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Sendo vs. Microsoft: The Truth Comes Out

igotmybfg writes "The Register has a story which includes many details about the phone maker's Texas suit against the software giant. It seems that Microsoft had much more to gain from letting its partner fail than helping it to succeed: in the event of a bankruptcy, Microsoft acquired all of Sendo's intellectual property related to the z100 Stinger SmartPhone, and was then free to do whatever it wanted, which in this case turned out to be going behind Sendo's back and making a deal with Orange SPA." Read our original article about this to get more background information.

27 of 357 comments (clear)

  1. Sendo needs better lawyers... by HiyaPower · · Score: 5, Informative

    When you walk into the lion's den, you need more than a g-string on. To have put themselves in a position where M$ could grab Sendo's intellectual property by not giving them anything is stupid.

    That said, dealing in bad faith is something that is tortous. I hope Sendo recovers the stars the moon and the sky from these bastards.

    1. Re:Sendo needs better lawyers... by SerpentMage · · Score: 5, Interesting

      No the argument that Sendo is raising is very legit. Their argument is that they and Microsoft entered into a deal where the aim was to sell product. While they had backdoor clauses, MS, it would appear dealt in bad faith.

      Bad Faith is not something to underestimate. Whenever you enter into a contract you have to actually pretend to support the contract. Because otherwise you will be in contempt and be VERY liable. In fact this could get very messy for MS if it is proven that they acted in bad faith.

      This could be the case that kills MS. Think about it. This company had a once in a life time offer. They were ready, but the company they wanted to deal with was not. Result, you kill that company. You are liable because potentially the other party could have become very large and very rich.

      I guess finally history is catching up to MS.

      --

      "You can't make a race horse of a pig"
      "No," said Samuel, "but you can make very fast pig"
    2. Re:Sendo needs better lawyers... by plugger · · Score: 5, Insightful

      That's what I thought on first reading the article, but maybe this extract is significant:
      ...summer comes, and the code isn't ready. It isn't ready in the autumn, either, and this starts to play hell with Sendo's budgets. December rolls round, and according to Sendo, bugfixes that carriers have requested are being refused by Microsoft. Sendo is in a cash crisis, and a call to VCs is spurned. So Sendo asks Microsoft for a further cash injection, which is declined:
      "Microsoft refused with the full knowledge that this refusal would push Sendo to insolvency", claims Sendo in the filing.

      So, it looks like MS failed to deliver the software on time, which caused a cash-flow problem for Sendo. According to the story, MS also refused to make a scheduled payment to Sendo, thus causing them further financial difficulties.

      A friend of mine has an Orange/MS phone. Judging by the problems he has experienced (counter-intuitive address book, problems connecting via GPRS), I think MS have had genuine problems getting the software right. I mean, this phone shipped about a year after MS failed to deliver working code to Sendo, and it still isn't finished.

      I doubt this is a conspiracy by MS to steal Sendo's IP, but it still looks as if they bear some responsibility for the situation. If they signed a contract and can't honour it, they should be held accountable for any damage that causes.

    3. Re:Sendo needs better lawyers... by rseuhs · · Score: 5, Insightful
      That's like suing your parents after they pay for the first five years of college and then refuse to pay for year six.

      Well - no.

      Microsoft promised to have Stinger ready in summer 2001. Without Stinger, Sendo couldn't make any money. Over a year later Microsoft still hasn't got the product ready and is refusing to fix some of the bugs Sendo found. You get the picture?

      So yes, Sendo was stupid. Everybody is stupid who thinks Microsoft can put out a working product in schedule.

  2. Re:HOW STUPID CAN SENDO's executives be? by Alan+Partridge · · Score: 5, Insightful

    "Sendo got what they deserved - for neglecting the reality of harsh businesses practices."

    Not at all, business relationships - like all relationships - must have a basis of trust to succeed. Sendo obviously made the mistake of thinking that Microsoft was run by humans.

    --
    That was classic intercourse!
  3. They're suing *who* again? by Skyshadow · · Score: 5, Insightful
    Seems like the lawsuit here really ought to be "Investors in Sendo v. Sendo Execs".

    In MS's defense, there is no (nor should there be any) law against getting into really sweetheart deals at the expense of the other party. If I see an antique on eBay selling for $5 that I know to be incredibly valuable, I should buy it -- I'm under no imaginable obligation to contact the seller and let him know he's an idiot.

