTWARE: WHAT HAS (AND HASN'T) THE US SUPREME COURT RULED?


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The recent US Supreme Court ruling of April 5, 2021, which solved a long-running dispute between Oracle America, Inc. and Google, LLC, has elaborated further on the application of the theory of fair use on computer software lines of code.  This issue is not actually entirely new, as this theory has been repeatedly applied by American courts in order to delimit the permitted use of other people's works so as not to be considered an infringement on the existing copyright on them. 

To begin with, it must be assumed that fair use allows a limited use of works protected by copyright without the need to ask for authorization from the rightful owner. It is a limitation to the exclusive right of the authors, which takes into account not only their interests, but also the public interest in achieving a wider dissemination and use of the protected works.  Obviously, in the absence of this specific limit, the use would be considered an infringement, that is, open to prosecution, giving rise to more or less substantial compensation depending on the damage actually caused. 

When deciding on the applicability of the limit on fair use, American case-law has taken into account several criteria, such as the purpose of the use, the type of work, the amount of someone else's works that has been used, and, finally, the damage that could potentially be caused to the original market of the work at issue.

Precisely within this regulatory framework, the conflict between Oracle and Google was to determine whether Google's use of approximately 11,000 lines of source code of an application programming interfaces (APIs) of Oracle's Java programming language constituted an infringement of Oracle's intellectual property rights, or whether, on the contrary, such use falls within the fair use doctrine boundaries.  The US Supreme Court has opted for the latter, thus rejecting Oracle's claims for damages.

This decision is important because it allows APIs to be made available to programmers, so that they can create new programs by reimplementing user interfaces. This use or appropriation is fair, according to the Court, but only to the extent that the amount of lines of code used represents only a tiny amount of the total (0.4%), and the final benefit achieved outweighs the potential harm likely to be caused to the rightful owner (Oracle).

The practical outcome of this ruling has been that Java developers are now free to adapt programs to run on Android, and thus, in short, to enable Google to compete better in the mobile phone market. 

But this ruling also arouses great interest in as far as numerous computer programs are developed by reimplementing API functionality, in order to achieve interoperability between different systems.  It is in this respect that the US Supreme Court decision takes on even greater importance.  In fact, although the verdict does not expressly rule on whether the APIs in dispute met the requirements to be protected by copyright, the fact is that, implicitly, it does infer that possibility, that is, it does not rule it out from the outset. 

Furthermore, this decision has significant consequences in the field of software development to enable its interoperability with other computer programs or with platforms based on open-source code. If the decision had been favorable to Oracle's side, it would have meant the recognition of an exclusivity of use on APIs, which have traditionally been considered free to use. And this would have implied the possibility that many programs developed would be infringing the copyright on these interfaces, regardless of the amount of code used. On the contrary, the decision finally taken by the Supreme Court allows a free use of proprietary code without it being deemed an infringement. 

However, it should not be overlooked that, although welcomed by open-source software advocates, this ruling should not be interpreted as a complete lifting of possible (exclusive) copyright on APIs. In fact, when read closely, what it actually states that to the extent that the specific use reported can be understood as falling within fair use, infringement is ruled out.  In other words, if, for example, the amount of code used had been substantial, or if it had been proven by Oracle that the damage or harm to its interests exceeded what could be considered tolerable (fair), the outcome might well have been different. 

In conclusion, I do not think that the US Supreme Court really wanted to unprotect possible API proprietary rights, but rather limit the exclusive right to those creations.  In any case, and in the short term, the benefits for the open-source code developer community are unquestionable.

José Carlos Erdozain. Of Counsel at PONS IP