Microsoft accused of stealing mobile phone trade secrets

In its complaint, Sendo lists 13 counts of fraud, negligent misrepresentation, breach of contract and civil conspiracy. The company, which is based in Birmingham and manufactures mobile handsets for network operators, is a former Microsoft partner.

Since 1999, the two companies worked jointly to develop the Z-100 Smartphone, a compact handset running Microsoft software and offering internet access, e-mail and multimedia functions.

In November 2002, however, Sendo ended the partnership unexpectedly, just weeks before the scheduled launch of the product. The company claimed that Microsoft did not provide access to source code and therefore Sendo was unable to tailor the necessary software.

Sendo now alleges in its lawsuit that Microsoft gained its trust and confidence through "false promises" of partnerships. Sendo specifically claims that Microsoft misrepresented its software as nearly complete despite serious flaws that made it incompatible with Sendo's hardware.

Sendo also claims that Microsoft used the partnership agreements between the two companies that gave it access to Sendo's confidential technical and customer information to steal trade secrets and disclose it to low-cost manufacturers based in Asia, enabling them to launch competitive products.

Microsoft has declined to comment on the complaint.

After ending the partnership with Microsoft, Sendo signed a contract with Nokia to develop an alternative smartphone. Two weeks before Sendo decided to cut ties with Microsoft, French mobile operator Orange launched its Orange SPV, a smartphone using Microsoft software.

Also, Microsoft is expected to announce today the launch of smartphones compatible with the Code Division Multiple Access (CDMA) technology, the mobile phone standard used widely in North America. Microsoft's previous mobile phone operating system was only compatible with the Global System for Mobile Communications (GSM), mainly used in Europe.