    And so it appears in this case: whoever was making decisions at Sendo really, really screwed up. They gave MS the power to destroy them, then gave them huge incentive to do so.

    That's life.

    --
    Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
    1. Re:They're suing *who* again? by Qzukk · · Score: 5, Insightful

      It appears that the deal included some expectation that Microsoft would make certain payments of capital, as well as provide the software on-time (or a reasonable software-world representation of such) which according to the story neither happened.

      Its one thing if Sendo signed a paper saying "Go bankrupt and we get your stuff", another entirely if the paper said "We'll do these things to prevent you from going bankrupt, but if you do anyway, we get your stuff" and then not having "these things" done.

      --
      If I have been able to see further than others, it is because I bought a pair of binoculars.
    2. Re:They're suing *who* again? by monomania · · Score: 5, Interesting
      there is no (nor should there be any) law against getting into really sweetheart deals at the expense of the other party....

      Three scenarios:

      1. Your beloved wife dies, and you are paid her life insurance to compensate. You are rich, but miserable.

      2. You have grown disenchanted with your marriage, and murder your wife for the insurance money.

      3. You actively seek out rich women to marry and murder.

      Now, business contracts with such terms as Sendo/MS implemented exist to obtain, if necessary, in worst cases, a situation similar to the First scenario. On the face of the evidence, MS operated according to the Second, and may additionally (upon examination) be shown to have operating along the lines of the Third.

      This is not business as usual -- unless you are, say, an Enron executive. And it's a really bad time for MS to be proven of that ilk in court...

  4. How brazen can Microsoft's executives be? by MonTemplar · · Score: 5, Insightful

    I mean, if I would have THIS clause in the contract, it is NORMAL to assume that MS would play hardball to then gain all the rights. This is to be expected. Unless they crossed some lines then (which to proove will be the problem of Sendo), Sendo got what they deserved - for neglecting the reality of harsh businesses practices.

    This part doesn't suprise me much, having read up on the history of Microsoft's dealings with its 'partners' over the years.

    What gets me is that this sequence of events started back in 2001, at the time that Judge Jackson was throwing the book at Microsoft for, amongst other misdemeanours, doing the very same thing they were evidently planning on doing to Sendo!

    Even if Sendo's case falls flat, it will have served to make Microsoft's circle of friends even smaller. What more proof could you ask for to show that the people in charge of Microsoft have not learned to play fair?

    --
    -MT.
    1. Re:How brazen can Microsoft's executives be? by haggar · · Score: 5, Interesting

      Interestingly, executives in software companies don't seem to learn from history/other's mistakes: I guess you know how MS stole valuable assets and IP from borland trough their engineers - made very high offers to the Borland engineers while contacting with Borland for "cooperation". Well, the same identical thing happened years later to Oracle (with Microsoft, of course), after which MS SQL server started to suck less.

      --
      Sigged!
  5. Microsoft's business model by Anonymous Coward · · Score: 5, Funny

    1. Profit. 2. Profit???? 3. Profit.

  6. Tiem will tell... by vpreHoose · · Score: 5, Insightful

    if Sendo engineers can actually integrate onto a Series 60 platform.
    Just because the OS can't do what you need, then just bypass it. A classic example of this is SIM Locking to a particular network, or group of networks. The SDK (Pocket PC 2002 and Smartphone) doesn't support this. Sendo complain, HTC, MiTac, Samsung, and Compal work around it (to varying degrees of success).

  7. It's OK folks, by countach · · Score: 5, Interesting

    Don't believe this nonsense. For example Microsoft would NEVER, screw over Miguel de Icaza and the MONO effort. Trust them. If Microsoft says they support the MONO effort, we can take them at their word. They are people of high integrity and whatever they say, they mean. They would never lead others along the garden path, with every intention of crushing them later on.

    +5 Sarcasm.

  8. Re:I'm starting to understand by Anonymous Coward · · Score: 5, Insightful

    You can try to twist this in any pro-microsoft way you like, but the plain fact is that they have again been very, very bad.

    And we are not talking about some presumed badness that may or may not happen in the far future. We are talking about well-documented badness that happened just now.

    Running your business partners into the ground and stealing their trade secrets is NOT normal business practice.

  9. They have proven it again. by miffo.swe · · Score: 5, Insightful

    If you are a company with any intellectual holdings or patents, dont ever work with Microsoft. If you only manufacture things and dont know anything about what you do then its fine.

