In the past few years, more than 50 companies have sued Google for patent infringement
. But the lawsuit filed by Skyhook Wireless Inc. earlier this week is a different breed of legal complaint: it comes from a real company that actually competes with Google, in an increasingly important space—the location-positioning technology that is a popular feature of many smartphones.
Nearly all of the dozens of lawsuits Google has previously faced have come from “patent trolls,” patent holding companies set up quickly—often in East Texas—to pursue a patent infringement lawsuit. Even the few small operating companies like Netlist
that have wielded their patents against Google don’t really compete with the company. Skyhook’s patent complaint is a different matter altogether. Not only is the company an actual rival to Google, its infringement suit is part of a two-pronged attack on the search giant that plays into broader criticism that the company is too dominant in certain fields, and deserves antitrust scrutiny. Skyhook, which employs 32 people in its Boston office, is an innovator in the “location services” industry. Various smartphone models—including all but the most recent version of Apple’s iPhone—use the company’s mapping technology to help users pinpoint their location. When a user sees a blue dot representing his or her location on a map on a phone’s screen, Skyhook CEO Ted Morgan explained in an interview, “We’re the ones who generate that blue dot.” Skyhook became a leader in mapping technology, which has historically relied on cell tower and GPS data, by building a map of public Wi-Fi zones across the U.S. and, later, the world. The company created that map from the ground up, deploying drivers to plot Wi-Fi locations in tens of thousands of cities. “We drove 10 million miles around the world to build up this data,” said Morgan. The company’s database today includes 250 million Wi-Fi access points, according to its complaint against Google. From 2005 to 2007, Google licensed Skyhook’s location technology, called XPS. But now that it is breaking into the smartphone market with its Android operating system, Google has developed its own database of public Wi-Fi points. Originally, Google did this by collecting Wi-Fi data with the same cars that drove around the world taking photos for its Street View program. That changed earlier this year when Google got into trouble when its was revealed that it had collected not just locational data, but personal Internet data transmitted via public Wi-Fi spots. When Google co-founder Sergey Brin addressed the issue at a May conference he was frank
: “Let me just say it, we screwed up,” said Brin. “I’m not going to make any excuses about it.” Now, regulators in France, Germany, Italy, and Spain are investigating Google Street View
over concerns that the program may violate European privacy laws, which tend to be more strict that their U.S. counterparts. According to Morgan, those privacy gaffes have made Google more reliant on collecting data via users of cell phones with the Android operating system. Such phones use a program called the Google Location Service, which is bundled with Android. Unlike Skyhook, “Google tracks phones when the user is unaware and in a way and to an extent that is never clearly disclosed to the end customer,” according to one of Skyhook’s two lawsuits against Google. (One of the suits, filed in Massachusetts state court [ PDF
], accuses Google of interference with business relations and unfair trade practices; the other is the patent infringement complaint, filed [ PDF
] in Massachusetts federal court.) Now, Google is telling cell phone manufacturers who want to utilize its Android operating system that they must use Google Location Service, Skyhook lawyers state in the complaint. Though Google calls Android an “open source” system, Skyhook argues, it “is effectively creating a closed system with respect to location positioning” by pushing out Skyhook’s XPS, its only worldwide competitor in the location services market. In the state suit, Skyhook describes how it negotiated extensively with Motorola, and ultimately entered into an agreement to put XPS technology on Motorola’s wireless devices, which use Android. Skyhook lawyers also describe how Google vice president Andy Rubin called Motorola co-CEO Sanjay Jha in late April and imposed a “stop ship” order on Motorola in connection with any XPS-equipped phones. Rubin, the complaint claims, told Jha that Motorola’s XPS technology wasn’t compatible with Android, despite earlier testing that showed XPS was indeed Android compliant, according to the complaint. Skyhook’s complaint says Google did the same thing with a second phone maker, named in the lawsuit only as “Company X.” In the patent suit, meanwhile, Skyhook claims Google infringes four of the 15 patents Skyhook has earned in its short lifespan, U.S. Patents No. 7,414,988
; and 7,305,245
. Patent complaints are sometimes used to add extra pressure and supercharge ordinary business disputes, and that could be Skyhook’s strategy in this instance. In its state court suit, Skyhook says it has suffered damages “that exceed tens of millions of dollars.” Add in the patent claims, and Skyhook’s damages demands could easily soar into the hundreds of millions of dollars. (Skyhook’s patent suit also seeks an injunction.) While Google has amassed a record that is nothing short of stellar when it comes to beating down lawsuits brought by patent trolls, fighting off a lawsuit brought by a small competitor with a proven record of innovation could prove much more difficult. Skyhook has hired big names as well: a legal team led by Morgan Chu and John Hueston of Irell & Manella.
Google did not respond to press inquiries about the lawsuit this week, saying that it had not been formally served with the two suits.
The implication by Skyhook that Google is behaving like a heavy-handed monopolist comes at a sensitive time for the company. Many see it as dominating the market for online search and advertising. And Last year, the company’s proposed settlement of a class action over digitizing millions of books was criticized
by government antitrust regulators; the deal is currently undergoing further revisions in hopes of winning court approval. The company’s chief antitrust lawyer has kept busy
dealing with the high level of public scrutiny. Skyhook, though, has a narrower focus. “We firmly believe we invented this space and this use of the technology,” said Morgan. “This is the idea behind patents. They get beat up a lot because of patent trolls, but the whole idea was for the little guy who invented something to have some mechanism for carving out some intellectual real estate.” Documents for this story: