Introduction

India has seen a phenomenal rise in the number of rest API technology-based startups these last five years. In 2021, India saw a total of nearly $42 billion in investments, a steep rise compared to the $11 billion in investments seen in the previous year. Technology-based startups in India make up a large share of the total investments in India, consisting of industries such as fintech, edtech, and health-tech, to name a few. India has also seen the growth of 46 homegrown startups reaching unicorn status (companies with $1 billion valuation). As is evident, there is an increasing trend towards fostering innovation and spirit of entrepreneurship in the country, for which the government has launched several initiatives, one of them being Open rest API for 5 key programmes:

Aadhaar;

E-KYC (Know your customer);

E-Signature;

Proposed privacy protected data sharing;

United Payments Interface.

These initiatives by the government proved to be revolutionary, especially the United Payments Interface (UPI), which was widely accepted and utilized by extremely successful startups like BharatPe and PhonePe. Such initiatives also aided in increasing the number of unicorns in India wherein the largest unicorns proved to be from the fintech sector. Innovation in technology has proven to be at the forefront of a startup revolution in India, and thus adequate impetus and protection must be allocated to those pursuing further heights in the industry.

What are APIs?

Open APIs and Intellectual Property are topics that overlap each other. In simple words, an rest API or Application Programming Interface is a standardized connectivity interface that details how software components are supposed to interact with each other. Information aggregator sites like travel websites use APIs to gather information from multiple airline websites and present comparative options to the consumer for their choosing. Another example can be ordering medicines from your local pharmacy online, where an API takes note of your order and sends in the request for your prescriptions to them. Public APIs provide developers an opportunity to build an application using the API without seeking prior approval from the creator and without requiring to pay licensing fees. This enables the government and companies to foster innovation in the technological sphere and create a favourable competitive environment for further advancements.

API and Intellectual Property protection

Many applications used by consumers in the present day use the functionality of  rest APIs from other applications to assist in creating interoperability between different platforms. This process has been common for the developer community for years. However, with the ongoing debate of whether APIs can be copyrighted, and if they can, whether using them by third party developers comes under the exception of Fair Use under the Copyright Act, it is difficult to ascertain the legal position of APIs today.

In the case of Oracle v. Google, this subject is still being dealt with. The initial accusation by Oracle was that Google has verbatim replicated 37 packages in Java’s API (which are owned by Oracle subsequent to their acquisition of Sun microsystems) for its Android Software Development Kit (SDK). Initially, Google and Sun were at the negotiating table for the licensing of the Java APIs as used by Google; however, these negotiations quickly reached an impasse, and after Oracle’s acquisition of Sun, their initial stance of embracing open-source platforms quickly turned strategic, and they brought legal action against Google. It is important to understand the vast reaching impact of this case. In 2012, Google won the first round under the District court, which held up the Merger Doctrine which prohibits anyone from claiming copyright on any work whose expression has merged with an idea or restricted to one or few ways to express it. The court also held that the command line code used by Google for its 37 rest API packages were used for interoperability purposes making it a “method of operation” under Copyright exceptions in US Copyright Act, 1976.

Aggrieved by this, Oracle then appealed the case to the Court of Appeals for the Federal Circuit, which promptly overturned the lower court’s decision, rejecting Google's contentions and stating that the district court should not have referred to the Merger and scènes à faire doctrines for determining copyrightability but rather as limitations to infringement of copyright, and should not consider them as exceptions to copyright. The Federal court also held that the merger doctrine extends to the creative expressions available to Sun when it created Java, and not when Google copied it. Furthermore, the court also held that upholding the copyright of compilations of words and phrases in the code would not be barred as under the short phrases doctrine. In the year 2016, the case found itself in a district court jury trial for arguing fair use; the decision albeit went in Google’s favour stating that their use of 37 API Java packages and the declaring code were all subsisting the current fair use policies. This was described to be not just one of the most prominent fair use jury trials in the country, but also as a defining moment in understanding the position of intellectual property when it comes to APIs.

Conclusion

The decisions taken in the legal disputes between Oracle and Google have been landmark judgments in the field of intellectual property and software development. These judgements impact not just companies like Google and Oracle, but also software developers from all walks of IT. These judgments could determine the fates of several developers who use rest APIs for interoperability between systems and software and whether API license holders can now use this opportunity to target developers who might have used their APIs for any such innovation or commercial-driven purpose. In India, no such legal development has been decided; however, with the ever-growing potential of the Indian IT sector, it would not be a surprise for Indian courts to take cognizance of this issue sooner rather than later.

Author: Vidisha Singh - a student of New Law College, Bharti Vidyapeeth University , in case of any queries please contact/write back us at support@globalpatentfiling.com or Global Patent Filing.