Yes. I can't help thinking that if I was Google, I would be working on an alternative language that compiles directly to Dalvik bytecode as fast as I could. Heck, I'd probably just be grabbing something like Go and throwing 10 pHDs at it.

This would help them in many many ways. Firstly it would demonstrate to the courts that Dalvik is not specifically a Java VM. This clears them of several legal challenges (still leaving some).

Secondly and more importantly, it would up the stakes with Oracle tremendously. Having Google actually abandon Java on Android due to legal concerns would be a huge blow to Java. Especially if Google did so in a way that enabled existing Java applications to be ported easily (by adopting the Apache Harmony libraries, utilizing their existing dexer to enable people to run their existing Java code while picking up Google's replacement language for new code). They'd have to work around any patent violations in the VM which might have some performance impact but I'd still assume it is possible.

It would basically change the game to a lose-lose proposition for Oracle - win the court case, get some money, but lose Java. Lose the court case, effectively still lose control of Java.