Courthouse Steps Decision Webinar: Google v. Oracle

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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group Teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Nick Marr:  Welcome everyone to this Federalist Society virtual event. And today, this afternoon -- this is our second Zoom program of the day, so thank you all for joining us. Today, April 16, 2021 we have a “Courthouse Steps Decision Webinar on the Supreme Court Decision in Google v. Oracle.” I'm Nick Marr, Assistant Director of Practice Groups here at The Federalist Society.

 

      As always, please note that expressions of opinion on today's call are those of our experts. We are joined by a great panel today. I'll just introduce our moderator, and then she'll take it from there. We are very pleased to be joined this afternoon by Professor Sandra Aistars, who is going to moderate our discussion. Professor Aistars is Clinical Professor, Senior Scholar and Director of Copyright Research and Policy at George Mason University's Antonin Scalia Law School.

 

      So with that, thank you all for joining us. And, Professor, I'll hand the floor to you.

 

Prof. Sandra Aistars:  Thanks very much, Nick. So it is my pleasure today to moderate this panel and to introduce our panelists. Joining us today to speak about the Google v. Oracle decision we have Professor Michael Risch, who is Vice Dean and Professor of Law at Villanova University School of Law, where he is a member of the University IP Policy Board. And Professor  Risch's teaching and scholarship focus on intellectual property and internet law with an emphasis on patents, trade secrets, and information access. He joined the Villanova faculty in 2010 from the West Virginia University College of Law, where he directed the Entrepreneurship Innovation and Law program.

 

      And also joining us today is Professor Zvi Rosen. And Professor Rosen is Assistant Professor at Southern Illinois School of Law, where he teaches copyrights and property. And Professor Rosen has also written extensively about the history of IP, which will be particularly interesting when we talk to both professors about the Seventh Amendment issues that were raised in this decision.

 

      So I am sure all of you are familiar with the opinion and the great amount of interest it generated. This is one of those opinions that had a huge amount of amici weighing in on both sides as well as amici for neither party, all cautioning the Court that any holding would have vast implications for copyright holders beyond the parties, as amici are want to do.

 

      So I'm going to start off by asking each professor to give us your respective takes on the decision and its ultimate impact, not just on the parties, but more generally and more broadly. And so let's take about five or ten minutes each to do that, and then we'll go to a more interactive Q & A between the two of you. And I'll start off maybe with Professor Rosen.

 

Prof. Zvi  Rosen:  Sure. So this decision has been percolating for a long time, of course.  You know, the litigation started in 2010, and the Supreme Court declined to hear it in 2015. And now in 2020, they finally reached it. And you have two big questions about whether or not there is a copyright in an API, which is an Application Programming Interface. And Justice Breyer sort of spends a while explaining what that is. [Inaudible 00:04:02] to note but I think that’s a good explanation. I think it's something I've seen varying opinions on.

 

      And the second question is, is it fair use. And just to give -- it says very briefly, this is when Google created the Android phone, they basically created their own version of Java but copied the organization and class named it some other code to make it, in their argument, interoperable.  The rationale that’s been argued pretty heavily. And a little bit of a surprise is that they dodged the question of whether or not the API was copyrightable and instead just looked at fair use, and, in particular, the majority opinion does that.

 

      And so we have this big question: Is this an API decision, a software copyright decision, or a general fair use decision? And this is a sort of interesting thing. I think we're starting to see two views of this case rising. I think that my take is that I think it's more of a software copyright decision. But I think there's definitely going to be people who view differently. This sort of takes the decision that everyone thought would be thirty years ago, Lotus v. Borland, and adopts Judge Boudin's concurrence that fair use is -- the First Circuit's concurrence is that it should be fair use. And I think if you adopt that concurrence it's, certainly at a minimum, it's very hard to say, even though the Court said it was adopting it. And Justice Thomas calls the majority out on this.

 

      It's really hard to see how Application Programming Interfaces are protected after this. I don't know if Professor Risch has a different view on that, but it's a weird dodge, I think, on their behalf.

 

      I think the fair use analysis is kind of problematic. There’s these issues of the nature of copyrighted work, and I think that's potentially the part where Justice Breyer says, "Well this is an API so go differently." But the analysis they give for a purpose and character of the use, I think, where Justice Breyer says, "Oh, it doesn't matter if this was commercial use, and it doesn't matter they were in negotiation over license," and he just says, "Well, that doesn't matter," and he sort of -- and he also doesn't -- it doesn't even matter if it was bad faith, which is a kind of peculiar thing to say. But he views it as coming out of cases involving a rap parody of Pretty Woman from thirty years ago.

