A jury on Monday turned in the first big verdict in the high-stakes dispute over intellectual property between Google and Oracle. Unfortunately it didn't do much to resolve the conflict, failing to rule on a key point that would give either party a clear victory.

Briefly, the jury found that Google infringed on Oracle's copyrights over Java code — which serves as a basis for a big chunk of Android — but didn't rule at all on whether or not Google's actions could be considered "fair use." The judge in the case, U.S. District Court Judge William Alsup, has said he'll make a further ruling that will address that point and potentially alter the outcome with a final decision on whether software APIs (application programming interfaces) can be copyrighted.

APIs are used by many apps to standardize how they interact with other software. Instagram, for example, uses Foursquare's publicly available APIs to import location data from that service. Broadly, Oracle accuses Google of copying its Java APIs when it created Android.

While the jury agreed with Oracle that Google infringed upon the "overall structure, sequence and organization" of Java, the idea of fair use throws the infringement into question. As the verdict stands now, Google's so-called violation would only cost the company up to $150,000 — less than the company spends on lunch for its employees in five days. Orcale had sought $1 billion in damages.

There are two more parts to the trial, however. While the first part was attacked the issue of copyright, the next, which began Monday, turns the case toward patent law. The third and final phase will address damages.

Those damages, at least in this part of the case, may be fairly small if Alsup rules that Google's implementation of Java is in fact fair use, an issue that left the jury deadlocked. Fair use is typically cited when using creative works — excerpting part of a book or movie as part of a review, for instance — but it's much less clear in its application to software.

Patent expert Florian Mueller — who also does consulting for Oracle (see "update" below) — says it's not even close, and there's no way Google's use of Java could be considered fair use. Stacking Google's actions up against fair-use law point by point, Mueller says the company adapting Java for Android is more akin to "hijacking a platform." Google benefited from the development of Java by basing its code on it, then specifically made Android incompatible, effectively recruiting the Java-development community for its own mobile operating system.

If the judge rules that Google violated copyrights and fair use, it could have far-reaching consequences for software development generally, and cloud services specifically. George Reese, CTO of cloud-services provider enStratus Networks, tells Wired: “If APIs can be copy-protected, that would be incredibly destructive to the Internet as a whole for so many different reasons.”

Many cloud services, from OpenStack to Rackspace, have essentially copied the APIs from Amazon Web Services (AWS), the piece notes (AWS is by far the most popular cloud-hosting service). Should the case find that APIs are copyrightable and using them isn't fair use, all those companies would need to obtain licensing agreements with Amazon. Also, by virtue of copyright law, those copyrights would last 95 years.

For what it's worth, the man who invented Java for Sun Microsystems — which Oracle acquired in 2010 — thinks Google is in the wrong. Writing on his personal blog, James Gosling says, "Just because Sun didn't have patent suits in our genetic code doesn't mean we didn't feel wronged. While I have differences with Oracle, in this case they are in the right. Google totally slimed Sun."

Although Oracle's official statement about Monday's verdict essentially re-hashes its core argument that Google should have obtained a Java license in the first place, Google — who has now formally requested a mistrial — emphasizes that "infringement and fair use are two sides of the same coin." In other words, if Google's use of Java is fair use, by definition it didn't infringe.

It's a logical argument, and it essentially makes the case an all-or-nothing affair. However, with the stakes this high, Google — and the rest of the web — should start preparing for the possibility that they lose that coin toss. If that happens, established companies will enjoy new protections and possibly new sources of revenue while startups and competitors will have fewer options when building APIs. The business of creating software will look quite different from what it is today.

Do you think that's a bad or a good thing? Should software APIs be free to copy, or is such a free-for-all attitude killing legitimate licensing deals? Have your say in the comments.

Update: Commenters and contacts have informed me that Florian Mueller works as a consultant for Oracle. He says so in this blog post, explaining that the timing of the relationship is a coincidence, and that his opinions on the Google-Oracle case are not related to his consulting work. We believe the substance of his remarks stands on its own, but we invite readers to draw their own conclusions.

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