It is true that much has been made (including by me) of reported changes made by certain research analysts in their estimates of future performance. Let’s come back to that after we look at the facts on the prospectus.

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SimpleAir said that the agreement was confidential and did not announce terms of the deal.

The Marshall, Texas-based company sued Apple back in September 2009. A trial had been set for April, but the two companies reached a tentative deal at the courthouse just before the case began, SimpleAir said.

The firm has also sued a number of other companies in the mobile space, including Microsoft, Nokia, Sony Ericsson (now a part of Sony), Samsung, LG, Huawei and HTC.

SimpleAir bills itself as “an inventor-owned technology licensing company with interests and intellectual property in the wireless content delivery, mobile application, and push notification market spaces.”

Image by Joy of Tech

Samsung officials tell the Korea Times that the two companies were unable to come to a clear agreement resolving their differences. Sources close to Samsung confirmed to AllThingsD that this was indeed the case.

Evidently the talks — which ran for about 16 hours over Monday and Tuesday — began and ended at an impasse, with Apple continuing to insist that Samsung “slavishly” copied the design of its iPhone and iPad, and Samsung demanding that Apple pay royalties on the wireless patents it believes the company infringed.

Given the level of animosity between the two companies at this point, it was really hard to imagine any other outcome. Locking Apple CEO Tim Cook and Samsung CEO Choi Gee-sung into a room for two days and hoping they’d emerge bosom buddies brandishing a settlement was always a bit of a pipe dream. Note that Apple last Friday filed a motion for injunction against Samsung’s Galaxy Tab 10.1, angling to have the device yanked from U.S. shelves as soon as early June. And the week before that, it accused Samsung of destroying email evidence.

Not really the behavior of a company that’s looking for two days of easygoing mediation talks and an amicable resolution to the legal issues at hand.

As FOSS Patents’ Florian Mueller recently told Reuters, “This dispute isn’t ripe for settlement. Under the present circumstances, the two companies’ delegations should spend a couple of fun days in Yosemite Park or Napa Valley, rather than meet in court only to pretend they’re being constructive.”

Apple declined comment on the outcome of the talks.

The case heads to trial on July 30.

(Image courtesy of Joy of Tech)

So says Samsung design VP Chang Dong-hoon, who today took exception with claims that the Galaxy S III is “the first smartphone designed entirely by lawyers.” According to Dong-hoon, the Galaxy S III boasts a design that has gone through hundreds of iterations, all quarterbacked by Samsung’s market-leading design team. “Our change in smartphone design is part of a five-year plan, not a sudden turnaround,” he told reporters at the 2012 Seoul Digital Forum.

So the aesthetics of the S III are the result of a natural evolution and not the intervention of Samsung’s legal team. If you’ve got an issue with its design, blame Samsung’s designers, not its lawyers. Or, better yet, buy a different phone.

On Monday, a U.S. International Trade Commission judge ruled one of Kodak’s key patents invalid, undermining the photography pioneer’s efforts to assert it against Apple and Research In Motion. In his decision, ITC Judge Thomas Pender wrote that while some Apple and RIM products did indeed violate some claims of Kodak’s 6,292,218 patent, the patent itself, which covers the ability for a digital camera to preview images on an LCD screen, is invalid.

The ’218 patent is referred to by some as the “crown jewel” of Kodak’s portfolio, so Pender’s ruling is potentially a major blow to the company, which is looking to maximize the value of its IP ahead of a bankruptcy auction. Indeed, just last week Kodak accused Apple of attempting to undermine its efforts by asserting ownership claims over the ’218 patent.

“Apple’s decision to press its ownership claims now … should be seen for what it is, namely, a ploy calculated to prevent the debtors from using the [bankruptcy] sale process to obtain a fair price for Kodak’s digital capture portfolio (or to enable Apple to buy it on the cheap and extinguish its infringement exposure),” Kodak said in court documents filed last week.

It seems now that the ploy was a wasted effort. There are few better ways of extinguishing a company’s infringement exposure than having the patent asserted against it ruled invalid. And, as RIM noted in a statement issued Monday afternoon, Pender is the second ITC judge to rule the ’218 patent invalid.

That said, Apple and RIM aren’t entirely out of the woods yet. Kodak plans to appeal Pender’s ruling to the full commission. And it says it’s confident it will prevail in the end, since the U.S. Patent and Trademark Office confirmed ’218’s validity in 2010.