 

      And then there's a few analyses on the market test where the final element is the effect of market. And I don't want to go too much over, but I think this really is -- there is language here that really confines it to being a software opinion, and there is language that it could go broader. And I think this attempt to -- I don't quite know what's going to happen next with this. I think the Court focuses on transformativness from that rap -- rap from that case that Pretty Woman talking about, but they then sort of talk about the impact on the market as a whole. And we talk about impact on competition, which potentially is a very broad holding. I can go on about that longer, but I don't want to step on Professor Risch's toes before I know what he is going to say. So maybe I'll pause there, and we can talk more as it goes on.

 

Prof. Sandra Aistars:  Yeah. That sounds like a good approach. I mean, obviously folks had very strong reactions to this decision when it came out, and maybe before I go to Professor Risch, I'll just read out two differing reactions to kind of frame up this decision because we didn't do this as we launched into it. So EFF, in a press release when the decision came out, said, "In a win for innovation, the US Supreme Court has held that Google's use of certain java application programming interfaces is a lawful fair use. In doing so, the Court reversed the previous rulings by the Federal Circuit and recognized that copyright only promotes innovation and creativity when it provides breathing room for those who are building on what has come before. This decision gives more legal certainly to software developers' common practice of using, reusing and reimplementing software interfaces written by others, a custom that underlies most of the internet and personal computing technologies we use every day."

 

      And then a completely different take from Gene Quinn over at IP Watchdog, who wrote an article which he, I think, titled something to the effect of An Absurd Decision Which Will Have Absurd Results, said about the decision, "Earlier this week, the Supreme Court issued its much anticipated decision in Google v. Oracle, in which the Court rules that Google's intentional copying of 11,500 lines of computer code from Oracle was a fair use despite the fact that Google made many tens of billions of dollars in the process and despite the fact that the record showed that Google consciously chose to copy rather than independently create because programmers were already familiar with the 11,500 lines of codes they wanted to take.

 

      So those are the two takes from two different perspectives out there in the kind of commentors space. And I'll turn to you, Professor Risch, and ask for your take, understanding, of course, that you also weighed in as an amici, but that you actually wrote on the copyrightability issue rather than the fair use issue, which the Court chose to side-step, sadly.

 

Prof. Michael Risch:  Right. Thank you, and I'm pleased to be here. So thank you for having me here. And I will address that a little bit. I'll start by saying it's hard to be in the middle which is where I land on this case. But first to frame it a little bit in line with my take after the oral argument. At the time I was saying there is no way I'm going to guess as to how this is going to come out. Though I'm pleasantly surprised by the outcome. As you know, they didn't go the way I wanted. I filed an amicus brief, which was not mentioned, cited, and they completely skipped the issue I wrote about. So there you have it.

 

      So now I have no guesses as to how the votes would have gone on copyrightability. There’s different speculation. Maybe they got a majority who said not copyrightable but they didn't want to shake up the industry. Maybe they couldn't get a majority on copyrightability. I don't know. My gut says they couldn't get a majority saying these were not copyrightable.

 

      At oral argument all the hard copyrightability questions went to Google. All the hard fair use questions went to Oracle. I thought this heavily favored Google because you could lose on the copyrightability and win on fair use and that's exactly what happened. Fair use won out. We'll talk about that a little bit more in this talk.

 

      I agree with Zvi that there was handling of how APIs work in the opinion. Put me on the side of people who think the Court did a pretty good job of explaining how they work, why they're important, why they are different from other code, etc., and I think that will have a bearing for how this opinion will be viewed in the future with respect to software.

 

      So a few final points on getting back to fair use. So my amicus brief said the following. It said, "Look, these APIs, these commands, may well have been created; they may well be copyrightable, but that copyright is extremely thin, and so it should be filtered out in a kind of infringement analysis when you are looking for re-use of command names and structure. Abstraction-filtration comparison should win the day, essentially." This got no love whatsoever at the Court. At least it didn't get mentioned. But by and large, the fair use opinion here is the same result. Note how the fair use analysis starts with the nature of the work and how functional it is. How often do we see a fair use opinion starting with factor two. We don't see it that often because the Court wanted to make clear that context matters. These are functional and so when we use them in a functional way it will affect how we view fair use.

