Opinion

Startups Need the Supreme Court to Keep APIs Open

By Abby Rives
October 2, 2020 at 5:00 am ET

Next week, the Supreme Court will hear oral argument in the long-running dispute between Oracle Corp and Google over whether fundamental tools of software development can be subject to copyright infringement claims. This may seem like an expensive fight between two large and wealthy companies, but it is much more significant than that. Should Oracle prevail, it would expose startups and software developers across the country to substantial new risks, generate a great deal of litigation, and throw up sizable barriers to innovation and startup growth.

One type of software interface is at the core of this case — the application programming interface, or API. APIs create interoperability and compatibility between computer programs, letting products and services communicate with each other. Unsurprisingly, they have been essential to foster growth and reduce costs for startups and developers. Using existing APIs allows entrepreneurs to more affordably build software that can connect and exchange information with larger systems.

An API is like listing an item on a restaurant’s menu. You can order a “burger,” and the restaurant knows what to bring you. And that order is much easier than explaining all the details to a chef — the ingredients, how they should be chopped and combined, the precise cooking temperatures, etc. — or making the burger yourself from scratch. Moreover, you can go into numerous restaurants across the country, order a burger, and expect to get approximately the same thing. An entrepreneur starting a new restaurant will want to put a “burger” on the menu, instead of selling a “beef sandwich” or expecting customers to dictate full recipes. The same reasoning goes for entrepreneurs launching tech startups.

Because APIs are fundamentally functional, they are not the sort of software that deserves expansive protection under copyright law. (Just like one restaurant should not be able to sue another for copyright infringement over listing a “burger” on a menu.) While some components of software are eligible for copyright protection, the law correctly excludes functionality. Indeed, developers have historically and routinely treated APIs as exempt from copyright protection.

With its current litigation campaign, Oracle is seeking to upset settled expectations for software developers across the country in ways that would have a chilling effect on innovation and startup growth.

If APIs were eligible for copyright protection, and using them were not a permissible fair use, then every startup would suddenly be at risk of multiple lawsuits because they built their software using what they understood to be unprotectable APIs. Moreover, the scenario would likely give rise to “API trolls” — entities that would acquire old software copyrights and threaten to sue today’s startups over the use of incorporated, old APIs.

In addition, if the Supreme Court were to agree with Oracle, it would make launching a startup or developing new software prohibitively expensive. Indeed, startups — companies with limited resources, operating on thin margins and relying on outside funders — would have the most to lose. Startups and developers would have to consider purchasing licenses to all the various software interfaces they might conceivably need. (As the alternative, potentially ruinous litigation over any development project involving APIs, would be untenable.) That licensing would be a time-consuming and costly process that many early-stage companies could not afford. And nascent startups would be at an inherent disadvantage in those license negotiations: They would be bargaining with “API owners” who had veto power over whether the startup would be allowed to make a compatible program.

At the end of the day, extending copyright protection to APIs would mean only large, established companies could afford to operate, because they would be the ones that could afford to license (or litigate over) APIs or forego interoperability. Startups, on the other hand, have a unique need to access APIs. Without them, startups would have to build everything completely from scratch and their basic ability to launch and compete would be threatened.

Over the long and winding course of this lawsuit, the district court has repeatedly gotten it “right,” finding that APIs are functional and not the sort of thing companies can claim copyright to. That same court oversaw a jury verdict concluding that, even if APIs are copyrightable — which they should not be — using them as Google did is a permissible fair use. Hopefully the Supreme Court will see this case the same way. Otherwise, startups would have to brace for a lot more litigation and copyright trolling. And ultimately, fewer startups and small developers would be able to launch innovative, competitive new products.

 

Abby Rives is IP counsel at Engine, a policy, advocacy, and research organization supporting startups.

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