The federal appeals court that handles U.S. intellectual property cases ruled that APIs can be copyrighted, a finding that may have significant consequences for cloud computing, software interoperability and innovation in general.

See also: What APIs Are And Why They Matter

The decision came as part of a ruling in Oracle’s favor in its appeal against Google over the use of Java APIs in Android. The U.S. Court of Appeals for the Federal Circuit today overturned an earlier ruling in the Oracle-Google fight over whether or not software application programming interfaces, or APIs, are subject to copyright. (See the full text of the court ruling below.)

Judge William Alsup ruled in Google’s favor in 2012, stating that APIs were purely functional, and thus not creative works deserving of copyright protection. The jury had previously deadlocked on whether Google’s use of the Java APIs was covered by the “fair use” exception to copyright law, a critical question in the case that was mooted by the judge’s ruling on copyrightability.

Oracle originally sued Google for patent infringement and copyright violation for using the Java programming language in its Android mobile operating system. The jury in the case found no patent infringement, but said that Google had copied the Java code from 37 APIs as well as nine lines of code from a specific routine in the operating system called “rangeCheck.”

Google counterargued that computer code, like concepts in written language, were subject to fair use in terms of the specific structure, sequence and organization of that code.

Fair use is a legal exemption from copyright restriction that basically allows for limited copying of copyrighted material under certain circumstances, such as criticism, news reporting, teaching, and research. Generally, the concept of fair use hasn’t applied to computer programming languages, which makes the case between Google and Oracle quite important for future innovation.

The appellate court ruled:

Because we conclude that the declaring code and the structure, sequence, and organization of the API packages are entitled to copyright protection, we reverse the district court’s copyrightability determination with instructions to reinstate the jury’s infringement finding as to the 37 Java packages. Because the jury deadlocked on fair use, we remand for further consideration of Google’s fair use defense in light of this decision. With respect to Google’s cross-appeal, we affirm the district court’s decisions: 1) granting Oracle’s motion for JMOL as to the eightdecompiled Java files that Google copied into Android; and (2) denying Google’s motion for JMOL with respect to the rangeCheck function. Accordingly, we affirm-in-part, reverse-in-part, and remand for further proceedings.

Oracle acquired Java when it purchased Sun Microsystems in 2009.

The appellate-court decision isn’t just a matter of two tech giants battling it out in court. Often enough—as in the seemingly endless series of Apple vs. Samsung cases—court battles between tech titans can end up meaning very little to average users and developers. The Oracle-Google case, however, touches on fundamental aspects of software and the way programs and Web services interact with each other.

The Electronic Frontier Foundation summed up the dangers of copyrighting APIs during the Oracle suit in May 2012:

Here’s the problem: Treating APIs as copyrightable would have a profound negative impact on interoperability, and, therefore, innovation. APIs are ubiquitous and fundamental to all kinds of program development. It is safe to say that ALL software developers use APIs to make their software work with other software. For example, the developers of an application like Firefox use APIs to make their application work with various OSes by asking the OS to do things like make network connections, open files, and display windows on the screen. Allowing a party to assert control over APIs means that a party can determine who can make compatible and interoperable software, an idea that is anathema to those who create the software we rely on everyday. Put clearly, the developer of a platform should not be able to control add-on software development for that platform. [Emphasis added]

The fight between Oracle and Google is nowhere near over. Google will almost certainly appeal the ruling to the Supreme Court, which over the past several years has shown a general willingness to rein in the federal-circuit court’s rulings on intellectual property.

For now, the case has been remanded back to the federal district court in Northern California, where Google will have another chance to argue that its use of the Java APIs falls under fair use.

Update: Matt Kallman, Google’s global communications and public affairs manager for patents, responded to the ruling in an email to ReadWrite: “We’re disappointed by this ruling, which sets a damaging precedent for computer science and software development, and are considering our options.”

Oracle issued the following statement:

We are extremely pleased that the Federal Circuit denied Google’s attempt to drastically limit copyright protection for computer code. The Federal Circuit’s opinion is a win for Oracle and the entire software industry that relies on copyright protection to fuel innovation and ensure that developers are rewarded for their breakthroughs. We are confident that the district court will appropriately apply the fair use doctrine on remand, which is not intended to protect naked commercial exploitation of copyrighted material.

And here’s the text of the appeals court decision:

Image of Larry Ellison on stage by Flickr user Sen Chang