Regardless, Pender’s ruling couldn’t come at a worse time. Sources say that Kodak has been looking to attract a stalking-horse bidder who would put down an initial offer for its patent portfolio as it gears up for its bankruptcy auction. Having the patent that’s at the center of its high-profile battle with Apple and RIM tossed aside by the ITC isn’t going to aid that effort.

At issue here is a patent covering the ability for a digital camera to preview images on an LCD screen. Apple sued Kodak over the technology, claiming that Kodak “misappropriated” it when the two companies were working together years ago. Kodak — which filed for bankruptcy in January and is looking to sell off this patent, along with a host of others, to pay off its creditors — insists that Apple’s ownership claim is “baseless.” And now it’s arguing that Apple’s intent, by alleging misappropriation, is simply to avoid paying royalty payments on it, or to drive the patent’s value down so it can purchase it at a lower price.

“Apple’s decision to press its ownership claims now … should be seen for what it is, namely, a ploy calculated to prevent the debtors from using the [bankruptcy] sale process to obtain a fair price for Kodak’s digital capture portfolio (or to enable Apple to buy it on the cheap and extinguish its infringement exposure),” Kodak said in court documents filed earlier this week, adding that Apple’s ownership claim has already been “squarely rejected” by an International Trade Commission judge.

And, to some extent, it does have a point. Apple didn’t file suit against Kodak until nine years after the patent was first issued, and decades after the two companies worked together on exploring how best to commercialize Apple’s digital camera technologies.

But then, Kodak didn’t sue Apple until 2010, amid the collapse of its finances and a looming Chapter 11 filing. So if Apple’s decision to press ownership claims nine years after the fact is a ploy, then what is Kodak’s decision to assert this patent against Apple a year ealier? A ploy to drive up the patent’s price in advance of a sale?

Just another business negotiation being carried out in the courts …

How serious? Does $2.2 billion and 15 percent EBIT profits sound serious to you? It does to me, and also to Deutsche Bank analyst Chris Whitmore.

Having slogged through Oracle’s 72-page document dump with a better eye for detail than mine, Whitmore noticed a line in a January 2010 email from Dave Donatelli, now head of HP’s Enterprise Group (specifically Exhibit 17, for those who want to scroll through and find it) saying that HP’s Business Criticial Server business combined with its Technology Services business, which includes the support and services associated with the Integrity line of servers that uses the Intel-made Itanium chip, was at that time larger on a revenue basis than HP’s personal computer business.

The same document, he says, showed that at the time, HP’s “owned operating profit” for the combined hardware, software and services tied to the business of selling and supporting Itanium servers was about $2.2 billion. All in, HP derives — or at least at that time derived — about 15 percent of its profits on an EBIT basis from Itanium and related businesses.

No wonder, then, that HP considered Oracle’s March 2011 decision to stop creating software that runs on the Itanium chip so earth-shattering that it hauled the software giant into court last June. That case is expected to head to trial any day now.

The disclosure is the clearest sign yet of how much HP stands to lose if its Business Critical Server business can’t recover. It has always been known to be a highly profitable business; exactly how profitable was a closely guarded HP secret. But sales of Business Critical hardware have been on the decline. In 2009, sales of BCS hardware were $2.6 billion. In 2011, they had fallen by 19 percent to $2.1 billion. And in the quarter ended Jan. 31, sales were $405 million, down 27 percent from the same period in 2011.

The uncertainty about Itanium’s future is one of the many reasons that Whitmore has been particularly bearish on HP’s turnaround prospects: “Given the growing uncertainty around the long-term viability of Itanium, we expect customer defections to continue, if not accelerate in future periods,” he wrote in a research note to clients, issued yesterday.

However, much as HP lawyers would like to argue that Oracle’s motivation is to help bolster long-flagging sales of its new Sun Microsystems hardware unit, Whitmore argues that the main benefactor is IBM: “While Oracle is responsible for shining a bright light on Itanium’s precarious future, it is probably doing IBM the biggest favor. … We expect IBM to be the greatest beneficiary of Itanium defections and view Power [IBM's server chip] as the market consolidator and eventual standard in the UNIX/RISC server market over the medium to longer term.”

And even if HP prevails in its suit, Whitmore isn’t seeing much benefit: “Regardless of the outcome of this particular suit, we expect HP-UX customers to continue fleeing what is increasingly looking like a dead platform — creating a major headwind for HP’s medium-term earnings.” Ouch.

