Skyhook Lawsuit Lives On To Fight Another Day Against Google

Skyhook’s lawsuit against Google, for unfair competition, interference with contract and patent infringement, has survived a substantive and procedural challenge to end the case. Google had sought to terminate the litigation  before all the factual discovery was completed.

Skyhook Gets to Dig More

One of the byproducts of earlier discovery in this case was the disclosure of a memo between Larry Page and Steve Lee of Google that identified location data as critical to Google’s mobile strategy: “I cannot stress enough how important Google’s Wi-Fi location database is to our Android and mobile-product strategy.”

This memo was generated after Motorola’s decision in April 2010 to use Skyhook for location on Android phones rather than Google’s own system. Motorola’s subsequent decision to use Google (rather than Skyhook) and Google’s role in impacting that decision is one of the core issues in the litigation.

Google is often successful ending lawsuits with an instrument called “motion for summary judgment.” This basically argues “even if everything the plaintiff says is true factually the case should be dismissed because there’s no valid legal claim.” Google filed such a motion in this case and Skyhook has overcome it. However Google is permitted to file another such motion later after all the facts come out.

Google’s Victory: Total Discretion Over Android

Google does appear to have won a victory in the ruling. The court found that Google has a contractual right to prevent manufacturers from distributing devices “under the Android trademark with any software installed that, in Google’s determination, would interfere with full functioning of Google’s applications, including retrieval of location data.”

The presence of Bing as default search provider on some Verizon Android handsets would seem to contradict this total authority. But perhaps Google is allowing carriers flexibility it doesn’t allow others.

Skyhook now must prove that Google’s interference with its relationship with Motorola and another major OEM was intended to injure Skyhook and “thereby avoid competition.” This is harder to prove and will require some sort of “smoking gun” evidence or a collection of evidence that creates a strong “inference” that Google was motivated by a specific desire to harm Skyhook rather than simply assert its own interests.

Need to Find an Evil Intent

There’s a lot of gray there. If Google legitimately asserts its own interests with handset OEMs, and compels them to use its location positioning, that necessarily means that Skyhook’s system and tools won’t be used. Skyhook must show an evil intent here.

It’s a little like proving race discrimination in an employment case. You can’t simply show that the impact was harmful you have to show that there was a specific intention to harm.

The court also discusses that both hardware OEMs provided reasons to Skyhook for their reversals that were unrelated to Google. Skyhook now must prove that those stated reasons were false or pretenses.

There are other issues (e.g., venue) discussed in the court’s order as well. The patent issues were apparently not part of the Google motion. Regardless, the bottom line is that Skyhook is now free to get at all the facts that may support its claims in the case. That doesn’t mean it can or they will.

Google the Final Arbiter

What has been revealed so far in the litigation is that Google believes location and related data from Android handsets is strategic. Another revelation is that Google has total veto power over third party software on Android if that software, in Google’s sole discretion, would interfere with Google applications.

The latter finding is certainly contrary to the early rhetoric of Android and the “open handset alliance.” Google thus appears to not just be a “first among equals” but the alpha and omega of Android.

In the long run, as Android becomes the dominant smartphone OS in the world, that controlling position may come back to haunt Google.