What the panel essentially did was continue to apply Ninth Circuit law as it has existed since the 1989 Johnson Controls case holding that the sequence, structure, and organization (so-called "SSO") of a computer program may be entitled to copyright protection depending on the facts of a case. Judge Alsup had not disregarded this precedent but had found what in my view were superb ways of treating APIs in particular in a special way that rendered the copying of their SSO non-infringing - to wit, acknowledging that developing an API was even highly creative, a structure of this type, functioning as a method for compatibility only, should not in itself be protected by copyright but should be protected, if at all, only if it rose to the level of warranting patent protection. How he got there was somewhat complex given that this is a complex area of law. But that is where he had landed. The result, as a matter of policy, was very clean for developers: it gave the courts a workable roadmap for moving the copyright analysis into conformity with the modern digital age on the critical area of APIs and inter-operability without the need of having Congress address the issues.
This panel did the exact opposite. It held that, when it comes to the subject matter of copyright, if a form of expression meets the threshold of being "original," that is enough to make it copyrightable no matter what its function. If the developer of an API had to make creative choices in deciding how to set up the SSO of the API (and almost certainly he will), then the API is protectible and any attempt to copy the same SSO is infringing on its face, subject only to fair use and similar defenses. In so holding, this panel vigorously reasserted the Johnson Controls precedent that has hung over SSO analysis in the Ninth Circuit for many years - meaning, in the case of APIs, it is for a jury to determine case-by-case whether any particular SSO is protectible by copyright. The panel here by no means disregarded the concerns and issues raised by Google (and highlighted in Judge Alsup's decision) but it relegated them to being a potential defense under fair use analysis for acts that are otherwise presumptively infringing. The result: stronger IP protection for APIs and a wealth of uncertainty created for developers in trying to work with inter-operability issues in our modern age.
This case sparked intense interest and drew upon many top lawyers on both sides to argue the issues. It is by no means some hack result. Indeed, it could be argued to be far more in line with Ninth Circuit precedents than Judge Alsup's decision. It can be appealed further, possibly to the full Ninth Circuit complement of judges and possibly to the Supreme Court, and who knows whether it will be upheld or not.
But the really sad thing is the missed opportunity. This was a chance to bring clarity and order to an otherwise muddled area of law and this panel, rightly or not, chose to go back to the muddle. Should it ultimately be upheld, the only real solution in light of this is for Congress to amend the Copyright Act to do a carve-out for APIs to enable them to get special handling under the law to facilitate inter-operability.