    Its nearly written in stone since before. Microsoft is a midas touch to any company with any form of knowledge that works together with them. Sendo should have realized this ofcourse. Still that doesnt in any way defends what Microsoft did wich clearly fradulent behaviour and underhanded business practises. If every company behaived like Microsoft all resources would go to fighting instead of developing good products. This kind of mafia methods needs to stop now!

    In my book thats bad for me and other consumers.

    --
    HTTP/1.1 400
  10. Standards by den_erpel · · Score: 5, Insightful

    From the article:
    To Americans, the telecom world's model of promoting growth through vertical investments (a Nokia or an Ericsson bails out the carriers) and through IP sharing (yeuch!), and promoting common standards (that's goddam Communism!), must look like a filthy and incestuous business.

    Perhaps slightly unrelated (yes, mod me down), but I wonder if the cell phone market would ever have been that successful as it is now without these common standards, especially if you think that the mobile market/penetration is the largest in Scandinavia. Imagine a world where a Nokia phone could not communicate with a Sony/Ericsson, what a waste of resources would that be, ... I would say we're lucky this technology wasn't determined by American companies (and I basically don't care if they are European or Asean), or else we'd pay double for our phones, just for the patents to use the proprietary communication format.

    But hey, isn't that exactly what we have on the desktop?

    --
    Genius doesn't work on an assembly line basis. You can't simply say, "Today I will be brilliant."
  11. This doesn't change anything by Anonymous+Custard · · Score: 5, Insightful

    1. Sendo sues MS.

    2. MS fights for a little while.

    3. Sendo gets more desperate, and settles with MS for enough money to appease their investors.

    Case closed.

  12. Enabling environment? by Allt · · Score: 5, Interesting
    I found this interview with a former employee of Microsoft on Kuro5hin.
    You worked at Microsoft for ten years, then left the company two-and-a-half years ago. From your perspective, do you think Microsoft has fundamentally changed as a result of the antitrust lawsuit?
    My short answer would be "No".
    There were many positive things about the Microsoft work environment. But there were some negatives. People use the term "enabling environment" to mean a situation that encourages someone to act in a negative way, such as drinking alcohol heavily, by mitigating the negative impact of the behavior, and providing tacit approval for it. Well, Microsoft constructed an enabling environment for socially obnoxious behavior: it was welcomed and rationalized into positives. If you were late for meetings it meant you were busy doing important work, if you were extremely confrontational it meant you were passionate about your job, if you required subordinates to work long hours it meant you were committed to the product, if you turned down everyone you interviewed it meant you weren't soft, and so on.
    So Microsoft had this system that encouraged and rewarded people who acted a certain way. And some of that behavior trickled out into meetings with customers and partners, where they were correctly seen as negatives and helped foster the anti-Microsoft attitude. But since Microsoft kept hiring and promoting obnoxious people, they kept being obnoxious.

    I don't know how much truth lies in this, but when any organization becomes big enough, culture plays a big role in dictating what is allowed and what's not.
  13. Re:duh by malkavian · · Score: 5, Interesting

    Uhh.. Score 5? Someone's got an odd concept of Capitalism.
    Capitalism works fine when everyone's honourable, and keeps their word, and basically plays the game. People make products and make money. Best product wins (votes=money).
    MS, as usual, are breaking the rules, and pulling their own game (kill all other contenders), which isn't Capitalism.
    In Capitalism, you end up with a flourishing ecosystem of companies providing a variety of competing products. Evolution selects the best.
    In the MS game, you end up with one monolithic power providing what it thinks is best for people.
    In fact, MS' way is more like communism than capitalism.
    "To each unto their needs'..
    MS decides what each person needs, and that's what they get, like it or not. It attempts to take all competition out of the arena, so, if you want an office suite, you have MS office, as MS has killed the competition.
    So, really, MS is anti-capitalist.

    Malk

  14. UK Sunday Press by Martin+S. · · Score: 5, Informative

    Over the Week-end this was plastered all over the UK's Broadsheets (quality) news papers in the last few day; and not technology sections but in the Business. The damage to Microsoft's reputation for bad-faith with the 'Captains of Industry' from this episode will be profound.

    There is also refuge for Sendo in UK bankruptcy laws, where Creditors have an incredible amount of power in the say of the winding up of a company. There are two forms, Administration, a private sector accountant is appointed to take over running of the business. He has absolute authority in to persue the Creditors best interests, even if the only real assets are IP, bad debts and damages. In this fails the next step is Insolvency, Government investigators from the DTI investigate why the business failed, have criminal investigative powers and can sequestrate assets of bad debtors, and prosecute offenders. If Sendo do go bust that is only the start of Microsoft problems.

