The latest twist in the long-running legal saga

Oracle claim Android activation generates $10 million in annual ad revenues – per day!

Chris Mayer

New plea by Oracle shows a change of tact in legal battle plus a frank view of Android’s business model

It might seem less clearer to actually getting the two into court, after March’s judgement day was left in doubt, but the crossfire between Oracle and Google over Java patent infringement trial keeps on coming.

Firstly, Oracle have made a surprising move proposing to the court that it halt (or dismiss without prejudice) its patent infringement claims against Google for nine months, thus pushing forward for near-term copyright trial in the spring of 2012

Intellectual property expert, Florian Mueller broke the story on FOSS Patents, outlining Oracle’s decision that would also see them waive another right to submit a new (third) damages report and states his theory behind Oracle’s reasons for this move.

Oracle’s priorities are clear: more than anything else, it wants an injunction. I have said all along that damages in this case could amount to billions of dollars, but the strategic value of an injunction far exceeds that of even the most aggressive damages award. Oracle wants that injunction as soon as possible, and it is willing to bet, in the near term, on the copyright part of its case.

It appears that Oracle believe its best chance of winning this case is through copyright infringement claims, a big shift from their original stance opposing a stay on the patent claims, whilst Android welcomed it.

Oracle’s letter to the court reveals their intention to write another petition to the Federal Circuit should the judge rule against them

Oracle believes the Court has taken an unduly strict and improperly narrow approach to the analysis of damages in this case, and reserves its right to appeal the Court’sDaubert and in limine orders.

What was more revealing within Oracle’s letter was their depiction of Android and how Google was making economic headway Java patents, providing the strongest evidence for them wanting to resolves the infringement lawsuit as quickly as possible. They say:

While this case awaits trial, more than 700,000 Android-based devices are activated every day, all fundamentally built around the copyrighted Java APIs and the enhanced performance enabled by Oracle’s patents.

“Each day’s worth of activations likely generates approximately $10 million in annual mobile advertising revenue for Google.”

Whilst the first quote appears to be well founded, given that you have to say Java has been part of Android’s success, the second is an estimate that could be working on the assumption that $14 of annual advertising is made per Android user. 

From simple math, we can ascertain that Oracle clearly values Android’s total mobile ad revenue higher than the $2.5billion that Google previously stated back in October, although this was not based on activation as Oracle’s figure is, so it could be even higher. With Google set to release their annual financial report tomorrow, it will be interesting to see if this is discounted by them.

Oracle fervently argue that Android is much more to Google than a money-spinner, as it says in a footnote

This revenue does not even include all the other value Android generates for Google, ranging from Android Market revenue, to other Android-related services, to ensuring that Google will not be locked out of the mobile business, to lucrative relationships with manufacturers of myriad devices on which Android can and does run, to the inordinately valuable access Android provides to customers for its new social network service, Google+. Indeed, Android has enabled Google to wield such power with regard to search and other services that its Android distribution and licensing practices — far from the ‘open’ practices Google has proclaimed it lives by — are under investigation by competition law agencies in the United States, Europe and elsewhere.

You could argue that Oracle is on a warpath against Google, but a fairer assessment is that Oracle wants to be recompensed for providing part of Android success. This trial is far from over just yet (surprise, surprise), but the gauntlet has been thrown down by Oracle.

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