It is alleged in documents filed at a Texas court on Monday that Microsoft obtained vital information from the British firm, and passed it on to other mobile manufacturers.
"Microsoft used Sendo's knowledge and expertise to its benefit ... and then cut it out of the picture," the court filings allege.
Sendo, a small Birmingham-based firm which makes mobile handsets for network operators, was a key partner in Microsoft's so-called Smartphone project.
The two firms jointly developed the Z-100 Smartphone - a compact handset offering PC-style capability and multimedia functions - which was to provide Microsoft with a way into the market for next-generation telecommunications.
Break-up
But Sendo abruptly dumped Microsoft as its main software provider last month, just weeks before the Z-100 was due to launch.
Sendo said it had broken up the partnership because Microsoft would not give it access to its source code, making it impossible to tailor the software used in the Z-100.
The company is now working on an alternative version of the Z-100 using Nokia software.
News of Sendo's lawsuit came as Microsoft suffered a setback in a separate court battle against arch-rival Sun Microsystems.
A US court on Monday ordered Microsoft to carry Sun's Java programming language in its Windows operating system, pending the final outcome of the dispute.
Sun is suing Microsoft for allegedly trying to marginalise Java by making a recent version of Windows, used on 90% of the world's personal computers, incompatible with the programming language.