They’re not quite as juicy — Oracle has always had the better flair for the dramatic in this case — but in releasing them, HP clearly intends to paint Oracle, the new owner of Sun Microsystems, as out to hurt HP by kicking it straight in the teeth by damaging its Business Critical Server operation.

The first of the batch is an instant message exchange between some Oracle sales guys, who happen to use salty language in relation to HP. (Sorry about that.)

The second appears to show that Mark Hurd, while still CEO of HP, was informed about Intel being both aggressive and excited about a forthcoming version of the Itanium chip, which would seem to run contrary to the argument Oracle has made that Intel was prepping for the Itanium line’s end of life, while allowing HP to lie about it to its server customers. In the message, Martin Fink, who figured so prominently in Oracle’s document dump today, writes to Hurd: “I’m not sure what exactly this means, but I have rarely seen Intel so agressive on anything to do with Itanium EVER, and they are working very hard to get this moving forward.”

Another, from February 2011, appears to show Oracle unwilling to release a security software patch for a version of one of its applications that runs on HP-UX and therefore on an Itanium-based server. Another from the same day is an email from Oracle CEO Larry Ellison to Thomas Kurian, senior vice president of Oracle’s server technologies, asking if support documents had been updated to specify “no more one-off patches for Itanium.” The date is key because Oracle first announced that it would no longer support Itanium systems on March 23 of that year. It should surprise no one that the top echelons of Oracle management knew this announcement was coming.

The next is an email showing HP getting ready for a big strategy launch. “Kinetic” was HP’s internal name for a strategy that leveraged all of HP’s IP that enabled mission-critical products into a cohesive whole. Plans for Kinetic included extending HP-UX and Integrity, HP’s line of Itanium-based servers, indefinitely, as well as bringing up X86 chips, like Intel’s more mainstream Xeon, under the “mission critical” umbrella. As HP sees it, this was the plan all along.
 
Finally the last one is another IM exchange between Oracle sales execs. Toward the end, one of them complains about being forced to sell Sun hardware that is described as a “pig with lipstick at best.” Again as HP sees it, once Oracle owned Sun it had every motivation to do whatever it could to hurt HP, including ducking out of previously contracted commitments.

As I did with the Oracle dump this morning, I collated everything into a single PDF. I think I got everything in chronological order this time. Read for yourselves!

HP-Itanium-docs.pdf

The documents were released as part of a new offensive by Oracle to ratchet up the pressure on HP and take its case to the marketplace — that HP and Intel had already planned to bring an end to the Itanium chip’s life, and that HP lied to its customers about the chip’s long-term future.

HP has long denied Oracle’s contention, and has tried to portray this as Oracle’s failure to live up to its end of a contract.

In an open letter to affected customers, Oracle said it was releasing the documents in order to allow customers to “make your own decision” on the matter:

Dear Customer:

A little over a year ago we announced that we would no longer be developing new versions of Oracle’s database and other products on the Intel Itanium platform due to our strongly held belief of Itanium’s imminent end of life. We ensured our Itanium customers would have an easy transition to the platform of their choice by committing to 10 years of support for existing Oracle software running on Itanium.

Hewlett Packard strongly disagreed with our characterization of Itanium’s future and launched an immediate campaign designed, in their words, to foment “customer outrage.”

At this time, there are many documents that have been disclosed through litigation that describe the true state of Itanium in Hewlett-Packard’s own words. Rather than us interpreting this situation for you, we thought we would give you access to the public HP documents so you can make your own decision regarding your investments in Itanium technology.

After reading these documents we are confident that you will agree with our decision, taken with the best interest of our joint customers in mind.

Sincerely,
Jeb Dasteel, Senior Vice President and Chief Customer Officer
Oracle

Bloomberg Businessweek got its hands on some of these trial exhibits, but in its posts this morning — and presumably in the tech section of this week’s magazine — stuck to a fairly limited set of highlights. And in fact there’s not so much that’s surprising, if you read my story on the unredacted version of Oracle’s cross-complaint from January.

Basically, the new documents add more color and a lot more tension to the state of the HP-Intel relationship over the production of the Itanium chip. It also lends a lot of weight to Oracle’s narrative heading into that trial: That HP relied heavily on profits earned from multiyear sales and support contracts with customers who bought its Integrity servers that run Intel’s exotic and expensive Itanium chip. In support of that, it paid Intel nearly a half-billion dollars to keep the chip alive, despite the fact that, outside of HP, there was no other single vendor using Itanium chips.

