Skyhook Wireless, Inc. v. Google Inc.

After mobile electronic device manufacturers Motorola, Inc. (Motorola), and Samsung Electronics Co., Ltd. (Samsung), withdrew from business deals with software devel- *612 aper Skyhook Wireless, Inc. (Skyhook), Skyhook filed a complaint against the defendant, Google Inc. (Google), alleging intentional interference with Skyhook’s contract with Motorola, intentional interference with Skyhook’s advantageous business relations with both Motorola and Samsung, and violations of G. L. c. 93A. 1 A judge of the Superior Court granted Google’s motion for summary judgment on all counts. 2 We affirm.

1. Background. 3 Consistent with summary judgment standards, the facts upon which we rely are either undisputed or taken in the light most favorable to Skyhook. See Drakopoulos v. U.S. Bank Natl. Assn., 465 Mass. 775, 777 (2013). 4

This case arises from the aborted plans of Motorola and Samsung, manufacturers of mobile electronic devices (including so-called “smart phones”), to license and install Skyhook’s software product, XPS, to provide location services on their “Android” mobile devices (described below). Location services identify where the mobile device is physically positioned. Alone and in conjunction with other software applications, they allow the device user to find his or her location, to identify the location of nearby facilities, and to receive marketing information about commercial establishments in the vicinity. Location systems also collect location data from the device and return that data to the software provider for inclusion in its location database. The data then can be used to improve the accuracy of location results, as *613 well as for commercial purposes.

Android is a mobile device operating system developed and maintained by Google. It is an “open source” operating system, meaning that it is publicly available and can be used without charge; however, Google owns and controls the use of the Android trademárk and related trademarks, as well as the use of a group of proprietary mobile services applications known as Google Mobile Services (GMS) Apps. Google requires, by contract, that devices marketed under Android trademarks and including GMS Apps meet Google’s compatibility standards, which are set out in detail in the Android Compatibility Definition Document (CDD) published by Google. 5

In addition to a number of well-known software applications (e.g., Gmail, Google Maps, Google Search, and YouTube), GMS Apps include an application known as Network Location Provider (NLP), which helps to supply Google’s location services to mobile devices. In part, NLP works in conjunction with two application programming interfaces (APIs) that are part of the Android operating system: 6 the GPS Provider API, which determines a device’s location using the United States government’s Global Positioning System (GPS) satellites; and the Network Provider API, which determines location based both on triangulation from nearby cellular communications towers (cell towers) and on the device’s detection of local wireless network access points (“Wi-Fi” networks). 7 - 8 Google’s Software Development

*614 Kit (SDK), which assists third-party developers in creating new applications for use on any Android-compatible device, specifically informs developers which kinds of data are used by the GPS Provider API (satellite) and Network Provider API (cell tower and Wi-Fi) to fix location. The SDK is incorporated in the CDD by reference, and plays a role in determining whether Google’s compatibility standards are met.

Like Google’s NLP, Skyhook’s XPS also determines the location of a mobile device by collecting information from GPS satellites, cell towers, and Wi-Fi networks. However, XPS operates by integrating the location data received from these three different sources. Through this approach, XPS achieves greater speed in reporting a location result. Another difference between the Google and Skyhook systems is that, unlike Skyhook’s XPS, Google’s NLP includes “reverse geocoding” functionality, which converts longitude and latitude coordinates to street addresses and place names.

In supplying location services software to mobile device manufacturers, both Google and Skyhook expect and require that they will be able to collect location information from the mobile devices on which the software is installed. Thus, when enabled on an Android device and subject to the user’s consent, NLP collects “network data” for Google, i.e., information about nearby Wi-Fi networks and cell towers. XPS likewise collects such information for Skyhook. Both companies consider this retrieval of network data, and the accuracy of the data, to be essential to the location databases they maintain as part of their business models.

