IANAL, but wouldn't that be a problem of trademark infringement, and not copyright claim as Oracle is suing them for?

If they did call it Java, it would be. That's why they didn't. So Oracle can't monetize Java from Google by claiming a trademark infringement.

That's why they are claiming copyright on APIs and such. Whether or not this has any merit - is what the court case is all about.

Even with the TCK license, I think the major problem was licensing of the JVM.

Google wanted to make Android open source, but the JVM license requires the GPL, which Google and a lot of companies using it now won’t touch with a pole.

So they had to use more liberal license, like the one they use in most of their other projects and the only way to do that was to write their own new VM (this probably also allowed them to more easily tailor it for mobile use).

I don't think a GPL'd JVM would be a deal-breaker. It's at about the same level as Linux, probably less likely to be tweaked by device builders. Not having the classpath exception on the libraries would be a no go though.

the main point of a gpl version, copyrights held by google, is to let people hack away, and if they wantdifferentlicense terms go to google.

Then why did they build their own C standard library instead of using libc?

Sun probably wouldn't have objected to Google writing a non-GPL JVM as long as it was fully compatible with the crap Java ME or SE APIs.