The suit accuses Microsoft of using false promises of partnerships to gain access to Sendo's mobile phone expertise.
Sendo formed a partnership with Microsoft in October 1999 to help develop e-mail- and Internet-enabled mobile telephone handsets based on the Microsoft operating system codenamed Stinger for use by cellular carriers worldwide.
That relationship dissolved shortly after mobile phone operator Orange introduced a mobile phone in October that was manufactured by Taiwanese company High Tech Computer and based on Microsoft's Smartphone software instead of Sendo's Z100 mobile phone.
Sendo is alleged that Microsoft developed a "secret plan" to "plunder" Sendo's intellectual property, proprietary hardware expertise and trade secrets and transfer them to low-cost original equipment manufacturers such as High Tech.
The complaint also alleged that Microsoft used Sendo's relationships with carriers such as Orange to establish its own contractual relationships with mobile carriers.
Sendo spokeswoman Marljke Van Hooren said Sendo is "looking into the legal implications" of the Orange/Microsoft relationship, but she declined to provide further details.
Microsoft spokesman Jon Murchinson declined to comment on the Sendo lawsuit because the company was still reviewing the filing. Orange spokeswoman Sally Quigg said her company viewed the lawsuit as a matter between Sendo and Microsoft.
Sendo has alleged that after gaining access to Sendo's intellectual property and hardware, Microsoft drove "Sendo to the brink of bankruptcy". Sendo claimed Microsoft was late in delivering software and did not respond to Sendo's requests to fix software bugs and make changes last spring. Microsoft allegedly also failed to provide $14m in financing, and Sendo had problems raising funds from outside sourcesd.
The suit said that under their agreement, if Sendo filed for bankruptcy, Microsoft would be allowed to obtain a royalty-free licence to use the intellectual property Sendo had developed for its Z100 Smartphone.
Sendo said that around October, Marc Brown, a director of Microsoft's corporate development and strategy group and a Sendo board member, suggested Sendo might consider filing for bankruptcy.
On 28 October, Sendo said Brown resigned from its board, and the next day the company terminated its relationship with Microsoft. Since then, Sendo claimed to have made "repeated requests" to Microsoft to return its intellectual property. Microsoft, Sendo added, has "failed and refused" to return this property, while at the same time forging relationships with mobile phone carriers and handset manufacturers around the world.
Craig Mathias, an analyst at Farpoint Group, said he viewed the dissolution of the Sendo/Microsoft relationship "surprising, because it was a quite innovative product". He added that he had no insight into the allegations Sendo is making in its lawsuit, but he did say that Microsoft is "a corporation that has acted ruthlessly in the past".
Tim Bajarin, an analyst at Creative Strategies, said Microsoft needed partners such as Sendo because it has been unsuccessful in its attempts to make alliances with major mobile phone players such as Nokia and Motorola.
"Microsoft has been running behind" in mobile phone technology, Bajarin said. He added that Microsoft views the Smartphone as a key extension of its products designed to serve enterprise markets and workers "anytime, anywhere".