The issue, under review by the U.S. Court of Appeals for the Federal Circuit in Washington, is being closely watched by software developers in Silicon Valley.
Google's Android operating system is the world's best-selling smartphone platform. The Java programming language was created by Sun Microsystems, which Oracle acquired in 2010. Oracle sued Google later that year, claiming that Google had improperly incorporated parts of Java into Android.
Oracle President and Chief Financial Officer Safra Catz, who took the stand during trial last year, appeared in court on Wednesday to hear the appellate arguments. She declined to comment outside the courtroom. Google attorney Robert Van Nest also declined to comment.
The case examined whether computer language that connects programs - known as application programming interfaces, or APIs - can be copyrighted.
At trial in San Francisco last year, Oracle claimed Google's Android tramples on its rights to the structure of 37 Java APIs. Oracle sought roughly $1 billion on its copyright claims.
Google argued that Oracle cannot copyright the structure of Java, an open-source or publicly available software language. U.S. District Judge William Alsup ruled that the Java APIs replicated by Google were not subject to copyright protection and free for all to use.
Oracle appealed. At the hearing on Wednesday, Federal Circuit Judge Kathleen O'Malley questioned whether Alsup's ruling meant Google could similarly use APIs from companies like Apple or Microsoft.
"This would apply to every possible computer program out there," O'Malley said.
Google attorney Robert Van Nest said that was true, but that Google still cannot copy actual source code from competitors. Google spent over two years and millions of dollars writing source code for Android, Van Nest said.
"Fifteen million lines of Android source code were original," Van Nest said.
The trial in San Francisco attracted widespread attention, as Oracle CEO Larry Ellison and Google CEO Larry Page both testified. Alsup deferred his legal ruling about the copyrightability of Java APIs until after a jury had heard evidence on other issues in dispute.
The jury deadlocked on whether Google had fairly used the Java APIs, which Alsup then decided weren't subject to copyright anyway.
At the appeals court argument on Wednesday, O'Malley and Judge Richard Taranto said two of the main legal precedents cited by Google were not relevant to the issue of whether Java APIs could be copyrighted.
Oracle attorney Joshua Rosenkranz asked the appeals court to rule that Java APIs were subject to copyright, and that Google was not entitled to a fair use defense.
However, Van Nest said if the Federal Circuit decides that copyright applies to the APIs, a second jury should consider fair use.
The three judge Federal Circuit panel did not say when it would issue a ruling.
The case in the U.S. Court of Appeals for the Federal Circuit is Oracle America Inc vs. Google Inc, 13-1021.