  15. Re:HOW STUPID CAN SENDO's executives be? by richie2000 · · Score: 5, Funny
    The local mobster-boss, of course. The Mafia actually has a sense of honour and ethics, it's just not perfectly aligned with everyone else's. Bill Gates does not have that sense, at all.

    OTOH, his sense of smell more than compensate for this deficiency - he can smell a dollar bill from a distance of 12 miles, even if the bill is downwind, underwater and he has a severe cold. This has been confirmed in secret tests in the Microsoft labs in Redmond.

    --
    Money for nothing, pix for free
  16. Product development and business 101. by zerofoo · · Score: 5, Insightful

    Anyone familiar with the term "critical path"? That is the path in the development cycle that affects all others, and ultimately the deliverablilty of the product. If you delay the critical path, you delay the product.

    If you are planning a product that will determine the success of your company, you should make sure that critical path is kept in-house where it can be controlled. Sendo's management obviously didn't get this. (A better buisiness decision might have been to use an open source operating system and hire a bunch of developers to customize it for you.)

    This is why many smaller broadband companies went belly up in the ".com roaring 90's". They depended on someone else (telcos and cable companies) to deliver on their critical path. That's just plain stupid.

    -ted

  17. Oops, they did it again. by kfg · · Score: 5, Insightful

    I mean, really. Anyone considering a deal with MS that involves the transfer, licensing, ownership of IP to Microsoft should click their heels together three times and say:

    "Spyglass, Spyglass, Spyglass."

    It's not like MS hasn't been caught redhanded pulling this sort of crap before.

    KFG

  18. Rights... by stubear · · Score: 5, Insightful

    I keep hearing on /. about this thing called a Constitution which guarantees one to be innocent until proven guilty. I guess that only applies selectively according to the whims of geeks? Rights exist to protect ALL whether you agree with or even like others. I guess all the whining is really the releasing of a bunch of hot air from people with no life.

    What did you expect IN THE FILING FROM SENDO?!?!?! "Microsoft treated us with the utmost respect, w screwed up and lost a bunch of money but we're going to use anti-Microsoft sentiment to push this case along and get a crack at the 40+ billion dollars they have sitting around just itching to be plundered by a bunch of lawyers."

    The filing is Sendo's side of the case but since it's a lawsuit against Microsoft and /. doesn't like Microsoft, ANY lawsuit, regardless of merits, is a good thing. Until the judge rules, neither side is guilty, PERIOD.

  19. Lion's share... by lynx_user_abroad · · Score: 5, Informative
    Borrowed from Dr. Larry Fogelberg but originally from Aesop:

    The lion approached the wolf and the fox, and suggested that they form a partnership for the purpose of hunting game. The lion explained that each had particular talents that would lend themselves to such a partnership. The fox was wily and could trick the quarry into the open; and the wolf was swift of foot, so that he could direct the quarry to where the lion lay in wait to complete the kill. After some discussion, the wolf and the fox agreed to enter into a partnership with the lion. All went as planned and a deer was killed, but when the wolf and the fox tried to share in the kill, the lion challenged them. They stood by, helplessly, and watched the lion devour the entire carcass. Afterward, they asked the lion why he had only left them a few scraps. The lion replied, "All I took was the lion's share."
    --

    The thing about things we don't know is we often don't know we don't know them.

  20. Re:And another thing.. by ChaosDiscord · · Score: 5, Funny
    This isn't bad editing, it's on purpose and only undermines the impact of the story by showing where the Register's bias is.

    I totally agree. I hate it when a news source shows where its bias is. Bias should be subtle so you get the illusion that you're just getting facts, making it easier to deceive myself that I'm getting objective news instead of slanted news. Have the bias hanging out, it's like a news organization's private parts hanging out. Won't someone think of the children!

    Now if you'll excuse me, I need to go review the carefully researched, reasoned, and unbiased discussion on the Wall Street Journal's editorial page.

  21. Re:Wow by jc42 · · Score: 5, Insightful

    How can [Bill Gates] be evil when he wants to save children in third world countries from AIDS?

    Well, according to several recent reports on his contributions to various efforts, he wants to save them from the threat of linux even more he wants to save them from AIDS.

    --

    --
    Those who do study history are doomed to stand helplessly by while everyone else repeats it.