In the latest update on the battle between Oracle and Google over Java code used in Google’s Android operating system, Oracle have finally told the courts what kind of sum they are seeking to recover in damages.
So how much do Oracle think Google owe?
Fingers to mouth – $1,000….no, sorry, $1,000,000….mmm…..No….$1,000,000,000!…..yes, one billion dollars, wahahaha!
Actually much more potentially!
In a previously redacted document the conclusions are if Google was found guilty of infringement, damages and costs in the region of 1.4 billion and 6.1 billion dollars would be likely.
“Google, if found to infringe, would owe Oracle between 1.4 and 6.1 billion dollars.”
Wilful infringement escalates damages:
Yes you heard us right, if the courts rule that Google has infringed copyrights, they face a tripling of the fine amount due to “wilful infringement”, this is how the likely bill will be in the Billions.
Google’s most costly mistake ever:
Not only is a fine of this magnitude a real blow to any companies bottom end, the fact that an ongoing licensing deal will have to be brokered after the settlement means more money will have to be passed to Oracle for the duration of the license agreement, this means that the Android O/S could end up being a nasty little alien invasion for Google.
Google make money from advertising not licensing Android:
As the Android OS is open source, Google do not earn money from owning the code, rather they allow manufacturers to use their operating system and then tag advertising onto this within apps etc to create the revenue stream, its what Google know best and until now has proven a success in almost all areas they have delved into advertising related.
So how is the Billions made up and what will the final figure actually be?
With Oracle estimating that Google earn approximately $3.35 for each device with Android installed per year, X this by 100 million devices, and you get a figure of around $335 million, divide this by 2 and you get $165 million.
Of course the total figure will depend on how far you go back as more and more devices are being brought into the market daily.
On top of this figure you need to factor in lost profits that will equate to at least $200 million, and potentially into the Billions for the alleged infringement of Java into “numerous sub-standards” and the figure you end up with will obviously be well into the Billions.
“The letter also reveals some other interesting data points, such as the terms on which Sun proposed a license deal to Google, which Google rejected: “$60 million over three years plus an additional amount of up to $25 million per year in revenue sharing.”
Licensing:
There are reports that Oracle is seeking a 50% revenue share for all the money Google makes through applications sold, and whatever happens some kind of licensing agreement will likely be the way forward even though it seems like it has been discussed in the past.
So much for the slogan “Don’t be Evil”
Google are seeking to shut Oracle up in the early stages of the legal motions, probably in fear that news of the potential settlement (in the billions) will upset and worry the Android market negatively.
Do Google really care?
Looking at the facts though, we are wondering if Google really care.
They now have an operating system that will be the number one in the new mobile SmartPhone arena, making sure they lay claim to the new promised land of mobile advertising, so was this perhaps not just an educated all guns out attempt to get first mover (or second mover) advantage before the likes of Nokia, or RIM or any other potential competitor could muscle in and do things better.
The outcome for good or worse for Google has been all positive so far, and if they have to sign over at worse 50% of revenues and a bill for damages, we are sure they will negotiate terms that suit themselves pretty damn favourably over the long term.
It seems to be the season of litigation in the technology industry why not take a look at our report on Apple and Nokia’s recent settlement.
Does Google’s seemingly underhand practices make you look at other SmartPhone operating systems with more favour or do you take all this with a pinch of salt and simply go for what looks and feels the best at the right price?
Anthony Munns