Update: Oracle ordered to lower damages claim against Google

Oracle's expert 'overreached' in concluding Google owed up to $6.1B for infringent of Java patents with Android, judge said Friday

1 2 Page 2
Page 2 of 2

Cockburn's report asserted that in a "hypothetical license negotiation" -- a common way of calculating damages in a patent case -- Google would have agreed to pay Oracle $2.6 billion to license its Java patents, including an up-front payment and annual royalties.

Google has asserted that Cockburn's estimate ranged even higher, to as much as $6.1 billion.

Alsup rejected Google's argument that the royalty payments should be no more than $100 million simply because Google received and rejected an offer from Sun to license Java at that price in 2006. In rejecting the offer, Google may simply have been gambling that it could win in court rather than "pay a fair price," the judge said.

But the $100 million figure should be the starting point for calculating a hypothetical license, Alsup wrote. It should then be adjusted upward and downward in line with factors he outlined in his order.

Oracle's patent claims "certainly do not cover all of Java or all of Android," the judge wrote, in explaining why he rejected Cockburn's estimate. Cockburn did not tie his calculations to any of the specific patents at issue, nor did he consider that the claims relate only to specific parts of Android.

"It seems highly unlikely that Android derives its entire value from a small set of infringing features, given its breadth," the judge wrote. "The next report must apportion the total value between the specific infringing features versus the rest of Android."

He backed Oracle in some important areas. Cockburn was entitled to argue that Sun would have sought higher royalty payments because it feared Android would fragment Java, the judge said.

And it's significant that Alsup said Google's ad revenues are linked to the value of Java. Google had argued strongly that the two were unrelated.

"Of course, they do have something to do with the overall value," the judge wrote. "There is evidence, for example, that users with Android phones 'search twice as much' as users with other types of phones, increasing the advertising revenue derived from Google's search service."

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

Related:

Copyright © 2011 IDG Communications, Inc.

1 2 Page 2
Page 2 of 2
9 steps to lock down corporate browsers
  
Shop Tech Products at Amazon