What is the cost to Google of offering Android free to 100 million-plus users? Oracle reckons billions of dollars, says Clint Boulton
Google could rue the day it built the Android operating system with Java code and spun it out to the world under an open source license.
Oracle on the war path
This stunning revelation, which came one week after we learned that Oracle wants 50 percent of Google’s mobile ad sales, is the first time we’ve heard officially from Oracle how much in damages the company is seeking.
Even so, patent expert Florian Mueller hit the nail on the head last week when he wrote that Oracle was seeking at least a billion dollars from Google:
“Having analyzed Google’s latest filings in the case, I have no more doubt that Oracle’s damages expert calculated damages that would, at least if tripled due to willful infringement, amount to a billion-dollar figure. And that’s just damages: if Oracle wins, Google will also face an injunction and need to negotiate a license deal (in the alternative, all existing Dalvik-based apps would have to be ported to a new app platform).”
Google doesn’t make money directly from Android because it doesn’t license the technology. Rather, it makes money from ads related to mobile searches performed on those 100 million-plus devices people use all over the world. Clearly, Android’s ubiquity is a big part of Oracle’s seemingly greedy position.
Oracle estimated that Google earns $3.35 (£2.07) a year per device via mobile ads, so if you multiple that number by 100 million, you get $335 million, half of which is over $165 million.
Then you add $200 million (£124m) for lost profits and into the billions for Google’s alleged fragmentation of Java into “numerous incompatible sub-standards,” and you get billions of dollars in damages.
Non-willful vs. willful
Google is, of course, asking the US District Court in Northern California to dismiss the damage report. The scary part is that is without triple damages, which the court could award in the event the court finds Google willfully triggered all of the damages.
I asked Mueller what Google is looking at it in payouts if the infringement is found to be non-willful versus willful.
Mueller, who updated his coverage of the case to address Oracle’s “billions” claim, told me that based on Oracle’s latest filing it looks like the amount will be in the billions of dollars even independently of the willful infringement question.
“If the court determines there was willful infringement, then the question is when it began. That could be the time when the infringement as a whole began, but it could also be a later point in time, such as when they were put on notice (if notice was needed at all – maybe it’s clear they knew it even without notice). The tripling of damages would then relate to that period, but not to the period before.”
This could end up being the biggest business-altering, multi-billion-dollar mistake Google ever made in its 13 years of existence. Google makes $30 billion a year, give or take. It doesn’t want to end up paying billions back, never mind pay Oracle for Android licensing in perpetuity.
But it may have to if it loses in court.