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Skyhook-Google Litigation Playing Out In Public

There’s growing interest in and visibility for the case of Skyhook v. Google. Part of the interest is in the public record and the revelation of some of Google’s internal communications. However, so far there are no “smoking guns.”

Last week I wrote that Skyhook had survived a procedural motion to dismiss and/or for summary judgment. The company is being allowed to conduct further factual discovery to attempt to prove that Google improperly interfered with Skyhook’s relationships with Motorola and “Company X” (Samsung). The fact of the interference is undisputed, at issue are Google’s motivations.

Need to Show Specific Anti-Competitive Intent

Google had sought to end most of the claims in the case. However the court denied the motion, permitting more factual investigation to happen. By the same token it pointed out that Skyhook will have to prove that Google was intending to harm Skyhook specifically with its actions.

At issue in the procedural motion was Google’s right to block the use of Skyhook’s location positioning system on Android devices.  The court found that Google has a contractual right to prevent manufactures from distributing devices “under the Android trademark with any software installed that, in Google’s determination, would interfere with full functioning of Google’s applications, including retrieval of location data.”

As mentioned Skyhook must now factually prove that Google’s interference with its relationship with Motorola and Company X was intended to injure Skyhook and “thereby avoid competition.” This will be very challenging for Skyhook if the case makes it to trial. (Google will get another crack at summary judgment once discovery is completed.)

Were Google’s Technical Arguments a “Prextext”?

After I wrote the previous article Google pointed me to another court document issued in December, denying Skyhook a preliminary injunction and opining on the merits of Skyhook’s case. Google evidently did something similar with TechCrunch, which offers a defense of the company based in part on that same document.

At the center of the December court order is a discussion of the issue of “compatibility” between Skyhook’s technology and Android. Google argued that there were technical issues responsible for the ultimate rejection of Skyhook by Motorola and Company X. Skyhook argued that the compatibility discussion was a pretext and that Google was simply trying to prevent OEMs from working with anyone else.

This compatibility discussion is at the center of an article about the case appearing in the NY Times yesterday.

Earlier Order Skeptical re Skyhook’s Case

In the December court order the judge expresses skepticism that Skyhook will be able to prevail in the case for several reasons. In the order released last week compatibility is not part of the discussion. Instead Google’s contractual right to block third party software that might adversely impact Android and/or the operation of Google’s own software is the central issue discussed.

Accordingly the parallel arguments that Google appears to be using in the case are the following:

  • Skyhook’s location technology was technically incompatible with Android
  • Even if compatibility wasn’t a problem, Google can assert the primacy of its software under the contract with OEMs and block third party software at its discretion

As I’ve said it will be very challenging for Skyhook to overcome both of these arguments, especially the second one.

Self-Interest and “Improper Motives” Hard to Parse

Skyhook will effectively need an admission in a deposition or an email that says something like: “If we don’t do something now, Skyhook may replace us with OEMs and that will hurt us in the following ways . . .  We need to shut them out of Android completely.” Absent such a smoking gun, Skyhook will need to produce a bunch of compelling evidence that gives rise to an inference of the required “improper motive” behind Google’s actions.

Indulging the Skyhook side for a moment: if Skyhook’s location system were to replace Google’s on all Android devices my understanding is that Google would be compromised in its ability to serve location-based search results or ads. That could impact Google’s services and capacity to monetize on Android accordingly. (The counterpoint is that Apple controls location on the iPhone and Google has no location challenges there seemingly.)

Thus Google’s self-interest and blocking Skyhook from being the provider of location on Android handsets could be argued to be one and the same. But showing this, by itself, will not be enough for Skyhook to win its case.

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