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Google offers Oracle percentage of Android revenue as patent damages

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Google proposes to pay a percentage of Android revenue to Oracle, if Oracle is successful in proving patent infringement.

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Google added an interesting twist yesterday to its defensive strategy against Oracle's claims of patent infringement with a proposal to pay a percentage of Android revenue to Oracle, if Oracle is successful in proving infringement. On its face, that may seem like a big gamble for Google, but it's really not. There are only two patents remaining in the case — US RE38,104 and US 6,061,520 — and Google is only offering to pay a total of $2.8 million for any past infringement of those patents. On the issue of future payments, Google proposes an ongoing royalty to Oracle of up to .015 percent of Android revenues for the '520 patent, which expires in 2018, and up to .5 percent for the '104 patent, which expires this December. Those are relatively tiny numbers given what's at stake in this case — and perhaps more interesting, it's not exactly clear how Google is defining Android revenues since we know it's technically a free operating system, but we assume it's somehow linked, at least in part, to ad revenue from the platform.

What's .5 percent of free?

Oracle's response to this proposal is simply that Google's numbers "are lower than Oracle contends are appropriate." That's not surprising given the huge damage numbers we've seen thrown around in this case over the last year. But while the dollar amount Google is proposing might seem trivial, this case isn't really about the patents anymore. Oracle's primary focus for some time now has been on its claims that the Android platform infringes its copyrights. The patents have become secondary and are likely more useful in helping Oracle convey a narrative of infringement to the jury than actually providing meaningful leverage in the case. With a final settlement conference ordered by the court to take place by April 9, it'll be interesting to see if there's a chance that the parties will resolve the matter before the scheduled trial begins on April 16. We'll keep an eye on it.