In April and June of 2009, respectively, Samsung and Motorola *615 entered into contracts with Google allowing them to use the Android trademarks and to preload specified GMS Apps, including NLP, 9 on their mobile devices. The contracts did not specify that Google would be the exclusive provider of location services software for the manufacturers’ Android devices. However, the contracts did require the devices to meet Google’s Android compatibility standards, 10 and also required the manufacturers to “accurately reproduce” the GMS Apps on the devices. Under the contracts, the ultimate distribution of the devices was subject to Google’s prior written approval. 11

Thereafter, unbeknownst to Google, both Motorola and Samsung entered into contracts with Skyhook. In September, 2009, Motorola entered into a licensing and distribution agreement with Skyhook by which Motorola agreed to preload XPS on its Android devices, subject to an exception for devices “where Motorola is contractually prohibited by a qualified third party.” The contract defined “qualified third party” to include “a certi- *616 lying entity which has the right to define and approve the technical specifications required to be a[n] Android-compliant device and which has declared the Embedded Software to be non-compliant.” The Motorola-Skyhook contract also provided that Motorola would not authorize or enable any other party to use XPS or Motorola’s devices to collect location data. Subsequently, in May, 2010, Samsung also entered into a licensing agreement with Skyhook, but on a different basis. Pursuant to its contract with Skyhook, Samsung agreed to pay a guaranteed minimum for the right to install XPS on its Android mobile devices. However, Samsung was not obligated to do so.

After the execution of the Motorola-Skyhook contract, there was considerable discussion within and between these two companies as to whether XPS was Android-compatible. This discussion was prompted by the fact that XPS was configured to report “hybrid” location data — information derived not only from GPS satellites, but from the network data obtained using cell towers and Wi-Fi networks — through Google’s GPS Provider API, which was described in Google’s SDK as delivering satellite data alone. Both companies pondered whether XPS would violate Android compliance by giving the incorrect impression that the reported location results came from GPS satellite sources and met the high level of accuracy that users and independent application developers expected from satellite data. 12

Google remained unaware of Motorola’s contract with Skyhook until April 26, 2010, when, without Motorola’s contractually required approval, Skyhook released a press briefing entitled “Motorola to replace Google with Skyhook,” and stating in part that “Motorola is the first Android device maker to abandon *617 Google for its location services.” Google employees immediately began to discuss this development and its implications, including the risk that other device manufacturers would switch to Skyhook and Google would suffer a loss in the “ability to continue collecting data to maintain and improve [its] location database.”

Soon thereafter, on May 7, 2010, representatives of Google and Motorola met to discuss Motorola’s use of XPS to provide location services. At this meeting, Google employees raised the same hybrid location reporting issue that Motorola and Skyhook had been discussing. 13 A few weeks later, Google informed Motorola that, due to this reporting issue, Motorola’s implementation of XPS would fail to meet Android compatibility requirements. Nevertheless, Google emphasized that if Motorola could implement Skyhook in a way that resolved the reporting issue, then “by all means let’s do it.”

At the same May 7 meeting, Google identified another issue with XPS — its inability to convert longitude and latitude coordinates to street addresses and place names. Motorola could not effectively market its devices without this reverse geocoding function, and, as the issue developed over the next few weeks, it became apparent that Motorola also would need to rely on Google’s competing product, NLP, in order to provide for reverse geocoding. Skyhook acknowledged that Motorola’s use of NLP was the only available option, but would agree to its use only if Motorola altered NLP to block its collection of competitive location data for Google.

Motorola and Skyhook began communicating with each other about both the hybrid location reporting issue and the data collection issue. On May 28, 2010, with these issues still unresolved, Google instructed Motorola not to ship its devices with XPS. Motorola complied and removed XPS from devices being prepared for shipment in July. A few days later, on June 4, Skyhook submitted to Motorola revised software that was intended to fix *618 the hybrid location reporting issue. Subsequently, Google made it clear to Motorola that it was free to include XPS, as long as the revised software did not deviate from Google’s compatibility standards by returning non-satellite data through the GPS Provider API.

The data collection issue remained an active concern, however. Google remained steadfast that, under its contract with Motorola, Motorola was required to include the applications it licensed from Google (including NLP and other applications that collected location data) in their entirety — and without neutering their data collection function. Skyhook, for its part, insisted that its contract with Motorola gave it the right to block Google from collecting location data on Motorola devices, and that the data collection function on Google applications would have to be disabled. Faced with these conflicting demands, Motorola eventually notified Skyhook that it was terminating their agreement.

As for Samsung, in March, 2010, and entirely independent of any input from Google, Samsung began to express concerns to Skyhook about the cost of XPS. Several months later, in June, 2010, Google first discovered that Samsung had contracted with Skyhook and that Samsung already had begun shipping some devices containing XPS. Google informed Samsung of the same hybrid location reporting issue it had raised with Motorola, stating that it “cannot approve the current implementation as-is.” On July 10, Samsung notified Skyhook that it was not going to use XPS because “Google Locator Was good enough in [the United States] region and [the] financial burden from Skyhook was another reason.”

