Google, Oracle May Settle as CEOs Continue Negotiations

Google, Oracle May Settle as CEOs Continue Negotiations

Google and Oracle may be heading towards a settlement as the companies’ CEOs meet this week in an attempt to settle Oracle’s claims that Google’s Android infringed on its patents.

Google CEO Larry Page, and Larry Ellison, CEO of Oracle, spent 10 hours Monday discussing the pending lawsuit before a federal magistrate in San Jose, Calif., and are expected to return tomorrow to resolve the case.

Oracle sued Google last year, claiming the Mountain View, Calif.-based search giant did not obtain a license to use Java patents in the Android OS. Oracle claimed Google could owe it as much as $6 billion for back licensing fees, while Google says the licensing should only cost about $100 million.

Taking a strong stance, Oracle says it not only wants billions of dollars in damages, but also wants the court to order products that illegally use its intellectual property are destroyed. While that likely won’t be a part of a settlement agreement between the two companies, the request may force Google to pay up to $15 per Android device to keep the software running, say some analysts.

An early agreement could benefit both companies and avoid a lengthy, costly trial. Google will likely want a flat settlement, rather than a per-device agreement, because the number of devices that use the Android OS is growing rapidly. More than 500,000 Android devices are activated every day, and Android chief Andy Rubin said the platform’s devices are growing by almost five percent per week.

Meanwhile, Oracle likely would rather receive a settlement than an order to shut down Android, a worst-case scenario for Google, which could lose millions of dollars if the devices are shut down.

Earlier this month, a Google engineer admitted he copied parts of Java while developing Android, but Google says the Java programming language was made freely available through Sun, and maintains Android doesn’t infringe on patented materials.

Magistrate Judge Paul Grewal told Page and Ellison they should be prepared for further meetings, beginning tomorrow, that could go up until the end of this month. A trial in the case is scheduled for October 30 and will go forward if the CEOs don’t reach a settlement.

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