Former Smartphone Maker Sues Microsoft

British mobile phone maker Sendo, which Microsoft once touted as the premier maker of Pocket PC-based Windows Powered Smartphones, is suing the software giant for stealing its trade secrets and proprietary technology. Because Sendo filed the case in a US District Court in Texas, Microsoft has 20 days to respond to the complaint. A trial could begin within a year.

Just weeks ago, Sendo announced that it was dropping the Smartphone and moving to rival technology from Nokia and Symbian. The decision was a complete surprise to Microsoft, which had been using Sendo's Z100 Stinger phone as a reference design of sorts. Now the rift between the companies appears to be greater than previously imagined.

Sendo is seeking "hundreds of millions of dollars" in damages from Microsoft, which it has charged with 13 violations, including breach of contract, civil conspiracy, fraud, and negligent misrepresentation. "We believe the allegations are serious and substantial," said Sendo spokesperson Marijke van Hooren, who noted that Sendo believes Microsoft offered them false promises of industry partnerships in return for access to Sendo's mobile phone experts. Microsoft has been trying to move into the mobile phone market for more than 2 years but has faced product delays and resistance from the cell phone industry.

Sendo's complaint mentions Microsoft's "secret plan" to steal Sendo's technologies and business partners. Specifically, Sendo says Microsoft overstated the readiness of its Smartphone software when the two companies formed their partnership almost 3 years ago and downplayed incompatibility with Sendo's hardware. Microsoft then repeatedly withheld cash payments, which hurt Sendo's cash flow. All the while, Microsoft had access to Sendo's sensitive technologies and key employees, and the company accompanied Sendo on meetings with its partners. Sendo says that Microsoft then decided to forgo Sendo's hardware and struck its own relationships with Sendo's partners, effectively cutting Sendo out of the picture. Microsoft also shared Sendo's proprietary technology with those partners, Sendo says.

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