Google Facing $1B Trade Secrets Suit

Google encouraged a small software company to develop a critical conversion tool for its Google Apps suite of office productivity software and then stole the invention, depriving the developer of almost $1 billion in potential revenue, an Illinois state court lawsuit alleges.

Google repeatedly insisted it wanted the conversion program to be developed by an outside firm but changed its tune when it realized how much money might be at stake, plaintiff LimitNone LLC says in the complaint, filed in the Cook County Circuit Court.

Google Apps is a suite of office productivity programs Google sees as a direct competitor for Microsoft Office. Both include e-mail, calendaring, word processing, spreadsheet and presentation software.

The Office programs must be installed on each user's computer, while the Google Apps programs and all the users' data reside on Google's servers.

For Google Apps to succeed, the complaint explains, users must be able to quickly and easily move their existing data from Office to the Google programs.

Google had been unable to figure out a way to migrate data from Microsoft's e-mail and calendaring program, Outlook, to the Google Apps equivalent, the suit says.

LimitNone, a small software company based in Palatine, Ill., came up with a solution and approached Google in March 2007, the complaint says.

Google encourages outside businesses to develop programs for use with Google Apps and regularly holds conferences where these companies can meet with Google representatives.

According to the complaint, Ray Glassman and Jonathan Sapir, described as LimitNone's "sole members and managers," attended a Google Enterprise Partner conference March 14-15, 2007, and thereafter met repeatedly with Google engineers and executives to develop the conversion program, dubbed gMove.

Everything went smoothly, and LimitNone began selling an initial version of gMove in summer 2007, the suit says.

However, in December Google allegedly told LimitNone that it might have "competitors" in the market for Outlook/Google Apps conversion tools.

Later, LimitNone says, it became clear that Google itself would be developing its own conversion program.

The company allegedly had previously promised to refrain from competing with LimitOne's product.

Google quickly came up with its own product, which copied the "look, feel, functionality and distribution model" of gMove, according to the suit.

Given Google's past difficulties with the Outlook/Google Apps conversion program, there is no way it could have come out with a product so quickly unless it stole LimitNone's proprietary information, the complaint says.

Google allegedly estimated that gMove, which sold for $19, might have as many as 50 million customers and thus could generate as much as $950 million.

That amount of revenue was "just too big to come from someone else," and "this is how Google operates," a Google employee told LimitNone, the complaint alleges.

The suit includes claims for misappropriation of trade secrets under the Illinois Trade Secrets Act and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.

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LimitNone is represented by David A. Rammelt, Susan J. Greenspon, Caroline C. Plater and Matthew C. Luzadder of Kelley Drye & Warren in Chicago.