Alphabet has reportedly lost a crucial Project Loon patent that was important to its continued advancement. After claims from a company called Space Data that it came up with the idea of distributing internet to remote parts of the world using balloons before Google's X Division, the United States Patent And Trademark Office has cancelled the patent related to the directional change of the balloons based on adjusting its altitude, and the patent is now legally owned by Space Data.
Alphabet losing this crucial patent would be bad enough for the future of Project Loon, as the technology is said to have heavily relied on it, but Space Data isn't stopping with gaining rights to the patent. It's also taking Alphabet to court over the matter which puts Alphabet in the unique position of appearing to be a company which patented technology that may have belong to another company. This all comes at a time when Alphabet's self-driving car company Waymo is locked in court battles with Uber over a very similar situation, where Waymo alleges that Uber stole trade secrets pertaining to Waymo's LiDAR technology to use for its own self-driving car efforts. Essentially this couldn't come at a worse time for Alphabet.
According to Space Data, it approached Google in 2007 about potentially investing in its own balloon-based internet delivery project, which reportedly led to a team of Google employees including Sergey Brin visiting its facilities in 2008. Following shortly after the visit, Google stopped talks of a potential acquisition or investment, and eventually in 2012 began filing patents for Project Loon. While Alphabet has stated that it believes Space Data's claims have "no merit" and that it will be "vigorously defending itself" in the case, Space Data has already gained victory in a proposed motion that will require Alphabet to share technical data pertaining to Project Loon so it can analyze it and see where their patents might have been infringed upon. It could also file a preliminary injunction in the near future, though so far nothing of the sort has been initiated. That being said an injunction in the near future could be highly likely as a trial for this case isn't set to take place until 2019, and the injunction could help Space Data until the trial begins.