16
Sep
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That's A Really Nice Suit

A nice little piece of litigation cropped up on the mobile news radar today - Skyhook, a WiFi/GPS location services provider, is suing Google for "forcing" certain Android device manufacturers (specifically Motorola and Samsung) to utilize Google Location Services instead of Skyhook on the DROID X and Galaxy S devices as their primary location services provider, respectively. If you're thinking "but Android is open source," stay tuned kids, I'll be explaining why that doesn't matter so much in this case.

Skyhook's complaint, filed in Massachusetts, makes 3 basic allegations:

  1. Google knowingly induced Motorola to breach its contract with Skyhook;
  2. Google intentionally interfered with Skyhook's "advantageous business relations";
  3. Google engaged in unfair and deceptive trade practices in the above and other actions which injured Skyhook.

And what is it Skyhook wants? Well, money. That and a permanent injunction against Google making it the device manufacturers' choice to use Skyhook instead of Google Location Services, should they be so inclined.

The latter, I can tell you right now, is simply not going to happen - and Skyhook (and their lawyers) are probably well-aware of this. But Skyhook would be wise to invest in some wheelbarrows if its assertion that there was a breach of contract with Motorola is true, as its allegations regarding Google's behavior don't sound all that farfetched. What exactly happened?

The Story

In a nutshell (and I am paraphrasing), Skyhook after "years" of negotiation, entered into a contract with Motorola to ship an Android phone (the DROID X) with Skyhook as its primary location services provider. As we all know, Android phones also come with Google Location Services (GLS) - which is used to integrate your location with Google Search, Buzz, Twitter, the Camera app, Navigation, etc. The GLS framework is inextricably part of the Android OS, but an alternative location service software can be used in its place if a device manufacturer chooses.

Google's Andy Rubin, upon finding this out, apparently called up Motorola's Sanjay Jha personally to request that the mobile phone producer reconsider its choice of Skyhook. Specifically, Google threatened to revoke the DROID X's Android compliance certification - removing its access to the Market and, potentially, other proprietary Google software and services.

Google gave Motorola two choices (really, three): put a startup disclaimer on the DROID X that made Skyhook look like a big-brother information gatherer and allow users to use GLS instead, or force Skyhook and GLS to run simultaneously (that is, side-by-side). Neither option appealed to Skyhook, to whom Motorola went to with these options. Skyhook refused to bargain and, in the end, the DROID X shipped with GLS as its primary location service provider.

A similar situation unfurled with the US-bound versions of the Samsung Galaxy S (which are Skyhook-enabled in Europe), though Skyhook does not allege a breach of contract with Samsung, merely the loss of expected royalties. So, back to the open source issue: how can Google remove a phone's access to the Market if Android is open source?

Sort Of Open Source

This is where things get a little shady. The Android operating system really is open source - you can remove, add, modify, turn off or on any feature or piece of the operating system at will as a developer, manufacturer, or person. But some of Google's Android applications and services are not part of the Android OS, and very much closed source. This includes the gateway to most Android apps: the Android Market. Why don't all those nice-looking Chinese Android phones have access to the Marketplace? Google won't license them.

In order for an Android device to receive access to the Market (and thus be a part of what Google calls "the Android ecosystem"), devices must pass a two-part compliance test conducted by Google. The first half is an objective software Compliance Test Suite (the "CTS"), which determines a device's general compatibility with Android. The latter portion of the test is an individual, human evaluation of the device in question - in which Google determines if a device meets the requirements of the Compliance Definition Document (the "CDD").

The DROID X received certification on both tests prior to Google's realization that Skyhook was going to ship as its primary location service. Google then alleged that Motorola was in violation of the CDD by using Skyhook, and later did the same to Samsung. Both manufacturers quickly caved to Google's demands.

Show Me The Money

While Google will respond with its own version of events, it seems pretty clear that the "don't be evil" mantra was violated in this case. Google needs the data generated from its GLS for advertisement targeting and search enhancements - if Skyhook took over, Google would have to be paying for (or simply not receiving) Android user location data. Such a consequence would be pretty undesirable for Google. But, that does not excuse Google from liability in what seems like a pretty clear-cut case of inducement to breach a contract.

Intentional inducement to breach a contract is unlawful, and while Skyhook would have to fight hard in court (they are a company of 32 employees with limited resources) to win at trial, a settlement is extremely likely to emerge before things reach that stage. Skyhook's demand for additional damages in expectations of royalties would be harder to prove, unless Skyhook could show they tangibly relied upon those royalties. Even without the royalties, Skyhook will likely be receiving a hefty sum from Google to keep quiet.

