Sendo sues Microsoft over 'stolen' secrets

Mobile phone maker Sendo has filed a lawsuit against Microsoft, alleging that the software giant stole technical information and prorietary technology from it - a move which adds to the intrigue surrounding its recently-terminated relationship with Bill Gates' outfit.

A Sendo spokeswoman said that the company believes "the allegations are serious and substantial", but declined to give further details.

The lawsuit was filed in a US federal court in Texarkana, Texas on Friday. Sendo is based in the UK, but its North American headquarters are in Dallas, and its as-yet-unreleased Z100 smartphone is powered by OMAP technology from Texas Instruments, also based in Texas.

In early November, Sendo cancelled the launch of the Z100 shortly before it was to make its debut as one of the first smartphones powered by Microsoft software. At the time, Sendo declined to give a reason for the decision, but quickly allied itself with Symbian, one of Microsoft's principal competitors in the nascent market for smartphone operating systems.

Microsoft declined to comment on the lawsuit.

The relationship between privately-held Sendo and its minority shareholder Microsoft was always rocky, with both firms complaining about each other's attitude, sources close to the companies have said.

Over the past year Microsoft executives told several people in the telecoms industry how they had to endure Sendo's sceptical take on Microsoft's mobile software, which was designed to repeat Microsoft's success in desktop computer software. These Microsoft executives said they preferred to work with two other hardware partners in Asia which were much more appreciative of its product.

The Microsoft-Sendo dispute came to a head when the first Microsoft-based products were introduced. Several sources said last month that Sendo management believed certain special features it had put in its phone over and above Microsoft's usual standard operating system had emerged in other smartphones Microsoft was involved in.

One rival phone, called the Orange SPV, was produced by Taiwan's High Tech Computer (HTC) for French-owned mobile telecoms operator Orange. That phone, the world's first handset using Microsoft's Windows for Smartphones 2002, was launched two weeks before Sendo decided to stop working with Microsoft.

The break-up came just days before Sendo would have started shipping the Z100, whose launch was canceled as a result of the split. It had deals with several large mobile operators in Europe, Asia and the United States, and had said it would sign over a dozen contracts soon.

Although small, Sendo was Microsoft's most ambitious partner for its new smartphone software. It had orders and plans to sell over one million of the Z100s in the first year. At around 350 euros (about £224) per phone, the Z100 would have been some 15-20 percent more expensive than HTC's SPV phone.

Under the new deal with Symbian and Nokia, Sendo has been allowed to access Nokia's source code and tailor the software, but it could take another 12 months before it can launch a smart new phone.

Matthew Broersma writes for ZDNet UK. Reuters contributed to this report