From what I understand, the Apache Harmony project was doing a clean room implementation of the Java standard library. There was a clause somewhere (I haven't researched the exact text of this) that said something along the lines of "You must pass the TCK (Java's language test suite sort of like rubyspec http://rubyspec.org/) to be a 'compatible implmentation'," or some such.
Apache Harmony people started writing code and when it got time to say, "Ok, can we have the TCK to validate this?" Sun said, "Yes, as long as you promise no one will run your shit on mobile phones."
If you know the ASF, this sort of thing is wildly against their core mission: to make unencumbered software. So they gave Sun-Now-Oracle the finger.
Now, we need to cover a few bases here. Apache Harmony is not a VM, its an implementation of the standard library. The patent issues Oracle sued over were related to the Dalvik VM. The important point here is that the Dalvik VM is not Java. Its an interpreter for byte code. The byte code that runs on Dalvik will not run on any other VM. People think that Android Java is Java, but its not. Android Java is Java that's been compiled to JVM bytecode and then been translated to Dalvik bytecode (again, IIUC).
The basic point is that 'The Java Language' is not a JVM. It is not a standard library. But there's some weird ass 'Certified Java' thing that can't be obtained unless you give up rights, even though Java is open source.
My reading of this IBM/Oracle tryst is that IBM decided that it could get a "TCK certified" Java implementation by backing OpenJava.
Which is a long way of saying, no, Google/Apache probably can't just create a new Java spec. The JCP et al will prevent such things. Perhaps they could fork and make a RangerRick language that was source level compatible, but something tells me these people employ too many lawyers for that to go over well.