In the emails, Intel, for its part, certainly looks like it wants out of the business of making the chip, but is willing to accept HP’s money to keep churning them out. Asked at one point what would happen if HP didn’t pay a certain amount to Intel, Intel would — in the words of Martin Fink, then-head of HP’s Business Critical Server business — shut down the teams producing certain chips that were in the process of being designed, and slap “high fives all around.”

On its face, there’s nothing inherently wrong with HP paying Intel to keep making a particular chip. HP had customers willing to buy these servers, and it made money supporting them, so paying Intel to keep them coming — remember, HP for all intents and purposes, is the only vendor buying this chip — was more or less a cost of doing business.

However, Oracle’s argument has been that HP refused to play straight with the wider marketplace, insisting that Itanium would be around for many generations to come. Even Intel itself insisted that was true last year, when Oracle first announced that it would stop making new applications that support the chip, which of course led HP to sue last June.

AllThingsD has compiled all of these documents into a single 75-page document; you can read the entire collection below. They’re ordered by exhibit number rather than chronological order. I’ll probably have more to say as I go through them.

HP just sent a statement:

“Intel has provided unequivocal and repeated statements to the marketplace that Itanium is not at an end of life. The undeniable fact is there is committed support for Itanium that extends out toward the end of this decade. Statements that Itanium was at or near an end of life are false. With the unsealing of court filings, the public can see the undisputed facts of Intel’s Itanium roadmap clearly showing a long and sustained future for Itanium.”

An Intel spokesman had no comment, saying it is not a party to the lawsuit.

Update: So let me try to curate these documents a bit. They cover a time period beginning in August 2007, and go through to April 2011. In the first, (Ex. 6) Fink writes to another HP exec and says, “Intel dropped a bomb on us last night” during a meeting that included talk of “canceling Poulsen,” a future version of the Itanium chip that was on internal road maps. Poulson, for the record, is Intel’s code name for a 32 nanometer version of Itanium that was to be released sometime this year. The response: “Call Pat G,” referring to Pat Gelsinger, the once very senior Intel executive who was at one time widely considered to be a possible successor to current CEO Paul Otellini, but is now the COO at EMC, and likely to be its next CEO. Fink’s response: “I did, spent an hour … This was a high tension call.” Intel was worried that an HP server was being built using a competitor’s chip, presumably one from Advanced Micro Devices.

From there, skip forward to Exhibit 43. The email to Fink from Scott Stallard, now a retired HP exec, details a discussion with Intel’s Tom Kilroy, then VP of its enterprise business. The message to Intel: “Don’t possibly signal to the world” the end of the Itanium road map.

The next document is notes from a meeting between Intel and HP led by Otellini and then-HP CEO Mark Hurd in September of 2007. According to those notes, Intel’s Kilroy concedes that the then-current core used to build the Itanium chip has reached its end of life, and that there are two paths forward, one expensive, the other painful — a “crash landing.” Otellini then says that Intel can’t continue to lose money on the product. Hurd goes on to say that HP had by that time sold a combined $9 billion worth of Itanium-based servers, and that it “would be hard to walk away from those customers.”

Otellini then says, according to the notes, that “we need to address the inevitable on the future of Itanium.” Both sides then agree that over the next several years they’d like to glide toward using Intel’s more plentiful and more mainstream Xeon server chips, and essentially keep Itanium alive until 2013. Intel then proposed a new business model that would turn Intel essentially into a contractor for HP. Its goal would be not so much to make money on the Itanium business, but to stop losing money on it. Hurd agrees to take a serious look at the numbers.

Next in line is Exhibit 55, in which Stallard outlines the November 2007 Intel proposal to HP. The key point: HP would pay Intel $488 million over five years to keep building Itanium chips. It includes provisions for an annual “true up,” where Intel gets paid for any difference between its costs and what HP has already paid it for that year. Stallard writes: “So you ask, why should that be that we are forced to true up Intel to break-even? lt is because Tom [Kilroy] says Paul [Otellini] has been consistent on one thing all along, that if we do any other scenario than Tukvale (e.g. shut down the business early) then “Intel can’t lose any (more) money on this thing.’”

Next is Exhibit 15, a PowerPoint deck outlining the strategic rationale for HP to consider buying Sun Microsystems. Key phrase: HP-UX, its version of Unix developed specifically for Itanium servers, “is on a death march” because of Itanium’s inevitable demise. The slide also shows HP’s worries concerning a scenario in which IBM acquires Sun. The key phrase there: Such a deal “Isolates and exposes HP-UX as 3rd tier player, accelerates our decline (product/service) as customers look to consolidate vendors.”

