Google Hit With $1 Billion Lawsuit Over Trade Secrets

A technology startup that developed software for migrating data from Microsoft Outlook to Google's Web mail has filed a lawsuit against the search engine, claiming Google owes the smaller company more than $1 billion for stealing its trade secrets.

LimitNone filed the lawsuit in Cook County Circuit Court in Illinois earlier this week. The startup, which has less than five employees, is accusing Google of stifling competition through misappropriation of the smaller company's trade secrets. LimitNone is seeking punitive and actual damages, plus attorney fees.

Starting in March 2007, Ray Glassmann and Jonathan Sapir, the owners of Palatine, Ill.-based, LimitNone, met with Google representatives to discuss the smaller company's gMove software, according to the complaint. The technology made it possible to move Microsoft Outlook data, such as e-mail, to Google's Gmail, which is part of the company's package of software that offers an online alternative to Microsoft's Office productivity suite.

For the next nine months, LimitNone worked closely with Google engineers on developing version 2.0 of gMove. In addition, LimitNone met with Google business customers to test the migration tool. "The entire closet was open to Google, at Google's request," LimitNone lawyer David A. Rammelt of the law firm Kelley Drye & Warren told InformationWeek on Wednesday.

LimitNone agreed to share its technology with the understanding that it would be kept confidential. Google, however, did not sign a non-disclosure agreement, Rammelt said. "When a mega-company like Google that professes 'Don't be evil' tells you they love your product and says they are not going to make a competing product, you believe them." "Don't be evil" is Google's pledge of ethical corporate behavior.

In December 2007, Google told LimitNone that it had decided to build its own migration tool, which later became Google Gmail Loader. At the time, a Google representative said the software had the potential of reaching 50 million customers and that was "just too big to come from someone else," according to the complaint.

Google declined comment Wednesday. "We have not received the complaint and will have no comment until we are able to review it," a spokesman said.

LimitNone planned to sell the software for $19 a copy, so Google is accused of depriving the company of $950 million in potential business. Under Illinois state law, punitive damages could be double or triple the actual damages, Rammelt said.

LimitNone does not have a patent for its technology. The process of getting a patent from the U.S. Patent and Trademark Office was too complex and expensive for a company the size of LimitNone, Rammelt said.

LimitNone abandoned its gMove software after Google launched its own technology. The company is now building software for the Apple iPhone.

Kelley Drye & Warren has tangled with Google before. Rammelt was the lead attorney in a trademark case against Google's AdWords online advertising system. The plaintiff American Blinds dropped the suit last September, citing mounting legal costs. Google declared victory in the four-year battle.