The database maker contends that Google copied Java API designs into Android APIs; based Android class libraries on Java API designs; and copied from Java code into Android code.
Schmidt said Sun wanted $US30 million to US50 million in 2006 to jointly develop a mobile operating system with Google.
The deal did not eventuate because, according to later testimony from Android chief Andy Rubin, Google wanted to open source the code and Sun was not agreeable to this.
Schmidt also said that after Google announced the Android system at the end of 2007, he had met Sun's new chief Jonathan Schwartz on a number of occasions and never heard a negative word about Android.
Rubin also gave testimony on Monday. He was asked about emails which Oracle claims are proof enough that Google knew it needed a licence to use Java but went ahead to develop Android without one because it had not succeeded in negotiating a licence with Sun.
Oracle became the owner of Java after it completed the acquisition of Sun in January 2010.
One of Rubin's emails, sent on March 24 2006, reads: "Ha, wish them luck. Java.lang api's are copyrighted. And Sun gets to say who they license the tck to, and forces you to take the 'shared part' which taints any clean room implementation."
Another, sent on August 6, 2010, reads: "What we've actually been asked to do (by Larry and
Sergei) is to investigate what technical alternatives exist to Java for Android and Chrome. We've been over a bunch of these, and think they all suck. We conclude that we need to negotiate a license for Java under the terms we need."
Oracle lawyer David Boies got Rubin to admit that this meant the APIs were copyrighted by Sun. Bur Rubin said it was going too far to take his statement about a clean room implementation as indicating that Google was not capable of developing its own version of the language without violating copyright.
Also taking the stand on Monday were Bob Lee, an ex-Google engineer who is now the chief technology officer for a company called Square that handles mobile payments, and John Mitchell, a Stanford University computer science professor who has been hired as an expert witness by Oracle.
There are three phases to the trial. The first, which could end this week, will decide copyright accusations. The second phase will decide accusations over patents. And the third will decide the damages, if any, that is entitled to if either of the first two phases go in its favour.
The case is being tried in the San Francisco district court.