We all know what happened instead: Oracle acquired Sun in 2010 and, in a stroke, took over its server business, giving Oracle an obvious motivation to cut its support for Itanium and hurt its new rival HP in the process. I’ve hit a few high points here, but I think you can get the gist from a careful reading of the documents below.

Update: I’ve re-uploaded the exhibits to Scribd in more logical order, so you don’t have to skip around. Sorry if that was confusing before.

Oracle Itanium Exhibits Chronological

New documents in the case came public yesterday, essentially spelling out Judge James Kleinberg’s ruling from May 1 in turning back Oracle’s motion for summary judgement. It’s not a terribly big deal, because both sides asked for summary judgement and failed to get it, as happens nearly all of the time in cases that get this far.

One key piece of their dispute arises from the fact that when they settled another lawsuit in 2010, stemming from Oracle’s hiring of former HP CEO Mark Hurd, there was, as HP argues, a provision included requiring Oracle to continue making software that supports servers running Intel’s exotic Itanium chip. A good deal of the fighting between the companies at trial is going to revolve around this point, and whether or not that agreement is enforceable or even exists. What that provision called for, essentially, was for Oracle to continue supporting Itanium as it had previously.

A key paragraph in the judge’s ruling:

“In the Court’s view, it is not unreasonable to interpret the Reaffirmation Provision as imposing a prospective obligation on Oracle to continue to offer products for HP’s platforms; the plain language is readily susceptible to that interpretation. If the prior, existing obligation before [Mark] Hurd’s hiring involved a clear and consistent practice in which Oracle offered its product suite on all HP platforms without written porting agreements or payments, then the Court sees no inherent contradiction in ‘reaffirming’ that this arrangement will continue going forward.”

Both sides in this case never miss an opportunity to poke each other in the eye with public statements. HP struck first last night:

“HP is pleased that the Court ruled that the language in the HP/Oracle agreement can be interpreted to require Oracle to continue porting its software products to the HP Integrity platform, as Oracle did for years before the agreement. As the ruling states, Oracle’s interpretation would make the agreement ‘illusory’ and ‘should be rejected.’ We look forward to trial, where the details of Oracle’s deliberate, anti-customer business strategy to drive hardware sales from Itanium to inferior Sun servers will be revealed.”

But it’s important to remember that HP lost its motion for summary judgement, too. Also, didn’t HP convince the judge that the Itanium provision of the Hurd settlement agreement means exactly what it thinks it does? At least that’s how Oracle attorney Dan Wall saw it, in a statement sent to AllThingsD this morning.

“HP cannot be happy with this decision. The Court did not accept HP’s interpretation of the Hurd settlement agreement; in fact, it rejected out of hand the most recent version of HP’s argument, which equated the contract with terms HP proposed, but Oracle rejected. HP’s lawsuit, like Itanium itself, is living on borrowed time and will never succeed.”

Anyway, the 29-page judge’s opinion that kicked off this latest pretrial PR salvo is below:

endorse_80790_203163_A

Image by Joy of Tech

The allegation, made earlier this month in a motion discovered by Network World, claims Samsung destroyed “vast quantities of relevant evidence in blatant disregard of its duty to preserve all such evidence.” Samsung, it seems, routinely purges emails from custodian computers and, according to Apple, has continued to do so despite its duty to preserve evidence to the case.

From Apple’s motion:

Samsung’s ad hoc, unmonitored email ‘preservation’ methods have resulted in the irretrievable loss of unknown volumes of relevant emails. … For example, Judge Grewal recently compelled the deposition of Won Pyo Hong, the head of Samsung’s Product Strategy Team, in part due to an email in which Dr.Hong ‘directly orders side-by-side comparisons of Apple and Samsung products for design presentations.’

Apple and the Court cannot possibly know how many more emails Dr. Hong sent or received that would have supported Apple’s claims that Samsung copied Apple products had they not been deleted.

Harsh allegations, and ones that Samsung has decried as baseless. That said, this isn’t the first time the company has been called out for meddling with a discovery order. Just last week it was sanctioned by a California judge for withholding evidence. This just two weeks after another sanction for another failure to provide internal documents on a timely basis. Apple, in its motion, notes other instances as well.

