Skyhook Motion For Preliminary Injunction Shot Down in Lawsuit Against Google; CEO Still Hopeful in Case

Boston-based mobile software maker Skyhook Wireless hasn’t been able to prevent Google from setting rules that Skyhook says shut its location-finding technology out of phones running the Android platform—not yet, anyway.

Last September, the startup filed a lawsuit in Massachusetts’ Suffolk County Superior Court against Mountain View, CA-based Google, claiming that the company had interfered with contracts Skyhook had nabbed to get its XPS software into Motorola and Samsung mobile phones, so that Google’s location-finding software would be employed instead.

Skyhook sought to prevent Google’s interference in the contracts even as the lawsuit proceeded, by filing a motion for a preliminary injunction against Google that in effect would have forced the firm to loosen its compatibility standards so that mobile phone makers would have the freedom to choose the technology that worked best for them. A judge has denied Skyhook’s request, which was presented at a hearing in November, Skyhook CEO Ted Morgan confirmed in an e-mail today.

“The judge denied the preliminary injunction based on the materials discovered to date so the case will proceed normally as any case from here on out,” Morgan said.

Skyhook has claimed that shortly after it landed contracts with Motorola and Samsung to put its XPS location-finding technology in their Android mobile phones, Google (NASDAQ: GOOG) redefined its requirements for what makes a device compatible with its Android platform in a way that made the XPS software non-compliant. (The Skyhook lawsuit doesn’t directly name Samsung, but refers to a second company as “Company X” due to contract restrictions. The identity can be surmised from the case details, though, as my colleague Wade has written previously.)

In opposing the injunction from Skyhook at the hearing in November, Google lawyers claimed that the terminated contracts between the phone makers and Skyhook were not linked to Google’s compatibility standards. They also said that Google had its own agreements with the phone makers, before Skyhook came along, surrounding the collection of consumer data that its standard Android phone apps performed. Google lawyers could not be reached this week for comment on the new developments in the case.

A hearing for a motion to dismiss the case had been originally scheduled for today, but the judge canceled the hearing, according to Morgan. Skyhook, which makes money on licensing contracts, has also sought monetary damages from Google and has filed a lawsuit in the U.S. District Court for the District of Massachusetts, claiming that Google’s location-finding technology infringes on four patents that Skyhook owns surrounding technology that enables mobile devices to determine their locations based on their proximity to mapped Wi-Fi networks.

The implications are big for the winner in both these cases, as the company that gets its location-finding technology into phones also stands to benefit from the loads of consumer data the technology generates. Other companies focused on targeted mobile ads are willing to pay for the data, which provides information on where mobile phone users are and what they are doing.

“It is the first inning of a long game unfortunately,” Morgan says of the case. “I just hope this situation doesn’t scare off new entrepreneurs from starting companies because they fear how big platform players will react to their success.” Skyhook has previously stated that Google’s action to make its own Location Services the dominant location-finding technology in Android phones contrasts with the open-source ethos it has touted for its Android project.

Morgan is still hopeful at this point, despite the web of legal proceedings that remains. “As far as I am told, it is extremely rare for a judge to approve an injunction this early and the fact that she even considered it shows how seriously she is taking the case,” he says. “In the end a jury decides, and we are pretty confident that the truth will come out.”

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