LONDON--Skyhook Wireless, whose technology uses Wi-Fi signals to pinpoint a mobile phone's location, is in something of a tight spot. On the one hand, it's embroiled in a major lawsuit against Google, and on the other, Apple stopped using its services beginning with the iPhone 4.

In other words, the two biggest rising powers in the mobile market are not exactly on the Boston company's side. So perhaps it's a bit surprising that Chief Executive Ted Morgan is as optimistic as he is.

The way Morgan sees it, though, there's plenty of room for growth as more and more devices need to know where in the world they are--cameras, e-book readers, cars, and more. And, should Boston-based Skyhook be squeezed out of the location services market, the company has a strong patent portfolio that's worth a lot of money one way or another, he argues.

Skyhook Wireless CEO and founder Ted Morgan

"Three or four years from now, every mobile device will have Wi-Fi mobile technology," Morgan said in an interview here at the Open Mobile Summit. "We want to be a technology company, but patents are a way to fight off the big guys."

They don't get much bigger than Google, whose Android operating system now rivals Apple's iOS for the high-end smartphones that are taking over the mobile market. Google provides its own location services, which can be used, for example, to power Android's car navigation app, localize search results, and mix an ad for a hotel into a map search.

Fighting with Google Skyhook, a 30-person company, sued Google for patent infringement and interfering with its contracts. The case is now in the discovery phase in which the companies delve into evidence from each other. The act that triggered the lawsuit, Morgan said, took place after Skyhook won a place in Android phones from Motorola and Samsung.

"We were about to sign LG Electronics, and that's when Google fought back," realizing it would be reliant on another company for technology needed to deliver local ads and perform other essential, valuable chores, Morgan said. "They overreacted and broke the law."

Why would a device maker pay to put Skyhook technology on an Android phone if Google provides the service for free "Because ours is better," Morgan said. He considers Skyhook two years ahead of the competition. Samsung took 1,000 test drives around the world with using both both approaches and compared the results, and opted for Skyhook's paid service.

Just how Skyhook will fare in court remains to be seen, but the first round didn't go very well for the company. It sought a preliminary injunction against Google to bar it from stopping phone makers from excluding Skyhook's technology, but the court rejected that request in December:

Skyhook's theory, with respect to Motorola and [unnamed] company X, appears to be that Google's market power is such that it could, and did, dissuade these manufacturers from using XPS [Skyhook's location technology] merely by raising questions about compatibility. The theory is not entirely implausible. On the record presently presented, however, the court cannot conclude that Skyhook is likely to prevail at trial on that theory.

And regarding the matter of interfering with Skyhook contracts, the court was equally unmoved: "As the record stands thus far, in the court's view, the plaintiff's showing is not strong."

The patent infringement aspect of the suit is another matter, though, and that's still undecided.

"We filed 60 patents. We have 20 granted," Morgan said. They cover matters such as the algorithms used to evaluate Wi-Fi signals' usefulness in determining location and in dealing with errors, he said.

Brighter spots The Google fight is a low point of Skyhook's existence. Turner likes to look at the ups as well as the downs.

Apple's case is very different from Google's. Apple, unlike Google, makes its own hardware, and its iPhone, iPhone 3G, and iPhone 3GS used Skyhook's services. After that, Apple started using its own location technology.

But Apple at least so far is still amicable--and more. Morgan wouldn't share specifics, but indicated Apple's relationship with Skyhook has continued even though it's moved to its own technology. It's not great that the company stopped using Skyhook's technology in iOS devices, but the business relationship remains "financially enriching."

To reach further, Skyhook aggressively courts developers writing location-related apps. Among those that have embedded Skyhook's services are MapQuest, Priceline, CitySearch, and an unnamed dating site to be revealed soon.

Morgan is interested in new mobile-phone deals. But he's got his eye on other markets, too.

Currently, 100 million devices use Skyhook technology. Morgan looks at a larger market of 2 billion.

That includes e-readers and digital cameras. For the latter, Morgan has been disappointed at how slowly the industry has been to respond to the idea of geotagging photos, as iPhones and other location-aware smartphones can. He believes the market will come around to Wi-Fi-based location services, though, particularly as they realize GPS is a sluggish and battery-consuming technology.

Car navigation has been a hard nut to crack. The sat-nav industry has years of experience with GPS, and devices can take advantage of the fact that cars are confined to road locations. Built-in sat-nav systems also are tied into wheel rotation and steering information so dead-reckoning data can update location data.

Ultimately, Morgan believes customers will come around to Skyhook based on its technology.

New plans Using anywhere between 100 to 500 temporary workers driving the roads, Skyhook regularly gathers information about wireless devices--identifiers called MAC addresses and their signal strength. This information is stored in a Skyhook database that's delivered in batches to mobile phones or other Skyhook-enabled devices as a person moves to new areas.

The database is constantly updated with new information from mobile phones equipped with Skyhook's software, for example confirming existing Wi-Fi access points and noticing when earlier ones have moved.

Morgan prides himself on how well the system works. One advantage he thinks Skyhook has is dealing with very mobile access points: phones used with tethering technology that makes them into a miniature access point, and devices such as Mi-Fi's miniature mobile routers. "Tethering is a huge problem for location data," he said.

Lesser methods can't handle Mi-Fi devices. If one gets registered in a location database at a certain site, the service will tell people near that Mi-Fi point they're at that original site even if the Mi-Fi access point is moved. Not so Skyhook, he said, which has a detailed map of the names and MAC addresses of the devices.

The company also uses a hybrid of GPS and Wi-Fi data, an approach first used in the MapQuest app. It takes four GPS satellites to get a good location fix, but even just two can help narrow down location when a person is located between two clusters of Wi-Fi signals.

And there's a new service under way that Morgan is excited about. In it, a person with a good location fix can help out a person nearby with a worse fix. When each checks in to the Skyhook server, it figures out that they're near each other, and the good location data can be shared--anonymously--with the other person.

Also useful: data from gyroscopes on newer phones and devices. That helps determine a person's direction and velocity, which is useful data especially in navigation apps.

Nobody doubts location is getting more important as smartphones get smarter and more pervasive and as the virtual world of the Internet links with the physical world we live in. Skyhook just has to convince the customers that the technology is worth paying for.