So, as I said: Messy, and getting messier by the day. Which doesn’t bode well for the companies’ upcoming court-ordered mediation talks on May 21 and 22.

(Image: Joy of Tech)

Asked to decide whether Google had infringed upon Oracle’s copyrights to certain parts of the Java programming language, the jury agreed that it had. But then, when asked to decide on four specific examples of that infringement, jurors could agree on only one: The rangeCheck method in TimSort.java and ComparableTimSort.java. Don’t ask me to explain exactly what it is, but it is being described widely as “nine lines of code.” And, unfortunately for Oracle, the damages it can collect are limited to somewhere in the neighborhood of $150,000 to $200,000, or less than pocket change for either company, not the $1 billion or more Oracle had said it wanted.

Jurors were also unable to decide if the portions of Java code that it copied could be protected by the long-established doctrine of Fair Use, under which certain infringements can be excused. Google lawyers pounced on this, and said they would move for a mistrial.

The conclusion is that Oracle proved at least part of its argument, but failed to prove the dramatic injury it said it had suffered. It also proved that Google knew that it needed a license to Java in order to use the portions of Java that it did use. The complication there was the fact that one flavor of Java is compatible with other flavors of Java: It still operates under the old “write once, run anywhere” principle that Sun Microsystems envisioned when it created Java. Oracle still wants Google to take out a commercial license that would require Google to maintain Java compatibility with other platforms.

Still undecided — and this is the big issue that has the eyes of the software industry watching this case closely — is whether Oracle can prevail on the issue of protecting software APIs using a copyright in the first place. Jurors were instructed to proceed under the assumption that this was a matter of settled law, when in fact it is not. Judge William Alsup will decide on this issue later, and it is unclear exactly how the jury verdict in the first phase of this case will affect his decision.

Had Oracle won a more ringing endorsement from the jury, that portion of the argument might seem to be stronger. It’s an important point that Google argued against, saying APIs shouldn’t be subject to copyright protection, because they’re more like tools and techniques that programmers use to build software. You can copyright a given program because it’s unique, but you can’t copyright the language it’s written in. The possibly strained analogy I came up with before is this: You can copyright a musical composition like Miles Davis’s “So What,” but you can’t copyright the form of music known as jazz.

Oracle argued at trial that copyright law offers the only proper protection for original expression in software, mainly because software advances are incremental, building upon previous advances and innovations. Laws governing trade secrets and patents don’t get the job done. Oracle lawyers contended that copyright law, while still imperfect, protects innovations and advances at a more granular level, but mainly against copying.

Also still ahead is the patent phase of the trial, where Oracle will assert that Google violated Java patents in building Android. After that, there will be a third phase, where the two parties will wrangle over damages. So far, it seems — unless Oracle prevails in the patent portion — that there won’t be much to wrangle over.

At least for now, it appears that Google has escaped the worst of Oracle’s accusations. That was the conclusion of shareholders of both companies. Google shares rose by more than 2 percent on the news of the verdict yesterday, closing at $607.55 a share. Oracle shares fell by more than 1 percent to close at $27.92 a share. The case isn’t over, and Google hasn’t exactly come out of it looking virtuous. But if the point of defending against a lawsuit is to escape paying huge monetary damages, Google won the day.

Embedded below is the filled-out jury questionnaire:

Verdict

“The court is well aware that it is being played as a pawn in a global industry-wide business negotiation,” Robart lamented after reserving judgment on the motions of Microsoft and Motorola for a later date. “The conduct of both Motorola and Microsoft has been driven by an attempt to secure commercial advantage, and to an outsider looking in, it has been arbitrary, it has been arrogant and frankly it appears to be based on hubris.”

Which, if you’ve been following these cases, is a reasonably accurate assessment. Using litigation to squeeze exorbitant licensing fees out of a rival for intellectual property is becoming par for the course in negotiations like those between Microsoft and Motorola, and as Robart points out, not only is that a drag, it’s often a waste of everyone else’s time.

As the AP has it, the jury has decided against Google on Oracle’s copyright claim, but has reached an impasse on some key questions. There’s obviously more to this story as it develops. I’ll be updating as soon as I know more.

Update: The jury sided in part with Oracle, ruling that the Android mobile operating system infringes on some Java copyrights. However, it was deadlocked over the question of whether that use constituted “fair use,” and was therefore protected. This impasse appears to be the basis for a mistrial motion that Google lawyers say they intend to file.