 

      So then we get to the bigger picture. What does this mean for fair use and what does it mean for software. We can talk about this more in detail, but there's lots of little things to talk about. For example, transformation. The transformation part here is really interesting. On the one hand, the Campbell case gets reinvigorated. Not that it was ever on the outs. But they say transformation is important. On the other hand, transformation seems to get extended a little bit because they say, well they're re-using these APIs essentially in the same way they were intended to be used the first time around which, to me, is not terribly transformative. But because it was for Android, we will call it transformative. I'm not a huge fan of that kind of extension of transformation, which is why I like my abstract infiltration test rather than fair use.

 

      The other big picture is on the law versus fact. Are judges going to be ruling on fair use? The reality is by and large they do anyway. And so it's unclear how much is going to change. That's anybody's guess. Time will see on that.

 

      And so, finally, I will end with this. As we compare EFFs and we compare the opposite view, I fall somewhere in the middle. My view is that very little is going to change, and maybe this is an outlier view. My view is that APIs have been freely used for dozens of years. Oracle winning is what would have changed the way things work. Oracle didn't win. It's going to be business as usual. Software is no less protected than it was before. Software is really no more protected than it was before. I have not seen an outpouring of people with APIs saying, "But we were licensing our APIs, and now we can't do that." And so, to me, this is really not going to be that impactful to the software industry. We'll see if I'm wrong about that. I sure hope not.

 

      So with that, I'll send it back to you, and we can talk about specific questions you've got.

 

Prof. Sandra Aistars:  Okay. So am I right to interpret what you're saying, Professor Risch, that you think the decision is narrow and applicable only to software and perhaps only just declaring code as a subset of software?

 

Prof. Michael Risch:  So the answer is yes and no.

 

It is not narrow in the fair use analysis. So there are nuggets here about transformativeness, etc., that are going to play. So, for example, in the recent Andy Warhol Prince case where the Court said this wasn't transformative. All you did was copy the photo and then make some changes to it. Maybe they move to reconsider and say, "Look. Now in light of this case, that is transformative." But so on one hand it isn't narrow because any time the Court says anything about fair use, that means something, right? We still read Harper & Row language into other stuff. And Harper & Row was a very narrow case about pre-publication scoops.

 

But it is narrow with respect to software. I don't see every use of software being fair use. I was a plaintiff's lawyer. I still am a plaintiff's lawyer on the side sometimes, and I would be happy to go to town as a plaintiff for somebody who copied an entire code set, including all of Java, including implementing code. I would still say, "You know what? Those APIs are copyrightable, and you implemented the APIs as part of the rest of the code. You can't get away with doing that." So I think you're still going to see some copyright software in courts.

 

Prof. Sandra Aistars:  Professor Rosen, do you want to comment on this?

 

Prof. Zvi Rosen:  I think Professor Risch is probably correct, but I'm concerned about the way the market test is taken. And I think that, potentially, I could imagine if I had to argue, let's say there's going to be a new entrance in the smart phone market, and let's say they say, "Look, the costs of entry into the market are really high, so we're just going to appropriate Java bodily.  And let's say we take the open version of Java but [inaudible 17:56] terms of a license or something. I'm just making it up as I go, obviously. I can imagine they would say because of the way with Justice Breyer, we interpret from market tests to look at the overall effects on the market, and it benefit the public, I can imagine -- I would certainly make that argument if I had to defend that case.

 

Prof. Sandra Aistars:  So I'm curious what you both think about how this decision will affect

other classes of works.  You know, works in the entertainment space, perhaps.

 

Prof. Michael Risch:  So what do you mean?

 

Prof. Sandra Aistars:  Well, I mean the decision basically was looking at software but the decision was a fair use decision, and is there the list that the logic here will bleed into other fair use analyses? You mentioned the Warhol ruling in the Second Circuit, and I'll say, personally, I'm concerned that the arguments made, the decision made on the transformativeness of this sort of a use will be applied in any fair use case that comes up.

 

Prof. Michael Risch:  So I guess my view is the jury is out or, I guess, technically the judge is out on that. On the one hand, it's easier to show transformativeness because now you've got this bigger lever to say, "Well, you know, it's really changing the message." But you still have the nature of the copyrighted work, right? So in the entertainment space, if the thing that's being used isn't really for functionality, or in order to provide some sort of interoperability between computers talking to each other, etc., then you have to make some sort of different kind of transformative argument that was not at issue in this case.

