Details Emerge in Sendo/Microsoft Dispute

As I previously reported in WinInfo Daily UPDATE, British cell phone maker Sendo has launched a lawsuit against Microsoft, accusing the software giant of stealing its intellectual property. Now that Sendo has filed the lawsuit, details of the company's complaint are available, and they don't paint a pretty picture of the supposedly reformed software monopolist.

According to the lawsuit, in 1999, the two companies formed a partnership to develop smart cell phones that accessed users' email accounts and offered other Internet-related services. The system, code-named Stinger, eventually developed into what Microsoft now calls Smartphone 2002, which is based on Pocket PC technologies. Sendo and Microsoft dissolved their relationship in October 2002 when another Microsoft partner, High Tech Computers, released a Stinger-based Smartphone device in the United Kingdom.

Sendo's suit alleges that Microsoft "plundered" Sendo's intellectual property, proprietary hardware expertise, and trade secrets by providing this information to High Tech Computers and other companies that were working on Stinger phones. Sendo also accuses Microsoft of using Sendo's relationships with Orange and other mobile phone carriers to gain access to these carriers, then bypassing Sendo. The company says it's looking into the "legal implications" of Microsoft's relationships with former Sendo partners. Sendo has since made repeated requests to Microsoft to return its intellectual property and says that Microsoft has "failed and refused" to do so. According to the lawsuit, Microsoft has used "its secret plan to pillage Sendo of its technology, convert that technology to its own use, steal Sendo's customers, and leave Sendo cash-starved and on the brink of receivership."

Sendo claims it's at "the brink of bankruptcy" because of Microsoft's actions, which also included continually late software-update deliveries and cash payments. Microsoft also refused to provide the $14 million in financing it promised Sendo, the suit says. Even more damning, Microsoft and Sendo had agreed that if Sendo declared bankruptcy, the company would grant Microsoft a royalty-free license to use its intellectual property. In October, Marc Brown, director of Microsoft's corporate development and strategy group and a Sendo board member, suggested to Sendo that the company file for bankruptcy. Later that month, Brown resigned from Sendo's board of directors, and the next day Sendo terminated its relationship with Microsoft.

Sendo filed the suit in the Federal Court for the Eastern District of Texas because its US division is based in Irving, Texas. The company is seeking unspecified damages. Microsoft, characteristically, declined to comment about the Sendo lawsuit.