On September 15, 2010, Skyhook filed the present action, claiming that Google had, with improper motive or means, intentionally interfered with its contract with Motorola and with its advantageous business relations with both Motorola and Samsung, and that those acts constituted violations of G. L. c. 93A. Google moved for summary judgment, and the judge ruled in its favor. On the interference claims, the judge reasoned that the evidence did not support a finding of improper motive or means. On the c. 93A claim, the judge ruled that no reasonable jury could conclude that the conduct at issue occurred “primarily and substantially in Massachusetts” as required by c. 93A, § 11.

2. Discussion, a. Standard of review. We review the grant of summary judgment de nova to determine “whether, viewing the evidence in the light most favorable to the nonmoving party, . . . *619 the moving party is entitled to a judgment as a matter of law.” Go-Best Assets Ltd. v. Citizens Bank of Mass., 463 Mass. 50, 54 (2012), quoting from Juliano v. Simpson, 461 Mass. 527,529-530 (2012). See Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404 (2002); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711-712 (1991). While our review is de nova, we have the benefit of the motion judge’s thorough and thoughtful decision. After independently considering the record and the applicable law, we reach the same conclusions.

b. Interference claims. To establish a claim of intentional interference with contractual relations, the plaintiff must prove that (1) the plaintiff had a contract with a third party; (2) the defendant knowingly induced the third party to break that contract; (3) the defendant’s interference, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant’s actions. United Truck Leasing Corp. v. Geltman, 406 Mass. 811, 812-817 (1990). Similarly, to establish a claim for interference with advantageous business relations, the plaintiff must prove that “(1) [the plaintiff] had an advantageous relationship with a third party (e.g., a present or prospective contract or employment relationship); (2) the defendant knowingly induced a breaking of the relationship; (3) the defendant’s interference with the relationship, in addition to being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the defendant’s actions.” Blackstone v. Cashman, 448 Mass. 255, 260 (2007). It is undisputed that Skyhook has established the first two elements of each claim. As to file third element, although Google does not concede that its actions constituted interference, we need not confront that issue because, like the motion judge, we conclude that Skyhook’s claims founder because Skyhook cannot demonstrate on this record that any interference by Google was improper in either motive or means. We therefore need not reach the fourth element, harm to Skyhook.

In essence, Skyhook’s arguments are as follows. As to motive, Skyhook takes the position that a jury should be allowed to decide whether Google’s concerns about hybrid location reporting and data collection were a pretext for its true motive, which, according to Skyhook, was to “bully Skyhook out of the market.” As to means, Skyhook takes the position that Google unfairly interpreted its contracts with Motorola and Samsung in order to pressure them to abandon their deals with Skyhook. Neither point has merit.

*620 i. Google’s contractual rights. We begin with a question of law — the interpretation of Google’s contracts with Motorola and Samsung. Contrary to Skyhook’s position, those contracts plainly gave Google the right to hold the manufacturers to requirements pertaining to compatibility and functionality. 14 With respect to the hybrid location reporting issue, the compatibility standards to which both manufacturers were bound required that, as described in the CDD, “[djevice implementations MUST NOT omit any managed APIs, alter API interfaces or signatures, [or] deviate from the documented behavior.” In addition, the SDK, which was incorporated into the compatibility standards, informed third-party software developers as to the documented API behavior: that the GPS Provider API determined location using GPS satellites, while the Network Provider API did so based upon network data. Because the manner in which XPS reported hybrid location data through the GPS Provider API was in violation of those standards, Google had the contractual right to stop distribution of devices containing XPS as it originally was designed. 15

With respect to the data collection issue, in order to ship their devices with the Android trademark and Google’s proprietary GMS Apps, the manufacturers were contractually obliged to leave the GMS Apps fully functional. When Skyhook conditioned Motorola’s use of the revised version of XPS on Motorola’s removal of NLP’s data collection function, Google was entitled,

*621 under its contract with Motorola, to insist upon the “accurate reproduction” of Google applications, including NLP. 16

ii. Motive. We next consider whether, on this record, it reasonably could be found that Google’s assertion of its contractual rights was but a smokescreen for its desire to shut Skyhook out of the Android market. We conclude that no such finding would be warranted. The legitimacy of the reporting issue is illustrated by the fact that long before Google even knew that Motorola was going to use XPS, the same problem had been recognized and debated by engineers at both Skyhook and Motorola. Furthermore, Google never categorically prohibited Motorola’s use of XPS. Google informed Motorola that it had no objection to Motorola’s installation of XPS if it could be installed in a compatible way, and, after June 4, 2010, when Skyhook submitted revised software, Google never instructed Motorola not to use the revised XPS.