 

      And so I think they're all going to be pitched battles. But I don't think this tilts the playing field so much as maybe helps a little bit. I think the market -- I agree with Zvi that the market language, right? So on the one hand there's -- you've got the market is similar, for example, in the Warhol case, right? People are selling their photos and their selling art. But on the other hand, the market for art versus photos is so wildly different that maybe a court would use this language. Certainly the parties will to say, "Look, the kind of market substitution is not the kind we'll worry about with copyright." I don't know if this case gives you enough purchase to win that outright, but it certainly gives you an argument.

 

Prof. Sandra Aistars:  So you're focused more on the fact that the Court started with the second factor and really focused on the functionality at issue here. And that gives you comfort that it's not going to spill over and affect other works.

 

Prof. Michael Risch:  I think it permeates the whole analysis. I mean, even in the market language, it says, "Look, there may be substitution, but you're presuming that there is a market for using APIs for different things, and it's not clear that you're entitled to that market." In much the same way that the Authors' Guild in the Google Library case argued that there was a market for the page numbers that words appear in books. And the Court said, "Look, that is not -- you know, maybe you could have sold that, though there's no evidence that anybody ever did, but that's not the kind of thing you're entitled to a market to." Now you might disagree with that on the merits, but that's kind of how I read it with this case that you could read it narrowly if you were going to read it narrowly.

 

Prof. Sandra Aistars:  So I'll ask Professor Rosen to comment. But I'll ask you also to comment maybe from this perspective, and that's whether the loss to Oracle here, and I'm going to take a guess that you might have been more supportive to Oracle's views than Google's. But tell me if I'm wrong. Would the loss to folks who might have supported Oracle here be easier to swallow if Oracle had lost on the basis of copyrightability? So lost on the basis that the work was purely functional and therefore not entitled to protection rather than lost on fair use analysis that really focused on that second factor, as Professor Risch is taking comfort in.

 

Prof. Zvi Rosen:  So yeah. So I do think that there would’ve been some more comfort. I don’t know to Oracle supporters. I think Oracle would have taken very little solace. But I think certainly some people who were concerned about the result would’ve taken a great deal of solace if this had been focused on copyrightability. I know, like, IBM3 really focused on very narrow approaches to copyrightability. They, using some of my work on another case, an old case called Paris v. Heximer, would have said this is just a key to the software effectively. And that would’ve had pretty much no effect outside of software. I think in hindsight it probably would have been preferable to most copyright owners compared to this decision.

 

      And as Professor Risch said, I think there is some language in here in the nature section. They have this line, "In our view, for the reasons just described, the declaring code is… [far] from the core of copyright," and then, "that fact diminishes the fear, expressed by both the dissent and the Federal Circuit, that the application of ‘fair use’ here would seriously undermine the general copyright protection that Congress provided for computer programs."

 

      So you have this limiting language, and it should be a question of what people focus on, I think, as this goes forward.

 

Prof. Sandra Aistars:  So I'm going to ask you both, both of you are professors as am I. We're all going to have to teach this case. We're both -- all of us are going to have to teach in general continue to teach the concept of derivative works and transformativeness test. So how are you each going to describe the difference between a derivative work and something that's transformative to your students after this decision?

 

Prof. Zvi Rosen:  That's a great question. I'll just jump in, and let Professor Risch follow up. And I'll just say, I think you say, "Hey, look. I think you have the Supreme Court's latest pronouncement. There is clearly a broader meaning of transformative. It's not clear to us yet whether or not it's limited to software, and the degree to which the market effect is implicated." I actually, one thing I think I'm going to do when I teach this is read Golan v. Holder. Try to read it nearby or just look at it again because I do think part of what Justice Breyer is doing is sort of importing [inaudible 25:45] -- I mean, and he has been literally writing about this since the ‘70s because he knew that the progress clause of IP clause for program assigned to the useful arts needs to be a part of the copyrighting inquiry on a case based in Korea. I do think he sort of imported a progress clause or his view of it into his analysis. And so it might make sense to look at Golan v. Holder, which also get a very broad read of a progress clause that wouldn’t do a sort of analysis, and think about it in the context of this case as well.

