Sendo Sues Microsoft

Suit charges Microsoft with misappropriation of trade secrets, unfair competition, conspiracy and fraud.

Sendo Holdings PLC is suing former partner Microsoft Corp., saying the software giant so wanted to rule the emerging market for Web-enabled phones that it conspired to steal Sendos trade secrets and tried to drive the British firm out of business.

The suit, filed this week in federal district court in Texarkana, Texas, details what Sendo officials call Microsofts "Secret Plan" designed to "plunder the small company of its proprietary information, technical expertise, market knowledge, [and] customers," according to court documents.

According to the suit, Microsoft promised to help Sendo develop, finance and ultimately market Sendos 2.5G smartphone, the Z100. But repeated delays of both Microsofts software and funding left Sendo financially strapped and the partnership frayed. The deal fell apart in October when Microsoft joined with another manufacturer, High Tech Computer of Taiwan, to unveil the Orange SPV, a next-generation phone that the suit claims was built with stolen Sendo technology.

"Microsoft used Sendos knowledge and expertise to its benefit to gain direct entry into the burgeoning next-generation mobile phone market and then, after driving Sendo to the brink of bankruptcy, cut it out of the picture," the complaint reads.

The timing of the suit and the events described in the complaint sheds some light on the rift between Micosoft and Sendo that was apparently developing when Sendo announced last month it was dropping the Microsoft-based Z100in favor of a new deal with Nokia Corp.

Microsoft officials did not respond to requests for comment. A Sendo spokeswoman in the United States referred calls to officials in the Netherlands, where comment was not immediately available.

Sendos suit seeks unspecified damages on 13 counts including misappropriation of trade secrets, unfair competition, conspiracy and fraud.