Likewise, the legitimacy of the data collection issue cannot reasonably be questioned. Skyhook, no less than Google, considered the collection of network location data to be essential for operational and business reasons. If anything, Skyhook’s criticism of Google’s position on data collection seems disingenuous. Unlike Google, Skyhook insisted upon being the exclusive recipient of location data. Skyhook also attempted to convince Motorola to disable the data reporting functions on GMS Apps, despite Motorola’s valid concerns about its contractual obligations to Google.

Although the record substantiates that, upon learning of the Motorola-Skyhook contract, Google was concerned about losing customers for its own location services and the ensuing harm to its valuable location database, advancing one’s own economic interest, by itself, is not an improper motive. Pembroke Country Club, Inc. v. Regency Sav. Bank, F.S.B., 62 Mass. App. Ct. 34, 39 (2004), citing Hunneman Real Estate Corp. v. Norwood Realty, Inc., 54 Mass. App. Ct. 416,428-429 (2002). Even if, as Skyhook *622 insists, its location services were superior to Google’s, it was not improper for Google to be motivated, in part, by competition. Although Skyhook maintains that competitive motivation can be proper only if it will advance better products and services in the marketplace, here the only parties equipped to decide which product was better for their needs at that time and under all relevant circumstances were Motorola and Samsung.

iii. Means. “The assertion by a party of its legal rights is not ‘improper means’ for purposes of a tortious interference claim.” Pembroke Country Club, Inc., supra at 40. See Restatement (Second) of Torts § 773 (1979). 17 As previously discussed, Google had the contractual right to stop shipments of Motorola and Samsung devices unless and until the reporting issue was resolved. Its exercise of that right did not constitute improper means. By the same token, Google had the contractual right to insist that its proprietary applications, including their location data collecting functions, would remain intact. Any economic pressure felt by the manufacturers was simply a product of their preexisting contractual arrangements with Google and their desire to continue marketing their devices under the Android trademarks and with proprietary Google applications. There is no evidence that Google used threats, misrepresented any facts, or used any other improper means.

b. Violation ofG. L. c. 93A. Under c. 93A, § 11, it is Google’s burden to demonstrate that “the center of gravity of the circumstances that [gave] rise to the claim” was not “primarily and substantially within the Commonwealth.” Kuwaiti Danish Computer Co. v. Digital Equip. Corp., 438 Mass. 459, 470, 473 (2003). Looking only to the allegedly unscrupulous conduct, factors to examine include, but are not be limited to, the place of conduct, and the “situs of loss.” Id. at 472 n.13, 474-475. We *623 agree with the motion judge that Google has established, as matter of law, that c. 93A does not apply here.

At the relevant time, Google’s headquarters was in California, Motorola’s headquarters was in Illinois, and Samsung’s headquarters was in South Korea. All of Google’s allegedly unfair or deceptive acts, including its communications, both physical and electronic, occurred outside the Commonwealth. Although Massachusetts would be the situs of any royalty revenue lost to Skyhook from the sale to Massachusetts consumers of XPS-enabled Motorola and Samsung Android devices, that factor alone does not suffice to bring this dispute within the ambit of c. 93A, particularly in light of the global marketplace for such devices. Compare Yankee Candle Co. v. Bridgewater Candle Co., 107 F. Supp. 2d 82, 88 (D. Mass. 2000) (although plaintiff’s headquarters was in Massachusetts, § 11 requirement not satisfied because alleged deception was “conceived and concocted outside Massachusetts” and was directed at plaintiff’s customers, who were “overwhelmingly . . . persons and entities outside the Commonwealth”), aff’d, 259 F.3d 25, 47-48 (1st Cir. 2001).

On this record, Skyhook’s physical location in Massachusetts was of minimal import. For this reason, if no other, Google was entitled to summary judgment on Skyhook’s c. 93A claim.

Judgment affirmed.