The legal dispute between Google and Oracle over the use of Java APIs in the Android operating system took a step forward last night but the issue, which could have far reaching consquences for the future of software IP,  has still yet to be concluded. 

A San Francisco jury decided that Google had indeed infringed on Oracle’s copyright by using Java APIs without a license. However, the jurors could not agree on whether Google is protected by the ‘fair use’ terms of US copyright law, which allow portions of copyrighted work to be used in other creative products, such as musicians using short clips of other artists work in their own songs.

The jury also found that Google had infringed on nine lines of Oracle code, but cleared the Google of infringing manuals for Oracle’s APIs. But Oracle’s claim for the infringed code will not be worth more than $150,000, the Associated Press reported, based on early statements in the trial.

"We appreciate the jury’s efforts, and know that fair use and infringement are two sides of the same coin," Google said in a statement after the verdict. "The core issue is whether the APIs here are copyrightable, and that’s for the court to decide. We expect to prevail on this issue and Oracle’s other claims."

"The overwhelming evidence demonstrated that Google knew it needed a license and that its unauthorized fork of Java in Android shattered Java’s central write once run anywhere principle," Oracle said. "Every major commercial enterprise — except Google — has a license for Java and maintains compatibility to run across all computing platforms."

Oracle had been seeking up to $1 billion in damages, and had suggested that it should receive a share of Google’s profits from Android. Judge Alsup, who presided over the case, dismissed this as "bordering on the ridiculous".

During the trial, Judge Alsup revealed that Google made a loss on the Android operating system in 2010. Reading the contents of sealed document submitted by Google showing profit and loss for the Android operating system, Judge Alsup revealed that Android made "a big loss for the whole year".

The trial continues, with jurors now hearing testimony on Google’s alleged violation of two of Oracle’s Java patents.

Whether or not using APIs without a license falls under "fair use" copyright exemption could have significant implications for the software industry. Unauthorised use of APIs for application integration is common, especially in cloud computing.

Last week, the European Court of Justice made a relevant ruling, following a dispute between analytics software vendor the SAS Institute and a UK company called Worldwide Programming. The latter had analysed SAS’ proprietary programming language, SAS Base, to develop a system that could run programs that had been written in it. SAS sued Worldwide Programming for breach of the terms of its license, but the European Court ruled that while software code itself can be subject to copyright, the way in which it functions cannot.