 

Prof. Michael Risch:  So when I teach fair use, I tend to do it from a very realist perspective. So I teach derivative works, transform, etc. And then when we get to fair use, we talk about transformativeness, and what we do is we go through a lot of opinions which transform or not in different ways, and we talk about how the court held on the factors. And I usually wind up saying, "Look, what typically happens in these cases is the court decides whether or not it thinks this should be a fair use. And once it does, then it molds the factors in such a way that it gets you there." The case I use as a best example of this is the Dorling Kindersley cases with the Grateful Dead coffee table book where they take the Bill Graham posters and they shrink them down to small size and re-telling the history in the coffee table book. And we read this case that just fawns over the transformativeness of how this poster was made small so that you could re-tell the history.

 

      And then I take a poll of the students how transformative is this? And most of the students agree it is not really that transformative. It's the whole poster. It's just small. But at the same time, it may well be a fair use to put in a coffee table book because you know you can't fit a whole big poster in there, and in order to make a book like that or a documentary or whatever, you've got to be able to take bits and pieces of stuff and put it all together. And then everybody charge a large license, the book will cost a gazillion dollars. And you just can't do that.

 

      So the court may well think it's a fair use. And when it does, then it kind of molds the factors and the tools to get there. And so I think this is just another one of those cases. It's going to go on the list. This should be a fair use. My view is that this should have been an allowed thing whether you called it filtration or fair use. I prefer filtration from a doctrinal standpoint. But the realist in me says the Court basically got there the way it should have gotten there which is to use the context to allow it. And the problem, of course, is you wind up with language where it seems to overblow what the things are in the same way that case overclaims that shrinking down a concert poster is somehow transformative.

 

Prof. Sandra Aistars:  I think that is a very realist view, but that doesn't do much for the person who is in the position of trying to clear rights or decide whether they need to clear rights as an artist looking to make a documentary film or quote something in a book or build the next new software product. So basically, what we're suggesting, unfortunately, is that there is like some new amorphous public benefit and deepness factor that has been announced and that we've all always sort of known is there lurking in the background for any decision that a court makes, right? That we'll back into it if we have to to get to the right results. But we don't really like to talk about that as lawyers or as crooksters.

 

Prof. Michael Risch:  I totally agree. I totally agree, but I'm not sure that changed with this case.

 

Prof. Sandra Aistars:  Yeah.

 

Prof. Michael Risch:  In fact, arguably this case actually made it easier for APIs. It may have mucked it up for other things later down the road, but for APIs it's pretty clear you don't need a license after this.

 

Prof. Zvi Rosen:  It's interesting, because my reaction is that it definitely mucks it up more. So I didn't want the Court to take the case. Obviously, they don't care what I think. But I worried they would get the case and just make a mess, and that's pretty much what they did. You can talk about whether or not there should have been clear rule, but I think it's reasonable to say that fair use has been swallowing infringement. This case definitely goes much farther towards that. It goads very amorphous standards. It's not clear when they apply, these sort of broader standards.Wwhether they're announcing a market test is much broader. It could have been in a simple clarifying case, and instead they have just made clear it's not ten times harder, but even harder.

 

Prof. Michael Risch:  That's interesting because I actually thought not taking the case was actually going to do more damage.

 

Prof. Sandra Aistars:  So there are a couple of points that have come up in the chat as we have      been talking that relate specifically to software. And one that I think is interesting is that the decision did not mention interoperability except incidentally in a quotation. Any idea of why this is so?

 

Prof. Zvi Rosen:  I feel like it may not have said it, but in talking about it.

 

Prof. Michael Risch:  I think it was dodging -- it didn't want criticism because there was debate about interoperability because Google didn't implement everything exactly. And so Oracle basically said, "Well, you're not really interoperable."

 

      And I guess the other point is its technically not interoperability, right? It's not that two things needing to work together. It depends on how you define it, right? You wanted the people's code to be interoperable with the new compiler or interpreter, but it wasn't two computers talking to each other. And so it may be the Court was being savvy about that for a variety of different reasons because after the Federal Circuit, that really was the -- you know I wrote a blog post about how you needed interoperability, and people said, "Well, it wasn't really interoperable. Therefore it was infringement." And I was like, "You don't have to be one hundred percent interoperable to have it not be infringement." But folks on both sides disagree about that.

 

Prof. Sandra Aistars:  So I guess other folks are pointing out it's not so much interoperability. It's re-implementation.

 

Prof. Michael Risch:  Right.

 

Prof. Sandra Aistars:  So the other point that someone was making in the chat is a question to you, Professor Risch. Do you think the distinction that the Court makes between declaring code an implementing code changes the conclusion you made about APIs not needing a license?

