In a closely-watched case, the Supreme Court on Monday ruled 6-2 that Google’s copying of over 11,000 lines of Oracle’s application programming interface (API) code was permissible fair use under copyright law.  Writing for the majority, Justice Breyer declined to answer the underlying question of whether Oracle’s code is copyrightable, assuming that it is for fair use analysis.  The Court’s ruling reversed a ruling by the U.S. Court of Appeals for the Federal Circuit finding that Oracle’s code was copyrightable and that Google’s copying was not fair use.

Fair use is a commonly invoked defense to copyright infringement, whose application depends on a 4-factor test.  Starting with the second factor (Nature of the Copyrighted Work), the majority found that the “declaring code” copied by Google is “further than are most computer programs…from the core of copyright” because it is “inextricably bound up with” non-copyrightable ideas.”  See Slip. Op. at 22, 24.  Specifically, the majority distinguished between implementing code that actually instructs the computer to perform a task, and the declaring code used to associate a programmer’s commands (i.e., “method calls”) with the implementing code the programmer wants to use.  According to the majority, the declaring code labels and organizes tasks within the API (which is not copyrightable), whereas the implementing code is a new creative expression.  See id.  Because the copyright protection for declaring code is thin (at best), this factor favors fair use.

Regarding the (normally) first factor (Purpose and Character of Use), the majority found that Google’s use of Oracle’s code was transformative because it was used to create a new platform for programmers to create apps for Android-based smartphones.  Taken in contrast to Oracle’s previous use of declaring code for laptop and desktop applications, Google’s transformative use weighs in favor of fair use.

Regarding the third factor, (Amount and Substantiality of Portion Used), the majority noted that although Google copied 37 packages (about 11,500 lines) of declaring code, the copied code is only 0.4% of the nearly 3 million lines of code that make up Oracle’s entire API, which favors fair use.  That the code copied was limited to the amount needed for the transformative use, also favors fair use.

As for the fourth, and normally most important, factor (Market Effects), the majority found that Google’s use of the code to create a platform for developing smartphone apps did not interfere with Oracle’s use of the code for the separate market of laptop and desktop applications.  The majority noted that Oracle had tried to enter the smartphone market but failed for a variety of reasons unrelated to Google’s use of the code.  The majority also relied heavily on the potential public harm caused by allowing Oracle to prevent others from using its declaring code since programmers are so familiar with its Java API.  According to the majority, allowing Oracle to limit who can use the declaring code would stifle, not promote, creativity by limiting new programs that can be created using the API.

In a well-reasoned dissent, Justice Thomas (joined by Justice Alito) faulted the majority for not addressing the copyrightability question, and for differentiating between declaring and implementing code.  The dissent also noted evidence that Google’s copying severely damaged the market for Oracle’s code, which is typically the most important factor in the fair use analysis.

Although the decision is a clear victory for fair use proponents, the breadth of its impact remains to be seen.  The holding is somewhat narrow in that it distinguishes between declaring code and other types of code, the copying of which may be less amenable to fair use defense.  The majority was also careful to note that the decision does not affect decisions relating to other types of fair use, such as parody.  On the other hand, the majority opinion leaves open the question of what constitutes a “transformative” use with respect to software and give lower courts the green light to balance potential public harm when considering the all-important market effect factor.  It will be up to lower courts to further flesh out the contours of software-related fair use in view of the Court’s decision.