An appeals court this week put the brakes on an FBI surveillance technique that turns an automobile driver's on-board vehicle navigation system into a covert eavesdropping device, after finding that the spying effectively disables the system's emergency and roadside assistance features.

The case arose from a 2001 FBI surveillance operation in Las Vegas, in which agents obtained a court order compelling a telematics company to secretly activate the stolen vehicle recovery feature in a customer's car. The feature, designed to listen-in on car thieves as they cruise around in a stolen auto, turns on a dashboard microphone and pipes conversations out over a cellphone connection -- normally to the company's response center, but in this case to an FBI listening post.

After initially complying for 30 days, the company asked a federal judge to block the order. It lost, and filed the appeal with 9th U.S. Circuit Court of Appeals while complying with the order. The proceeding were handled in strict secrecy, and the text of the final ruling omits the name of the company. Geri Lama, a spokesperson for General Motors subsidiary OnStar, says it wasn't them.

Court records strongly point to OnStar's Texas-based competitor ATX Technologies, which makes the "Tele Aid" systems used in Mercedes vehicles: the description fits the Tele Aid systems, and the Dallas-based attorney listed as arguing the appeal is also representing ATX in unrelated civil litigation in Texas. ATX spokesman Gary Wallace said he couldn't immediately comment.