 

Prof. Michael Risch:  I don't think so because declaring code is really just a specification for an API. As a previous commenter said that computer scientists don't even consider it code really because all it is is basically the format of what your commands have to look like in order to be understood by the compiler. And so that really is different than the code that actually makes the commands do what they do which Google -- nobody disputes Google wrote from scratch.

 

      And so after this, the Court saying, "Look, the declaring code is part of the API and that's fair use." So I think there's not going to be -- I think there might be disputes down the road. We'll see. There's actually a pending case out here in Pittsburg about where there was just an injunction granted where somebody made a competing fireworks controller. Basically, you send a few bits down the line, and it shoots off fireworks. And somebody else said, "Well I can make a controller that receives those same bits and shoots off the fireworks." And the court said, "Well, you're infringing because you receive the same bits and you do the same thing." That's exactly the Google v. Oracle case. I think that case goes the other way after the Supreme Court outcome.

 

Prof. Sandra Aistars:  So there's another thing that I wanted to touch on in terms of the fair use analysis that I'm pretty sure Justice Thomas and Alito pointed out in the dissent, if I'm remembering correctly, but it certainly bothered me anyway, is that the majority opinion seemed to almost be announcing like a -- or coming close to like a bright line test because they were so focused on applying a purely mathematical analysis regarding the amount-used factor and pointing to the fact that, "Oh, you only used one percent of the actual code in Oracle." And then with respect to that, I think this is what Thomas and Alito said, "Well, by the way, you're applying your mathematical calculations to the wrong set of code. You should be applying it not to the entirety of the code but to the declaring code alone." So it wouldn't be one percent in that case.

 

      What do you think of that? To me, it was troubling because you're ignoring things like the heart of the work, doctrine, and I'm just concerned that by being so specific about a purely mathematical test, you are giving people this false sense of confidence that, hey maybe there is actually a bright-line rule. And I can't tell you how many times I have people coming to me in the clinic and saying, "Hey, if I only use 30 seconds of this song, is that okay?" Or, "I've heard that if you only take like 10 pages of a book, it's okay." Or, "If I ask three times and don't get an answer, that means it's okay." So what do you guys think about that?

 

Prof. Zvi Rosen:  I think like you say. I think the dissent is correct to point out that it's sort of misuse of statistics. I think, of course, you could, consider a work as a whole, but you also have the whole issue of a heart of a work. I don't know if I would necessarily take that as the new approach for fair use, although maybe it will be. But I think you have the fair use guidelines. The authors who write them try to update them with opinions. So maybe they'll run with it and say that. But it seems to me really like -- I'd be very wary of using that formulation for guidance going forward. It seems to me much more of a justification than an argument.

 

Prof. Michael Risch:  I tend to agree. I didn't read it as, well, it's only one percent, therefore, it's not. I read it more as a refutation of, “look, they're saying they copied so much,” but it actually wasn't that much when you consider how large the code base was, not "and therefore it's not enough." I think they could have also added -- but right, I mean, if the dissent has it's way, Breyer also adds, "And it wasn't to the heart of the work because it was an API," that actually makes it worse, right? For the dissent's view. So in that sense, you're better off not having the discussion of the heart of the work if you are for stronger copyright protection. Because I think Justice Breyer could easily have said, "No matter how much it was, this couldn't be the heart of the work because it's not the implementing code." And then all of a sudden he's casting aspersions on the importance of declaring versus implementing code, and I don't think anybody wants that because people who write APIs will tell you it actually does take time and creativity and thought into how you do it. And you don't want to minimize that. And so, I don't know, that's a tough one. But I agree; it shouldn't be a fixed percentage, although I'm not sure that I read it that way when I read it.

 

Prof. Sandra Aistars:  Yeah, I don't think the Court was announcing a fixed percentage, just to be clear. I'm calling out the risk that people will read it that way incorrectly as people are want to read all sorts of things incorrectly no matter how carefully you write them. And when it comes from a Supreme Court opinion, they tend to wave it around far more forcefully.

 

      So I want to turn also to the issue of the Seventh Amendment and whether fair use must be decided by a jury. But actually, there was one more question that I wanted to ask from the chat, which was, what are lower courts supposed to do with this opinion?  Beyond the question of its applicability to other classes of works are there concerns that Breyer's opinion incorrectly instructs lower courts on how to conduct an infringement analysis? For instance, skipping straight to the fair use analysis, how to handle the market effects factor issues with transformativeness, etc.

