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Google Beats Oracle on $9 Billion Copyright Claim

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Google won a jury verdict that kills Oracle Corp.’s claim to a $9 billion slice of the search giant’s Android phone business.

Oracle contended that Google needed a license to use its Java programming language to develop Android, the operating system in 80 percent of the world’s mobile devices. Jurors in San Francisco federal court on Thursday rejected that argument and concluded Google made fair use of the code under copyright law.

A decision against Google had the potential to give significantly more weight to software copyrights, and to spur litigation to protect those added rights. Oracle — which started the trial at an advantage with the judge explaining that it had already been established that Google had infringed Oracle’s copyrights — plans to appeal, though legal experts said overturning a jury verdict will be difficult.

Google relied on witnesses including former Chief Executive Officer Eric Schmidt, who is now chairman of parent company Alphabet Inc., to convince jurors that it used Java to innovate, rather than merely copy code. Before joining Google, Schmidt worked at Sun Microsystems developing and marketing Java. Oracle acquired Sun in 2010 and Schmidt was involved in Google’s failed licensing negotiations that spurred the copyright-infringement lawsuit filed that year by the database maker.

Schmidt told jurors that, based on his “many years of experience” with Java, he believed Google was permitted to use the APIs — the shortcuts that allow developers to write programs to work across software platforms — without a negotiated license, as long as the company relied on its own code. Sun promoted them as “free and open,” and not sold or licensed separately from Java, he said.

Central to Oracle’s bid for what would have been one of the largest jury verdicts in U.S. history was its claim that Google has reaped $21 billion in profit from more than 3 billion activations of Android. Oracle sought damages of $8.8 billion, plus $475 million in what it claims was lost licensing revenue.

Appeal Grounds

“We strongly believe that Google developed Android by illegally copying core Java technology to rush into the mobile device market,” Oracle General Counsel Dorian Daley said in a statement. “Oracle brought this lawsuit to put a stop to Google’s illegal behavior. We believe there are numerous grounds for appeal.”

Google relied on a “free-market” argument, said Tyler Ochoa, a professor at Santa Clara University School of Law who has followed the case closely since it was filed in 2010.

Google claimed it was within its rights to use the organization and labeling of the Java code to develop Android because programmers were already familiar with them, Ochoa said. Google’s message was that “Oracle shouldn’t ‘own’ programmers simply because they had taken the time to learn Java,” Ochoa said.

Ochoa was one of 41 academics who agreed with Google that the code at issue didn’t merit copyright protection and urged the U.S. Supreme Court to review the case. The high court last year declined to take it.

Android Ecosystem

“Today’s verdict that Android makes fair use of Java APIs represents a win for the Android ecosystem, for the Java programming community, and for software developers who rely on open and free programming languages to build innovative consumer products,” Google said in an e-mailed statement.

Oracle won a 2012 verdict that Google infringed its copyrights, but that jury couldn’t agree whether it was justified under the fair use legal doctrine. That set the stage for the second trial, featuring many of the witnesses from four years ago as well as the same judge, William Alsup.

Both sides leaned on powerful Silicon Valley personalities to put a shine on technology-laden arguments.

Ten Commandments

Oracle Co-Chief Executive Officer Safra Catz invoked the Ten Commandments to characterize Google as acting above the law. Catz told jurors that, at a bat mitzvah in 2012, Google General Counsel Kent Walker told her, “You know, Safra, Google is this really special company, and the old rules don’t apply to us.”

“I immediately said, ‘Thou shalt not steal,’” Catz testified. “It’s an oldie but goodie.”

Witnesses for Google said the company didn’t need a license for the Java’s application programming interfaces, or APIs, to build Android.

In cross-examinations of those witnesses, Oracle’s lawyers hit upon a disconnect between their testimony and selected e-mails while Android was being created. The messages showed Google executives and engineers were concerned that they needed, and didn’t get, a license for Java.

‘Making Enemies’

Google co-founder Larry Page was confronted with a 2005 internal e-mail posing the question of whether to drop the use of Java for Android or press ahead, “perhaps making enemies along the way.”

Page responded, “Obviously we didn’t do the first one.”

Michael Risch, a law professor at Villanova University School of Law in Pennsylvania who’s been following the case, said it will be difficult for Oracle to overturn the jury verdict because an appeals court will have to conclude the instructions to jurors on the legal issues in the case were flawed.

Before the verdict, Risch said the outcome was a “toss-up” and that it may not have been well-suited for a jury to decide.

“There should be a clear set of guidelines that allow companies to know when they may reuse functional aspects of another company’s copyrighted work, and submitting a fair use question to a jury fails in all respects,” Risch said.

The case is Oracle America Inc. v. Google Inc., 10-cv-03561, U.S. District Court, Northern District of California (San Francisco).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Oil Prices Decline on Rising India COVID-19 Cases, U.S Inflation Concerns

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Global oil prices extended a decline on Friday following a 3 percent drop on Thursday as coronavirus cases rose in India, one of the world’s largest oil consumers.

Brent crude oil, against which Nigerian oil is priced, declined by 35 cents or 0.5 percent to $66.70 a barrel at 5 am Nigerian time on Tuesday while the U.S West Texas Intermediate (WTI) fell by 28 cents or 0.4 percent to $63.54 per barrel.

