Skyhook Will Take the Location Battle to Court

Skyhook Wireless took a beating recently as news surfaced that one of its flagship customers is now using its own location data rather than the database provided by the Boston-based startup. Skyhook, which maintains a collection of location data gathered from its triangulation of Wi-Fi networks, no longer provides location on newer Apple devices. The iPhone maker said in a letter to two members of Congress that it was now using its own data rather than the longitude and latitude coordinates provided by Skyhook.

Skyhook was already facing some fierce competition from Google, which has been creating its own database of places using Wi-Fi networks (see the video interview below). The Apple news, which came out in a July 12 letter but was publicized last week, put Skyhook in the middle of the two giants trying to dominate the mobile location market. Plenty of people wondered if Skyhook was toast.

On Monday, when Skyhook put out a news release saying the company was just granted four patents related to the way it determines location using Wi-Fi networks, I called Ted Morgan, CEO of Skyhook, to see if the release emphasizing its new intellectual property was a coincidence.

“We think that the Wi-Fi location piece was what makes location work in general … we have invested in it, and we have been doing it longer than anyone else as proven by the 50 patents we’ve filed and the 15 awarded so far,” Morgan says. “They show we did start this and provide us some protection for what we’ve done so far.”

Morgan declined to comment when I asked if he’d sue to keep Apple, Google or anyone else off his startup’s turf, but it’s a good bet he has lawyers lined up and ready to file some infringement suits. (Because of a series of Supreme Court rulings back in 2007 most firms now sue before opening licensing agreements, making infringement lawsuits more common). Judging from the patents named in the release, Skyhook isn’t kidding around:

11/774,399: System and method of improving sample of WLAN packet information to improve Doppler frequency of a WLAN positioning device.
11/950,178: Location-based services that choose location algorithms based on number of detected access points within range of a user device.
11/950,242: Location-based services that choose location algorithms based on number of detected access points within range of a user device.
11/430,079: Estimation of speed and direction of travel in a WLAN positioning system.

It’s a good bet that Apple and Google aren’t kidding around either. As the web goes mobile, and the phone becomes the platform for the next generation of technology innovation, owning the underlying positioning data isn’t just a source of revenue from application companies seeking to find out where users are to offer them services; it’s a source of demographic information that could be valuable to many.”Location is a cornerstone of mobile and we’re sitting in the middle of it,” said Morgan.

While application providers can offer advertisers information about specific users, Morgan maintains that the information Skyhook can provide (or Google or Apple) is much broader, allowing demographers, advertisers or researchers to understand where people are. As opposed to deep information on a person that a service like Fourquare can provide, Skyhook can offer a breadth of information about an entire city’s movements. Morgan claims he has information on 100 million users and can get it regardless of the app they might use.

Since I caught him after a board meeting, I asked Morgan what the mood was when he met with his investors. He responded, “The mood was positive. Not every fund is managing a startup that gets in the middle of a major technology battle. If we’re smart about this, we’ll end up a major technology company, and if not, we’ll end up squashed. It’s worse if no one cares about you.”

That’s what I love about entrepreneurs. Put them between a rock and hard place, (or Apple and Google) and they’ll find the bright side. For more on Skyhook’s dilemma, check out the interview I did with Morgan from the end of April when we discussed its looming fight with Google.

Related GigaOm Pro Research (sub req’d): Location, the Epicenter of Mobile Innovation

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