 

Prof. Michael Risch:  I think there are cases where courts go to fair use first and have in the past. So I don't know if it changes that. You have opinions. Some of the most famous copyright opinions assume a core fact, like the Nichols opinion that everybody learns in law school about the levels of abstraction by Judge Learned Hand. He says, "I'm going to assume this was copied" but even if it was, the stuff that would have been copied is at the higher level of stuff that's not really protected. Now, does that mean tell district courts, "You know what? Never look at whether something's copied?" Maybe. Maybe not.

 

      So I think appellate courts tend to do that all the time. And I think you can rely on advocates to brief the things that are important and then district courts can address all of them, I suppose. But on APIs, I don't think we're ever going to see a district court opinion on it again. I think everybody will go right to fair use because they're going to be like, "why should we fight about this?"

 

Prof. Zvi Rosen:  The whole thing about fair use, that’s a fact-specific inquiry in theory. And so usually you would say, "Oh, well courts should look at that later and instead look at sort of initial questions first where it's a straightforward issue." But I think if the courts are able to get to fair use early, they'll do it early. I think that's not going to be a change. But it is perhaps a disturbing signal that if they didn't do the foundational inquiry here, and I do think you may see some more courts doing it that wouldn't have otherwise. But I don't think it's going to be like flipping a switch.

 

Prof. Sandra Aistars:  So let's turn for a moment to the Seventh Amendment issue. So I'll start just by saying that the issue was injected into the case a little bit late in the game. It wasn't really briefed very much by the parties. I think there were like little briefs, a couple of pages in length, that were submitted very late in the game. But in some ways, this could have been the most important issue, from a practical perspective, for everyone involved because if the court had ruled that every fair use instance, every time a fair use defense is asserted, it has to be decided by a jury, that could have been disastrous for people on -- whether you're arguing or defending a fair use defense because I think fair use is most often decided on summary judgment motions, not by a jury. And I could just imagine how astronomical the lawyer fees would be. As somebody who works pro bono in a clinic, I would not be collecting them. But those folks who have to pay their lawyers to argue jury trials, I think that whether you're defending or whether you're asserting claims, access to justice could have gotten a whole heck of a lot more expensive.

 

      So I'd like for you to comment on that issue. Do you think the majority's analysis was correct? Do you think this was an instance of kind of practical results-oriented approach maybe here as well? Professor Risch? And then just as a warning to you, Professor Rosen, since you are someone who likes to write about the history of IP, I think this was an instance wherein -- perhaps the first time that an appellate panel reversed jury findings on fair use, and that's why this came up in this case. And I think the Court's opinion was heavily influenced by the history and the kind of older history, if you will, about whether particular trial decisions and their analogs would have been decided by a jury at the time of the founding of the republic. So I'd love your comments on that after we hear from Professor Risch.

 

Prof. Michael Risch:  So I wrote about this after the Federal Circuit opinion. I called it a "unicorn case." It actually got cited in one of the briefs to the Court, which was nice, because I agree that there were no other cases. But one thing I wrote about when I said that was to the pro-Google people who were unhappy with what the Federal Circuit did was that for years, right, folks have been using court-based fair-use decisions as a way to get -- to find fair use to get rid of cases. So it seemed unclear to me why you would expect it to be the other way. Why it would be a one-way ratchet that the Court only decides there is fair use but can never decide there is no fair use. So I think the Supreme Court got it right in that sense. I'm not a Seventh Amendment expert, but based on what I know about the history of fair use and the reason we have it and how it came about, it really is sort of this mixed law and fact type of thing much like obviousness in patent law, where the court makes these decisions. And so, to me, I think they did the right thing.

 

      Now the question is, what are you going to do in the future when there really is a disputed fact about fair use? My gut says there were in this case but in most cases there won't be. But in some cases there might about like, what market attempts, etc.? So in that sense, one thing the Supreme Court did that was really interesting, and I think important on the jury side, is this ruling about bad faith. Because I can see parties saying, "You can't decide, judge, because we need to try the issue of bad faith." But now the Court has said, "You know what? Bad faith is not as issue. That does not get you a jury trial or any other kind of trial on the merits."

 

      And so you may see -- I think it's one of those things that's just going to keep going status quo, quite frankly. We didn't see a lot of jury trials on fair use before, and we're not going to see them again. We only saw one in this case because the Court didn't really rule on it the first time, the last time.

 

Prof. Sandra Aistars:  Yeah. Is transformativeness, even though not an articulated factor, is that for the jury or is that for the judge?

