The root of the complaint stems back to the fact that Google wanted to make it easy for Java developers to create software for Android, but didn't actually want to pay Oracle to license the programming language. It used Java APIs (application programming interfaces), which Oracle took issue with. The question is, does Oracle's copyright cover the way its code is arranged? Google claimed it didn't, but apparently the US Court of Appeals disagrees.
Google has already removed Java APIs from Android, but that isn't enough. This case is huge in terms of precedents when it comes to technology and what copyright actually covers. If Google loses once and for all, it could mean a fine in the billions, depending on whether Oracle demands royalties for every Android device, as has been rumored.