High-stakes courtroom drama
How Google-Oracle battle over Android infringement claims could run up Samsung's bills
By Cho Mu-hyun
Handset manufacturers, like all businesses, want to save as much as possible on costs in making, shipping and selling their products. For smartphones, they also want to save on licensing fees attached to various programs.
However, those using Google’s Android operating system (OS) may be paying more than their rivals due to the American software giant’s alleged infringements of patents owned by computer technology firm Oracle.
Korean smartphone manufacturers and the majority of their overseas counterparts all use Android.
Oracle, which owns programming language Java, has claimed that application programming interfaces (APIs) used by Google to create Android violated its Java patents and copyrights. Oracle filed a lawsuit in 2010 seeking $6 billion in damages but won only minor settlements in a jury trial at a San Francisco federal court. It has vowed to appeal.
There are speculations that if the Santa Clara-based firm wins its case, Google will charge handset makers using Android’s popular Ice Cream Sandwich and the recently unveiled Jelly Bean more to offset the loss.
Oracle CEO Mark Hurd stated during his recent stay in Korea that the company “will continue to charge a Java licensing fee in the market place.” He declined to comment on the litigation or whether asking for payment will extend to original equipment manufacturers (OEM), such as Samsung and LG Electronics.
Hurd said: “Java is alive and well we are investing heavily on it and we see it as a key technology. It is a core development platform and key to everything we are doing.” He stressed that there were 9 million developers for the programming language.
Google representatives here declined to comment on the legal proceedings or how they might affect its business relationship with Korean partners.
Analysts and legal experts here say the firm founded by Larry Page will likely charge manufacturing partners if further infringements are decreed by the court.
“OEMs already pay substantial amounts to Google for using Android, such as program technology or associated service charges. They also pay fees to other companies’ whose patented programs were used by Google without prior consent,” said Seoul-based industry analyst Thomas Kang. “If the appeal court decides to reward Oracle more compensation, Google will automatically change its policy on Android usage fees it collects from OEMs.”
Using Android is “free,” but the American company charges OEMs for using technology to realize the operating system on the phone and Google provided mobile services such as maps, Gmail and others compatible with the program.
A legal consultant based in Seoul, who declined to be named, said that Google may use the Java situation as leverage to collect more fees from Korean manufacturers. “The contract signed between Google and Samsung concerns the Android source code. It has a warranty as part of the general provision.”
One party has the right to give authority of the contract to the other, the consultant said. As Samsung is Google’s biggest client, it is likely that it secured “authority” for the Android patent that will allow it to refuse to pay additional fees. Other smaller clients such as LG or HTC will be targets for Google.
“Google will eye OEMs to compensate for losses if it is forced to pay Oracle more in the appeal court. It will depend on whether Oracle asks for royalties from OEMs for their patent violation by using Android.”
He added that OEMs have multiple ways to block Oracle from charging more. “It is unlikely that they will sit back and pay additional fees and will probably retaliate. They will build a defense strategy as they monitor the situation.”
Representatives of Samsung and LG Electronics declined to comment on the matter when contacted.
Android, built as an open platform for carriers, OEMs and developers “free of charge,” was created so that “there was no central point of failure, where one industry player could restrict or control the innovations of any other,” according to Google.