 

Prof. Michael Risch:  I think the facts that lead to transformativeness, what you did, will be factual and probably largely undisputed. But I think whether it's transformative will be a judge decision. It will be one of the factors would be my gut. So if there's a dispute about how Andy Warhol made the art, where he got the prints, right—the Prince prints, if you will—that may mean a trial. But once that's done, the court decides whether what he actually did is transformative.

 

Prof. Zvi Rosen:  So to take us back to the origin of fair use, I'm not really aware of that because even back in the day where a jury trial was needed. In Folsom v. Marsh, I don't think was a jury trial. And, of course, fair use really evolved as part of the infringement analysis, and it really came to be separated out as it came to be its own thing. I mean it was really pretty narrow when it started. And the origins have been necessarily an equitable exception to infringement, and so then infringement could be an issue for a jury were to be facts, and then the judge could say, "Oh yes, but it's fair use" or whatever early formulation there is.

 

      And I also find if I'm litigating going forward, Justice Thomas' comment that he wouldn't have ruled on fair use here but he pretty much agrees is definitely cold water on someone trying for it. Anyway…

 

Prof. Sandra Aistars:  So we, I believe, are about five minutes out from the end of the session so I want to give you each a few minutes to kind of give your closing thoughts on the case, its impact, your thoughts for the future. I'll start with you, Professor Rosen.

 

Prof. Zvi Rosen:  Sure. So there's been a lot of speculation about why this fairly short opinion took eight months, and how come there is no discussion of copyrightability issue. I think that they probably wanted to write a different opinion. This is whether or not Justice Breyer leaves the Court this term or in a few years. He's not going to be around that much longer, most likely. And he really decided to push this idea, and I have a little quote here, that, "To the extent that Google used parts of the Sun Java API to create a new platform… its use was consistent with that creative ‘progress’ that is the basic constitutional objective of copyright itself."

 

      And whether that is a comment on computer APIs or something much broader is going to be the giant question going forward because there are all of the other caveats, and I wonder if the justices' demanded them to sign his opinion, saying that we’re not changing fair use. He also says, and I quote: "Do not overturn or modify earlier cases involving fair use." The tension between those lined in the opinion is going to be the future of this, and it could either really narrow it or it could potentially be big. I'm inclined to think this is going to be interpreted narrowly because I don't know what we do otherwise. But I can't rule that out of being the alternative.

 

Prof. Sandra Aistars:  Thank you. Professor  Risch?

 

Prof. Michael Risch:  I tend to agree with that. With respect to the software industry, it's telling that the last time a case like this came to the Supreme Court was more than 20 years ago, and it was split -- for those who don't know, it was split by, again, only eight votes. I don't know what it is about these cases. They can only get eight people for them. But it was a 4-4 split at that time in the Lotus v. Borland case. And it took more than 20 years to get another case that basically offered the same issues in an impactful enough way that it made it to the Supreme Court. So for the software industry, as I said, I think it's going to be business as usual.

 

      As for everybody else and what this does for fair use, I tend to agree it's unclear. There will be nuggets that people use in their cases. In that sense, I think this case is going to wind up being much like Harper & Row which, as I mentioned earlier, was a case about a portion of President Ford's autobiography which got scooped, and a very small section was re-printed in a magazine pre-print. And the Court did not like the pre-print scoop. And there's all sorts of language that comes from that case, and people cite it here and there. It's cited in this opinion. But it's one of those cases where the impact on the book industry was relatively narrow, right? Don't scoop. Don't scoop. And even then, Congress had an exception that they wrote in that said even that could still be fair use. But the nuggets remain. And so I think we're going to see nuggets of this remain but they will be cited along with all the nuggets from all the other cases that exist. And so this won't be like a watershed case.

 

Prof. Sandra Aistars:  Thank you to you both. This has been enlightening and entertaining, for me at least, I hope also for the attendees. And I will, with those thanks from me, turn it over to our host, Nick Marr.

 

Nick Marr:  Thanks very much. And a special thanks on behalf of The Federalist Society to our panelists and to our moderator for giving and taking the time on this Friday afternoon to discuss this important case and to our audience for calling in, your great questions. As always we welcome your feedback by e-mail at [email protected]. Also be checking your e-mail on our website for announcements about upcoming Teleforum calls and Zoom events like this one. But for now and until those next events, everyone have a great weekend. Thanks for calling in. We are adjourned.

 

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Dean Reuter:   Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society's Practice Groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.