Microsoft Settles With U.K. 'Smartphone' Company

The two companies fell out two years ago over the development of Sendo's "smartphone," which originally was planned to operate with Microsoft software.

Terms of the settlement, including any financial compensation, were not disclosed.

Robert Pocknell, Sendo's group general counsel, said the settlement reinforces Sendo's commitment to the protection of its intellectual property. "With this action behind us, the company can now focus on its future development and growth," Pocknell said.

"We're pleased with this resolution and look forward to continuing to collaborate with phone manufacturers to bring innovative products to mobile customers," said Tom Burt, Microsoft's corporate vice president and deputy general counsel.

Since 2001, Sendo had been developing its Z100 "smartphone," a phone and personal device hybrid, to run on Microsoft's software. Microsoft also owned a minority stake in the company.

But in November 2002, Sendo abruptly announced it would not ship the Z100 phone and instead would work with Microsoft rival Nokia.

Sendo filed suit in the U.S. District Court in Texarkana, Texas, alleging misappropriation of trade secrets, fraud, breach of contract and other claims in December. Sendo contended Microsoft's software was repeatedly late, full of bugs, and delayed the launch of the Z100 phone to the point that Sendo was struggling for cash.

Microsoft denied those allegations and blamed the failure on Sendo. Microsoft said the company failed to meet its obligations to design and develop the Z100 phone according to an agreed-upon schedule.

Microsoft reportedly held a 4 percent stake in Sendo, which is based in Birmingham, England.

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