Oracle has not prevailed on every point and, in fact, it’s looking like a messy victory. The jury found code in two files to be infringing, and that some elements of Android application programming interfaces or APIs were similar to Oracle’s Java APIs.

Attorneys for Google told Judge William Alsup that they intend to file a motion for a mistrial because of the impasse over the “fair use” question. Alsup told both sides to be prepared to argue that motion, which will come later.

A few other things are coming up: Judge Alsup still has to rule on whether APIs can be copyrighted as a matter of law. Jurors were instructed to deliberate, assuming that they could be copyrighted.

There is a clear finding that Google has infringed on nine lines of code. This came in Question 3A, concerning something called RangeCheck in Java. They decided that Google hadn’t infringed on two other blocks of code. With the jury out of the room, Judge Alsup said that there is “zero finding of copyright liability” on anything other than the nine lines.

That’s good for Google, because Oracle’s own expert at trial said they’re not worth much. An Oracle attorney suggested that the company should receive a share of Google’s profits on top of regular damages. Judge Alsup rejected that as “bordering on the ridiculous.”

From Google:

“We appreciate the jury’s efforts, and know that fair use and infringement are two sides of the same coin. The core issue is whether the APIs here are copyrightable, and that’s for the court to decide. We expect to prevail on this issue and Oracle’s other claims.”

And here’s Oracle’s statement:

“Oracle, the nine million Java developers, and the entire Java community thank the jury for their verdict in this phase of the case. The overwhelming evidence demonstrated that Google knew it needed a license and that its unauthorized fork of Java in Android shattered Java’s central write once run anywhere principle. Every major commercial enterprise — except Google — has a license for Java and maintains compatibility to run across all computing platforms.”

For reference, I’ve embedded the questionnaire that the jurors were required to fill out:

Jury Questions

Judge William Alsup is starting to talk about opening arguments for phase two of the trial, which will focus on patents. A third phase, assuming Oracle prevails, will focus on determining damages.

There was a false alarm late Friday when CNET and Bloomberg News reported that a partial verdict had been reached, when in fact it hadn’t. This happened after it became relatively clear that jurors were stuck and unable to agree on all four questions they have been tasked with answering.

Jurors have been asked to decide if Google’s use of 37 sections of Java source code — which Oracle owns, having acquired Sun Microsystems in 2010 — constitutes copyright infringement; or if, as Google argues, the copied sections are so insignificant as to amount to “no big deal.”

Oracle sued Google in 2010, after closing the Sun deal. Google stands accused of using some parts of Java to create Android without having first obtained the relevant licenses — first from Sun, then from Oracle — that, among other things, required compatibility with other flavors of Java.

U.S. District Judge Lucy Koh ruled this week that the discovery phase of the class-action lawsuit will proceed and ordered Apple to turn over relevant documents to the plaintiffs’ legal team by May 17, without any “game play.”

An unfortunate turn of events for Apple, which fought to have the case tossed, arguing that the plaintiffs have so far failed to prove that they suffered any injury at Apple’s hands.

Apple did not respond to a request for comment on the ruling.

Jurors have reached no conclusion in the case and Judge William Alsup has sent them home for the weekend with instructions to try again on Monday.

The jury had indicated Thursday in a note to Alsup that it was stuck on some point. Alsup warned lawyers for both sides that they might have to prepare for a deadlocked jury. Obviously, the situation here is fluid. I’ll have more in this post as it comes in.

There are four questions the jurors are tasked to answer, and they’re said to be unanimously agreed on three of them, but unable to reach consensus on the fourth, though its unclear which are which.

For what its worth, below is the form with the four questions the jurors have to answer.

Jury Questions

Filed by Robert Chmielinski, the suit alleges Nokia misled investors by promising that its transition to Microsoft Windows Phone platform would reinvigorate its flagging smartphone sales.

“Defendants told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not,” the lawsuit states. “This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected. Nokia expected its first quarter 2012 non-IFRS Devices & Services operating margin to fall by 3%, and projected first quarter 2012 Devices & Services net sales of €4.2 billion.”

The lawsuit further alleges that Nokia fumbled the launch of the Lumia 900, shipping it with a glitch that ultimately forced it to offer customers an automatic $100 refund, “making the phone essentially free.”

Which is true, of course. But how ironic is it that a shareholder outraged over the slow pace of Nokia’s nascent transition to Windows Phone is suing the company, a move that will arguably further slow that pace by distracting management and drain away further resources?

And c’mon: the Lumia line isn’t even a year old yet. It debuted in Europe last November.

