Skyhook Wireless has accused Google of copying its location-finding technology and interfering with its business. The Boston-area start-up is seeking an injunction and "millions of dollars" in damages.
Skyhook has filed two lawsuits against the search engine giant: One in a Massachusetts state court claiming that Google caused it to lose a lucrative partnership by forcing Motorola, among other companies, to ditch Skyhook's technology in favor of Google's own. (To read the legal papers, click here.) Another complaint, filed in federal court in Boston, accuses Google of infringing on four Skyhook patents related to ways to establish the exact location of a smartphone.
Location-tracking technology is huge these days, and has massive money-making potential thanks to its ability to serve up ads relevant to wherever the customer happens to be. Skyhook -- founded in Cambridge, Massachusetts in 2003 -- is a pioneer in the field, pinpointing a smartphone's location through its database of more than 60 million Wi-Fi hotspots.
Skyhook claims Google threatened to stop phone makers from using its Android operating system on devices with Skyhook's software. (The Google stamp of approval for compliance is required on all Android phones from major manufacturers.) Skyhook poured more than $1.5 million into the Motorola partnership announced in April. But after Google objected, Skyhook claims, Motorola phones instead began shipping with Google's location-services technology.
"There was a time when Google tried to compete fairly with Skyhook," Skyhook said in its complaint. "But once Google realized its positioning technology was not competitive, it chose other means to undermine Skyhook." (Google's technology is free, but companies still choose Skyhook's fee-based service, suggesting the start-up's software is superior.)
"[Google's] behavior in this case is contradictory to their message of openness,' Skyhook chief executive Ted Morgan told Bloomberg News in an interview. "In areas that are very important to Google, the rules seem to change."
Andrew Pederson, a spokesman for Google, wrote in an e-mail to Bloomberg: "We haven't yet been served, so we can't comment on the complaint until we've had a chance to review it."
According to a report from research firm Gartner, Android-based phones outsold iPhones in North America for the first time in the first quarter of this year. Compared with the year-earlier period, Android phone sales grew an eye-popping 707 percent. Android phones could snag 30 percent of the smartphone market by the end of 2011, Gartner says.