The commodity super cycle rally just hit a hard stop and the energy market doesn’t know what to make of Wall Street’s fixation over inflation and the slow flattening of the curve in India,” said Edward Moya, senior market analyst at OANDA.

The crude demand story is still upbeat for the second half of the year and that should prevent any significant dips in oil prices,” he added.

Prices dropped over a series of key economic data that stoke inflation concerns and forced experts to start thinking the Federal Reserve could raise interest rates to curb the surge in inflation.

An increase in interest rates typically boosts the U.S. dollar, which in turn pressures oil prices because it makes crude oil more expensive for holders of other currencies.

This coupled with the fact that India, the world’s third-largest oil consumer, recorded more than 4,000 COVID-19 deaths for a second straight day on Thursday, dragged on the oil outlook in the near term.

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Brent Crude Rises to $69 on IEA Report

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Oil prices rose after the release of the International Energy Agency’s (IEA)  closely-watched Oil Market Report, with WTI Crude trading at above $66 a barrel and Brent Crude surpassing the $69 per barrel mark.

Prices jumped even though the agency revised down its full-year 2021 oil demand growth forecast by 270,000 barrels per day (bpd) from last month’s assessment, expecting now demand to rise by 5.4 million bpd. The downward revision was due to weaker consumption in Europe and North America in the first quarter and expectations of 630,000 bpd lower demand in the second quarter due to India’s COVID crisis.

The excess oil inventories of the past year have been all but depleted, and a strong demand rebound in the second half this year could lead to even steeper stock draws, the IEA said yesterday, keeping an upbeat forecast of global oil demand despite the weaker-than-expected first half of 2021.

However, the upbeat outlook for the second half of the year remains unchanged, as vaccination campaigns expand and the pandemic largely comes under control, the IEA said.

Moreover, the global oil glut that was hanging over the market for more than a year is now gone, the agency said.

“After nearly a year of robust supply restraint from OPEC+, bloated world oil inventories that built up during last year’s COVID-19 demand shock have returned to more normal levels,” the IEA said in its report.

In March, industry stocks in the developed economies fell by 25 million barrels to 2.951 billion barrels, reducing the overhang versus the five-year average to only 1.7 million barrels, and stocks continued to fall in April.

“Draws had been almost inevitable as easing mobility restrictions in the United States and Europe, robust industrial activity and coronavirus vaccinations set the stage for a steady rebound in fuel demand while OPEC+ pumped far below the call on its crude,” the IEA said.

The market looks oversupplied in May, but stock draws are set to resume as early as June and accelerate later this year. Under the current OPEC+ policy, oil supply will not catch up fast enough, with a jump in demand expected in the second half, according to the IEA. As vaccination rates rise and mobility restrictions ease, global oil demand is set to soar from 93.1 million bpd in the first quarter of 2021 to 99.6 million bpd by the end of the year.

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OPEC Expects Increase In Global Oil Demand Raises Members’ Forecast on Crude Supply

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The Organisation of Petroleum Exporting Countries (OPEC) yesterday lifted its forecast on its members’ crude this year by over 200,000 bpd and now expects demand for its own crude to average 27.65mn bpd in 2021.

This is almost 5.2mn bpd higher than last year and around 2.7mn b/d higher than an earlier estimate of the group’s April production.

According to the highlights of the organisation’s latest Monthly Oil Market Report (MOMR), OPEC crude is projected to rise from 26.48 million bpd in the second quarter to 28.7 million bpd in the third and 29.54 million bpd in the fourth quarter of the year.

The report also indicated a fall in Nigeria’s crude production from 1.477 bpd in February to 1.473, a difference of just about 4,000 bpd before rising again in April to 1.548 million bpd, to add 75,000 bpd last month.

OPEC stated that its upward revision of members’ crude was underpinned by a downgrade in the group’s forecast for non-OPEC supply, which it now expects to grow by 700,000 bpd to 63.6mn b/d against last month’s report’s projection of a 930,000 bpd rise to 63.83mn bpd.

The oil cartel projected that US crude output would drop by 280,000 bpd this year, compared with its previous forecast for a 70,000 bpd decline.

On the demand side, OPEC kept its overall forecast unchanged from last month’s MOMR, stressing that it expects global oil demand to grow by 5.95 million bpd to 96.46 million bpd this year, partly reversing last year’s 9.48mn bpd drop.

Spot crude prices fell in April for the first time in six months, with North Sea Dated and WTI easing month-on-month by 1.7 percent and 1 percent, respectively.

On the global economic projections, the cartel said stimulus measures in the US and accelerating recovery in Asian economies might continue supporting the global economic growth forecast for 2021, now revised up by 0.1 percent to reach 5.5 percent year-on-year.

This comes after a 3.5 percent year-on-year contraction estimated for the global economy in 2020.

However, global economic growth for 2021 remains clouded by uncertainties including, but not limited to the spread of COVID-19 variants and the speed of the global vaccine rollout, OPEC stated.

“World oil demand is assumed to have dropped by 9.5 mb/d in 2020, unchanged from last month’s assessment, now estimated to have reached 90.5 mb/d for the year. For 2021, world oil demand is expected to increase by 6.0 mb/d, unchanged from last month’s estimate, to average 96.5 mb/d,” it said.

The report listed the main drivers for supply growth in 2021 to be Canada, Brazil, China, and Norway, while US liquid supply is expected to decline by 0.1 mb/d year-on-year.

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