Skyhook Wireless Sues Google: You Lie About Android “Openness”

In a lawsuit that will be closely watched Boston’s Skyhook Wireless has sued Google for patent infringement and interfering in its business relationship with Motorola. Skyhook’s principal business is providing location to third parties through the use of cell tower and WiFi location databases often referred to as “triangulation.”

Skyhook’s system and technology is widely used by handset manufacturers, mobile application developers and others. Skyhook owns quite a few patents surrounding location determination and its infringement claims assert that Google has violated three of Skyhook’s patents. Here’s representative language from the patent complaint:

Skyhook is informed and believes, and thereon alleges, that Google has actively induced and is currently inducing the infringement of the ‘694 patent in violation of 35 U.S.C. § 271(b), by knowingly and intentionally encouraging or aiding third parties to use infringing products that embody one or more claims of the ‘694 patent in this judicial district and elsewhere throughout the United States, without license or authority from Skyhook, including at least what Google describes as its “WiFi location database.” Skyhook is informed and believes, and thereon alleges, that these third parties have infringed and will infringe the ‘694 patent in violation of 35 U.S.C. § 271(a) by using infringing products that embody one or more claims of the ‘694 patent, including at least what Google describes as its “WiFi location database.”

Google uses a methodology similar to Skyhook’s to provide location for Android devices. Skyhook asserts that Google basically copied what it was doing after a brief licensing relationship and is now trying to prevent third parties from using Skyhook’s technology. Accordingly, the second and more factually interesting suit argues that Google forced (essentially blackmailed) Motorola to end a contractual commitment to use Skyhook’s technology in its Android handsets. Here’s the critical “factual” information:

Skyhook and Google are competitors in the location positioning space. There was a time when Google tried to compete fairly with Skyhook. But once Google realized its positioning technology was not competitive, it chose other means to undermine Skyhook and damage and attempt to destroy its position in the marketplace for location positioning technology. In complete disregard of its common-law and statutory obligations, and in direct opposition to its public messaging encouraging open innovation, Google wielded its control over the Android operating system, as well as other Google mobile applications such as Google Maps, to force device manufacturers to use its technology rather than that of Skyhook, to terminate contractual obligations with Skyhook, and to otherwise force device manufacturers to sacrifice superior end user experience with Skyhook by threatening directly or indirectly to deny timely and equal access to evolving versions of the Android operating system and other Google mobile applications.

Emphasis added.

This all stems from an incident in April when Motorola essentially swapped out Google’s location positioning for Skyhook’s. The reasons were that Skyhook offered more accurate location than Google, according to Skyhook CEO Ted Morgan. According to Skyhook’s complaint Motorola was trying to offer “differentiated” Android handsets vs its competitors and Skyhook was part of that. My speculation at the time was that Motorola was also partly trying to declare independence from Google because of dismay or frustration over Google’s direct sales of the Nexus One and going into direct competition with its handset partners. (The Nexus One has since been repositioned in the market.)

When I spoke to Skyhook CEO Morgan at the time of the Skyhook-Motorola announcement he told me that people at Google were very angry at the development and its public announcement. Morgan said that Google loudly complained to Motorola.

Skyhook now argues that turned into Google strong-arming Motorola into adopting its location technology rather than Skyhook’s, using a technical-compliance argument as the justification for excluding Skyhook. Skyhook also claims that another unnamed global handset maker, identified as “Company X” in the complaint and who I’m going to guess is Samsung, was forced into a similar choice and made a similar choice.

The bottom line is that Skyhook thinks that Google is retaliating and trying to force third parties not to use its location platform. Skyhook recently lost Apple’s business on iOS 4, when Apple implemented its own proprietary location positioning system, though it remains a part of 3Gs and other iPhones. Android thus is an important platform for Skyhook and it’s essentially saying that Google is preventing major Android OEMs from using Skyhook, putting a lie to the “openness” claims that Google uses in its rhetoric against Apple.

Google of course has a very different view of all this and will likely defend against the “tort” claims (interference with contract, business relations) by asserting technical arguments. However in my reading of the complaint there’s almost no way that Google will be able to defeat the case before trial on a motion for summary judgment. If there’s no settlement and the case does go to trial (in Skyhook’s home venue Massachusetts) the story to the jury will be: Goliath unfairly tries to put David out of business.

The case with the potentially larger impact on the market and Skyhook’s future, however, is the more “boring” patent infringement case.

There are lots of location-related patents and companies that claim they own LBS or location on mobile devices. But Skyhook’s patents are stronger than others who’ve made location-related patent claims against Google.

Google will fight Skyhook’s patent suit very aggressively. If the company were to lose it would likely mean that Skyhook would be able to demand and gain licensing revenue from anyone using location (other than GPS based) on mobile devices to deliver information, content and potentially advertising.