By Scott Graham, From The Recorder

A suit over Google’s Project Loon, which provides wireless communication by high-altitude balloon, could send U.S. patent law to the stratosphere.

Chandler, Arizona-based Space Data Corp. sued Google Inc., its parent company Alphabet and its moon shot subsidiary X on Monday, saying they’ve stolen Space Data’s method of flying radio-equipped balloons at the edge of space.

Backed by lawyers at Pillsbury Winthrop Shaw Pittman, Space Data accuses Google co-founders Larry Page and Sergey Brin of personally taking part in a 2007 visit to Space Data headquarters at which Google executives allegedly misappropriated Space Data’s trade secrets.

The company also alleges that Project Loon infringes Space Data’s patents on “a free floating constellation communications system.” Space Data says the patented technology is currently being used by the U.S. Marine Corps and Army, among others.

Google did not immediately respond Tuesday to an email inquiry with its press department.

Both systems’ balloons travel at an altitude of 60,000 to 100,000 feet, beyond the range of commercial aviation. One novel issue the suit could pose is whether they are used “in the United States,” as is necessary to trigger U.S. patent law.

Ryan Abbott, a professor of law and health sciences at University of Surrey School of Law in England, said the traditional legal rule covers “up to the heavens and down to earth.” But if the balloons are manufactured and launched outside the U.S., he could imagine a court questioning whether a “use is occurring in the United States.” That argument might be harder to make when the balloons are beaming down signals that help U.S. consumers connect to the internet, he added.

Google launched Project Loon in 2011. To date the focus has been providing internet connectivity in countries such as New Zealand and Indonesia. More recently the company has been negotiating with the Federal Communications Commissio to test its system over the United States.

Space Data says it came up with idea some 20 years ago. CEO Jerry Knoblach patented the idea of “stratospheric balloon-based transceivers” that communicate with wireless devices on the ground. The company negotiated to sell part or all of itself to Google in 2007. Brin and Page were among 11 to 13 Google executives who flew to the Space Data facility, where they participated in balloon launches and learned confidential information about the company under a non-disclosure agreement, according to the complaint signed by Pillsbury partner Colin Kemp.

In particular, Space Data disclosed data on stratospheric wind patterns gathered through “the hundreds of thousands of flight hours of its various balloon-borne platforms,” Kemp wrote. That data is crucial to positioning the balloons, which are steered across the sky via their placement in wind currents that prevail at certain altitudes.

Google tabled discussions about a purchase of the company, “ostensibly because Space Data had communicated with The Wall Street Journal about Google’s interest in Space Data, Kemp writes.

In a 2014 interview, Page said Google had been thinking about launching balloons for “five years or more,” Kemp alleges. By controlling the altitude of the balloons, Google had solved the wind challenges and was prepared to build “a worldwide mesh of these balloons over the whole planet.”

“This concept of ‘if you control the altitude you can actually control roughly where they go’ was something Space Data demonstrated in February 2008 to Larry Page personally,” Kemp writes.

The complaint invokes both the new federal Defend Trade Secrets Act and California trade secret law. Space Data is asking for damages, including punitive damages, and an injunction.

For more on this story go to:  http://www.therecorder.com/id=1202760086978/Up-Up-and-Away-Google-Gets-Sued-Over-Trade-Secrets#ixzz4Bg0Dwf1r