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Oracle and Alphabet Fail to Reach Settlement Over JAVA APIs

Per a court docket, Oracle Corp. ORCL and Alphabet Inc. GOOGL have failed to reach any settlement over copyright violations of Java APIs (application programming interface) despite discussions stretching for six hours. The case is now headed for a retrial in May.

Representatives from both Oracle and Alphabet’s Google division headed by their respective CEOs Safra Catz and Sundar Pichai met on Friday to sort a long running dispute out of court. However, talks fell flat and now the decision rests with the jury.

Last month, per media reports, Oracle sought $9.3 billion as compensation from Alphabet for unauthorized usage of Java APIs in its Android operating system.

As per IDG News service, Oracle’s damage expert James Malackowski had claimed $8.8 billion as compensation for profits made by Google in addition to $475 million in damages. However, Alphabet’s damage experts have quoted a much lower figure (“at least part of the damages at $100 million”) as compensation for Oracle.

The dispute has been going on for the past six years now. Oracle had first sued Alphabet, then Google, for copyright violations of its Java APIs. Java was developed in the early 1990s by Sun Microsystems, which was later taken over by Oracle in 2010.

In May 2012, Alphabet initially gained an edge as Northern District of California Judge William Asylup ruled that APIs are not copyrightable. However, next year, a U.S. Court of Appeals for the Federal Circuit reversed the district court’s ruling, thereby bringing some relief for Oracle but at the same time, gave Alphabet a breather in the form of the “fair use” defense clause “which permits copying under limited circumstances.” In Oct 2014, Alphabet filed a petition in Supreme Court but SCOTUS turned down the petition and redirected it to a district court. 

Analysts observe that the compensation amount claimed by Oracle has risen more than tenfold since the last time both the tech behemoths locked horns over copyright infringement in court. A booming smartphone market especially for Android run devices in the last few years is a contributing factor to the mammoth compensation demanded by Oracle. All the latest Android versions up to and inclusive of Lollipop will be included in the fresh trial.

At present, both Oracle and Alphabet carry a Zacks Rank #3 (Hold). Better-ranked tech stocks worth consideration include NetEase, Inc. NTES and Etsy, Inc. ETSY. Both sport a Zacks Rank #1 (Strong Buy).

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