Google has offered to pay Oracle $3m plus a portion of its Android platform revenue if Oracle can prove the operating system has infringed Java patents at an upcoming trial in April, according to reports.
The web giant had offered Oracle less than one per cent of Android revenue, but Oracle has already rejected the offer for being too low, reports said, citing a court document filed on Tuesday.
Google's offers have been seen as an attempt to reach a settlement with Oracle without the need for a jury verdict.
"Oracle cannot agree to Google's proposal that Oracle waive its constitutional right to a jury trial," said Oracle lawyers in the filing to US District Court Judge William Alsup, seen by the Associated Press.
"Although there are issues for the Court to decide, there are substantial questions for the jury as well."
Oracle and Google declined to comment further.
Oracle filed the original suit against Google for patent infringement in August 2010 claiming that Google "knowingly, directly and repeatedly infringed Oracle's Java-related intellectual property" and sought "appropriate remedies".
The key technology in question is the Dalvik virtual machine used in Android.
Google has denied patent infringement, and argued that Android was allowed to use the Java technology when it was owned and developed by Sun Microsystems because the technology was then intended to be open source.
Oracle acquired Sun Microsystems in April 2009.
In February Google had a major setback in its dispute with Oracle, after the US Court of Appeal in Washington ruled that one of Google's internal emails could be used as evidence against the firm.
The email was written in August 2010 by Tim Lindholm, a software engineer at Google, to his superiors. He suggested that Google would have no choice but to start licensing Java as no other technologies would be suitable for use within Android and Chrome.
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