Google was going to pay up to $40 million for a critical piece of Android, but talks fell apart (GOOG, ORCL)

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Google was prepared to pay Sun Microsystems $30 to $40 million for a five-year license to use its Java technology in Android, Google Chairman Eric Schmidt testified in court today in the ongoing battle between Oracle and Google. 

But talks broke down and, as a result, Sun got nothing.

Schmidt was testifying for the second day in the latest phase of Oracle's battle with Google over Android.

Oracle bought Sun in 2009, and filed a series of lawsuits against Google beginning in 2010. The latest phase began earlier this year.

According to the Wall Street Journal's account of the trial, the deal between the companies would've put the Java logo in Android and used more portions of Java in it. Former Sun CEO Jonathan Schwartz also testified, saying that talks broke down because Google didn't want to rely on another company for its core technology.

Oracle attorneys also showed emails that suggested Schwartz was unhappy with how Google was using Java. 

At the heart of the lawsuits is the claim that Google should have paid Sun for the right to incorporate certain Java APIs in Android, the smartphone operating system that now ships on more than 80% of smartphones.

The case is a big deal because, if Oracle wins, it means that APIs, which dictate how other programs interact with that software, is copyrightable. That would throw a legal wrench into how software is written and licensed.

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