Sendo sues Microsoft over 'stolen' secrets

Britain's Sendo files suit in a U.S. federal court against the software giant--its former partner--in a dispute over intellectual property.

Mobile phone maker Sendo has filed a lawsuit against Microsoft, alleging the attempted theft of technical expertise and proprietary technology, adding to the intrigue surrounding its recently terminated relationship with the software giant.

A Sendo spokeswoman said that the company believes "the allegations are serious and substantial," but declined to give further details.

The lawsuit was filed in U.S. federal court in Texarkana, Texas, on Friday. Sendo is based in the United Kingdom, but its North American headquarters are in Dallas, and its as-yet-unreleased z100 "smart phone" is powered by OMAP technology from Texas Instruments, also based in Texas.

In early November, Sendo canceled the launch of the z100 shortly before it was to make its debut as one of the first smart phones powered by Microsoft software. At the time, Sendo declined to give a reason for the decision, but quickly allied itself with Symbian, one of Microsoft's principal competitors in the nascent market for smart-phone operating systems.

Microsoft declined to comment on the lawsuit, but previously, when there were rumors of a legal conflict, it has said that any charges were without merit.

The relationship between privately held Sendo and its minority shareholder Microsoft was always rocky, with both companies complaining about each other's attitude, sources close to the companies said.

Over the past year Microsoft executives told several people in the telecoms industry how they had to endure Sendo's skeptical take on Microsoft's mobile software, designed to repeat Microsoft's success in desktop computer software.

These Microsoft executives said they preferred to work with two other hardware partners in Asia, which were much more appreciative of its product.

The Microsoft-Sendo dispute came to a head when the first Microsoft-based products were introduced.

Several sources told Reuters last month that Sendo management believed certain special features it had put in its phone over and above Microsoft's usual standard operating system had emerged in other "smart phones" Microsoft was involved in.

One rival phone, called the Orange SPV, was produced by Taiwan's High Tech Computer (HTC) for French-owned mobile telecoms operator Orange.

That phone, the world's first smart phone using a slimmed-down version of Microsoft Windows desktop PC software, was launched two weeks before Sendo decided to stop working with Microsoft.

The breakup came just days before Sendo would have started shipping its own z100 smart phone, whose launch was canceled as a result of the split. It had deals with several large mobile operators in Europe, Asia and the United States, and had said it would sign more than a dozen contracts soon.

Although small, Sendo was Microsoft's most ambitious partner for its new smart-phone software. It had orders and plans to sell over one million of its z100s in the first year.

At around 350 euros (US$360) per phone, the Sendo z100 would have been some 15 percent to 20 percent more expensive than HTC's SPV phone, with few unique features to justify the difference.

Under the new deal with Symbian and Nokia, Sendo has been allowed to access Nokia's source code and tailor the software, but it could take another 12 months before it can launch a smart new phone.

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