A deal may eventually emerge between the two (though this is sheer speculation) that gives Google equal possession of user data generated by Skyhook's services, if only for the sake of preventing additional litigation. Time will tell, and we'll be awaiting Google's response to Skyhook's complaint.

Source: BusinessInsider

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • Chris

    How is Google wanting its users to at least have a choice evil or unreasonable? Skyhook was the one demanding that they be the *only* location service on the phone.

    Device manufacturers can do whatever they want with Android. But if they want to access Google's services and applications, they have to meet a series of tests. This is nothing new and there is no major brand on the planet that doesn't do it. If people are going to use your stuff, you want to make sure that they use it in a way that meets your criteria. Google is far more forgiving than most are. Imagine for example what hoops Verizon is currently jumping through to try and get the iPhone on its network.

    Open means open source. Android is open, there is no denying this. Open doesn't mean that Google becomes a not for profit, no longer protects its IP, allows anyone unrestricted access to any of its applications and all of its employees become volunteers.

    As for inducement to breach contract, it sounds like Motorola didn't do their homework to me. They probably didn't realize that providing the option to use Google's location service was necessary to acquire approval and that they would lose all of Google's services if they didn't meet approval. They probably then went to Skyhook and said "Gee, we can't sell this phone without all the cool free stuff (other than the market) that Google gives us, any way you guys can give us some leeway here?" Competition with Google seemed like a deal breaker for Skyhook and Motorola made the obvious choice.

    Google only has leverage over the carriers/manufacturers in that its offerings are compelling. But Motorola had and continues to have the choice to put out an Android phone without using Google's services and thats what will make all the difference in this case.

    • David Ruddock

      While I agree it's still a matter of choice for the carriers/handset manufacturers, I omitted a lot of factual information from the complaint which addresses these concerns in a convincing manner.

      Skyhook and Google had a "trial license" relationship from 2005-2007. Google came to the conclusion that they did not want to license Skyhook's services (more likely, they wanted to buy the company).

      When the relationship fell through, Google attempted to persuade Skyhook into providing their "XPS" WiFi location data (which Google possessed though could not legally use, having been a trial licensee) for free. Skyhook refused. The companies have been on terse terms since.

      Google then proceeded to develop Google Location Services as their own, home-grown location service. Skyhook was upset - as although no patents were violated, Google had clearly taken much conceptually from Skyhook's WiFi / rapid location model and incorporated it into their own system.

      After Motorola agreed to use Skyhook on the DROID X, the DROID X passed the CTS portion of Google's certification - and Motorola themselves attested to Skyhook that they possessed "no reason" to believe Skyhook would fall outside CDD requirements.

      "Among other things, Skyhook’s XPS software was tested for Android compliance using Google’s own CTS. Motorola confirmed that XPS met the requirements for Android compliance, and the parties worked to roll out XPS on Motorola’s next Android device, slated for release mid-July 2010."

      Not until Skyhook made a press release on their Motorola partnership did Google tell Motorola to "stop ship" on the DROID X and make their ultimatum for licensing.

      Additionally, "Skyhook is informed and believes that at least one other company, a location technology hardware and software provider which also uses a hybrid/terrestrial based approach to determine location, has been allowed by Google to continue to run on Android despite also failing to meet Google’s own interpretation of the CDD."

      Also, Google's proposed "solutions" (disclaimer + choice or side-by-side GLS and Skyhook) were still in direct violation of Google's own interpretation of the CDD (breaking their own rules, as it were).

      Samsung indicated to Skyhook that Google's actions were wholly unexpected, as Samsung shipped tens of thousands of Galaxy S devices across the world with Skyhook, and Google did not raise an issue until the Motorola conflict: "Company X [Samsung] was surprised by Google's declaration given that Google had raised no compliance issues prior to and through the product's initial launch. Google further demanded that Company X use Google Location Service instead of XPS."

      I hope this clarifies Skyhook's position, which I find to be rather compelling. And, as a matter of public policy, I believe a court would probably find that even though Google has the right to exclude Skyhook from this point forward, Google acted in such a way as to cause financial injury to Skyhook - and clearly induced the breach of the contract with Motorola (IF it is found Motorola in fact breached the contract).

      Google has a massive bargaining power advantage, and this isn't something the courts would overlook in ruling.

      Anyway, like I said, we'll see Google's side of the story soon, I'm sure.

  • Gabriella

    "How is Google wanting its users to at least have a choice evil or unreasonable?"

    Still clinging to the whole "choice" charade, eh? Sounds to me like Motorola's "choice" was made for them. So far as users are concerned, Adware platforms only offer one "choice," which is to be a target. Android's customers are the merchants that bid on your behavior.

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