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Jury rules for Google on fair use in Oracle fight

A U.S. jury handed Alphabet's Google a major victory on Thursday in a long-running copyright lawsuit against Oracle, saying the law allowed Google's use of Oracle's software to create its Android smartphone operating system.

Shares of Oracle were down about 1 percent after hours. Alphabet stock was up slightly after the announcement.

The jury unanimously upheld claims by Google that its use of Oracle's Java development platform was protected under the fair-use provision of copyright law, bringing trial to a close without Oracle winning any of the $9 billion in damages it requested.

After the ruling, Dorian Daley, general counsel for Oracle said that the company will appeal.

"We strongly believe that Google developed Android by illegally copying core Java technology to rush into the mobile device market," he said.

"Oracle brought this lawsuit to put a stop to Google's illegal behavior. We believe there are numerous grounds for appeal and we plan to bring this case back to the Federal Circuit on appeal," Daley said.

In a retrial at U.S. District Court in San Francisco, Oracle claimed Google's Android operating system violated its copyright on parts of Java, a development platform. Alphabet's Google unit said it should be able to use Java without paying a fee under fair use.

On the heels of the announcement, Google said: "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."

After the first trial, U.S. District Judge William Alsup ruled that the elements of Java at issue were not eligible for copyright protection at all. A federal appeals court disagreed in 2014, ruling that computer language that connects programs — known as application programming interfaces, or APIs — can be copyrighted.

A flood of copyright lawsuits has failed to materialize in the two years since that federal appeals court ruling. That could suggest Oracle's lawsuit will not ultimately have a wide impact on the sector.

Under U.S. copyright law, "fair use" allows limited use of material without acquiring permission from the rights holder for purposes such as research.

During retrial, Oracle attorneys deemed Google's defenses the "fair-use excuse."

The retrial, which lasted about two weeks, featured testimony from high profile executives including Alphabet Executive Chairman Eric Schmidt, Chief Executive Larry Page, and Oracle co-CEO Safra Catz.

— CNBC.com contributed to this report.