Oracle wants 15% of Google's Android ad revenues

Oracle is claiming $2.6 billion in patent and copyright infringement damages related to its ongoing intellectual property skirmish with Google (NASDAQ:GOOG) over the Android mobile operating system.

Oracle alleges that Android "directly copied" elements of the Java programming language, acquired by Oracle when it purchased rival Sun Microsystems in April 2009. According to Oracle's latest court filing, it wants Google to pay $0.9 billion to $1.4 billion upfront for infringing on its patents. Oracle also wants 15 percent of mobile advertising revenues generated across the Android platform. Late last year, Google said its mobile ad business operates at a run rate of $1 billion annually.

A June 6 letter from Google attorneys to U.S. District Judge William Alsup states that Oracle's damages expert contends Google would owe Oracle between $1.4 billion and $6.1 billion in damages if it is found liable for infringement. Google representation calls the projection "a breathtaking figure that is out of proportion to any meaningful measure of the intellectual property at issue," adding that even the low end of the range "is over 10 times the amount that Sun Microsystems Inc. made each year for the entirety of its Java licensing program and 20 times what Sun made for Java-based mobile licensing."

Google argues the damages expert's testimony should be disregarded, claiming the projection inflated Android licensing royalty rates that Google may owe. "Oracle's 'methodology' for calculating damages is based on fundamental legal errors and improperly inflates their estimates," Google said in an email statement earlier this month.

Oracle's original complaint, filed in August 2010, supplied few details about the alleged infringement, but an amended complaint filed in October includes specific examples of code attached as exhibits. The complaint states that "approximately one-third of Android's Application Programmer Interface (API) packages" are "derivative of Oracle's copyrighted Java API packages" and related documents.

"The infringed elements of Oracle America's copyrighted work include Java method and class names, definitions, organization, and parameters; the structure, organization and content of Java class libraries; and the content and organization of Java's documentation," Oracle alleges. "In at least several instances, Android computer program code also was directly copied from copyrighted Oracle America code."

Intellectual property activist Florian Mueller believes the Oracle lawsuit could force Google to restructure its Android business in both economic and technical terms. "It could very well be that a defeat in court would require Google to make fundamental changes to its Dalvik virtual machine--changes that would likely affect many if not all existing Dalvik-based (.DEX) applications," Mueller writes on his blog.

For more:
- read this Los Angeles Times article

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