Asinine.

Robbins Geller, the law firm representing Chmielinski, says it seeks to recover damages on behalf of all purchasers of Nokia’s shares.

Nokia, for its part, says it will defend itself against the suit, whose allegations it believes to be “without merit.”

Jury Blog

Judge Lucy Koh of the U.S. District Court for the Northern District of California this week ordered both companies to reduce the size of the sprawling case to make it more manageable for the jury. Understandable, considering the case involves 16 patents, six trademarks, five “trade dress” claims and antitrust allegations spread across 37 products.

“I think that’s cruel and unusual punishment to a jury, so I’m not willing to do it,” Judge Koh told Apple and Samsung. “If you’re going to trial in July, this is not going to be acceptable.”

The companies have until Monday to reduce their claims to a manageable level. If they’re unable to do so, Koh may push the trial date back to 2013.

(Image Credit: Jury Blog)

The jury has had the case since Monday, and as yet there’s no indication of when its deliberations will be complete.

The basic questions jurors are wrestling with concern whether and how it is or isn’t okay for a company to copy portions of software code that would otherwise require a commercial license. Also looming large over the proceedings is whether or not a programming language can by itself by protected by copyright. Oracle lawyers argued at trial that it can, but this is by no means a legal slam dunk.

Google lawyers, for their part, argued that the copying was insignificant, or “no big deal whatsoever.”

Oracle sued Google in 2010, after acquiring Sun Microsystems and becoming the owner of the Java programming language. Google stands accused of using some parts of Java to create Android without having first obtained the relevant licenses, first from Sun, then from Oracle, a license that among other things required compatibility with other flavors of Java.

Once the jury comes back, which could be as soon as today (but we thought that earlier this week), the trial will shift to a second phase over patents. After that, assuming Oracle prevails in one or both of the first two phases, a third phase will determine the amount of damages, if any. The full trial is expected to last two months.

Lots of people are waiting on the outcome of this first phase, however. To all of them, I dedicate Tom Petty’s “The Waiting.”

Nokia on Wednesday filed patent infringement lawsuits against HTC, Research In Motion and ViewSonic in the U.S. and Germany. All told, there are 45 patents at issue, covering everything from dual-function antennas and multimode radios to application stores and data encryption.

“Many of these inventions are fundamental to Nokia products,” Nokia’s chief legal officer Louise Pentland said today in a statement. “We’d rather that other companies respect our intellectual property and compete using their own innovations, but as these actions show, we will not tolerate the unauthorized use of our inventions.”

Presumably, the company would be quite happy to tolerate authorized ones for licensing fees that would boost its flagging quarterly numbers. Which, for Nokia, is really what this is all about: establishing a new revenue stream while awaiting broader adoption of its new Lumia Windows Phones.

Reached for comment, RIM declined to offer one.

HTC had only this to say: “HTC has been a licensee of Nokia on wireless essential patents since 2003. We are waiting to receive a complaint and won’t have any comments until our legal team has received and reviewed it.”

ViewSonic has not yet replied.

In his appearance, McNealy said that, as he remembers it, Google was asked to take out a commercial license on Java. “There is a Java specification license document available,” he said, that didn’t contain any financial requirements, but it did require compatibility.

McNealy had been called as a witness by Oracle, and on the stand he said that it was Sun’s practice to let other companies use Java, but only with a commercial license, and that its primary requirement was that the licensee ensure that Java remain compatible.

While numerous other phones from the likes of Nokia, Research In Motion and Motorola were compatible with Java applications, those on Android weren’t. Compatibility is one of the main points over which Oracle has been arguing with Google. Oracle contends that not only did Google violate its patents and copyrights, but it then went on to build its own incompatible version of Java, fracturing one of the oldest premises of Java’s existence: Write once, run anywhere.

McNealy is also running a poll on Twitpolls, asking people to vote for which side they agree with. (Google is ahead as of this morning.)

Who is right in the Oracle vs. Google lawsuit? reply w/ #oracle #google #neither #both http://t.co/aWdhzPbO

May 1, 2012 1:44 pm via GetTwitPollsReplyRetweetFavorite

@scottmcnealy

Scott McNealy

And he promotes a similar poll on his own new venture’s site, Wayin.com, where, as of this morning, the vote is favoring Oracle.

Meanwhile, the jury is still out, and the world is still waiting for a verdict. It could come today.

Anyhow, here’s the video of McNealy’s six-minute TV interview: