Alphabet Inc (NASDAQ:GOOGL) Faces Lawsuit Regarding Project Loon

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Alphabet Inc (NASDAQ:GOOGL) is facing a lawsuit filed against it by a company called Space Data Corporation regarding Project Loon, an Alphabet initiative to launch balloons in the stratosphere to cover internet coverage gaps.

The lawsuit claims that Google stole Wi-Fi technology that it uses in Project Loon. Space Data Corporation claims that it invented the technology more than ten years ago. The Arizona tech firm filed the lawsuit in a Federal court in San Jose on Monday. The firm claims that Google stole the ideas during a meeting between top executives of both companies in 2007.

Alphabet launched Project Loon as a research project with the aim of setting up a wireless network in the sky which would make it possible to deliver high-speed internet to places that do not have high-speed and quality internet connections. Space Data revealed two patents that suggest that the firm has rights over the technology which seeks to provide the internet through a network of balloons. Space Data filed for the patents in 1999. The company argues that Project Loon violates the patent rights.

Alphabet also owns a few patents based on Project Loon, though its patents do not refer to the technology provided by Space Data. The latter currently has two products which include SkySite and SkySat, which plan to offer internet connectivity based on balloons just like Project Loon. Though Space Data’s system is not used on a large scale, the firm has FCC licenses that grant authority to offer broadband spectrum services in areas that experience low internet coverage in the Gulf of Mexico and Alaska.

Google founders Larry Page and Sergey Brin visited Space Data’s offices in 2008 together with ten other executives before the company came up with the idea for Project Loon. This suggests that Alphabet might have acquired the idea from Space Data. It had been thought that the visit would materialize into an acquisition deal, but that did not happen. Alphabet came up with Project Loon three years after the visit. Space Data also claims that the Alphabet executives signed a non-disclosure agreement before the visit and argued that Project Loon is evidence that they violated those agreements.

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