Skype files lawsuit against eBay

A company owned by the founders of Skype has filed a copyright
infringement suit against the Internet phone service and parent eBay
Inc. — an action that could crimp eBay’s plans to sell Skype for about
$2 billion to a group of private investors.

Joltid Ltd., owned by Skype founders Janus Friis and Niklas
Zennstrom, filed the suit in the U.S. District Court of Northern
California. The complaint alleges Skype violated an agreement over the
use of critical peer-to-peer communication technology that Skype
licenses from Joltid for use in its software, which routes phone calls
over the Web.

In addition to Skype and eBay, the lawsuit ratchets
up the stakes by also naming as defendants all of the private investors
who have agreed to buy Skype. The group includes Web browser pioneer
and eBay board member Marc Andreessen and former Skype board members
Danny Rimer and Mike Volpi, among others.

Joltid is seeking an
injunction on Skype’s use of the technology as well as damages it
estimates could amount to more than $75 million per day.

and Zennstrom sold Skype to eBay for $2.6 billion in 2005 and left the
company in 2007. Joltid and Skype have since been involved in a
licensing dispute over use of the technology, called global index
software. The latest lawsuit comes about six months after Skype asked
the English High Court of Justice in London to find that Joltid’s
efforts to end their licensing deal were invalid and that Skype was not
breaching their licensing agreement.

In a counterclaim, Joltid
alleged Skype broke their licensing agreement. It has claimed Skype
acquired unauthorized versions of the technology’s source code,
modified it and disclosed the source code to third parties. It
terminated Skype’s license agreement, but says Skype has continued to
use the technology.

A trial on the U.K. claims is currently set for next June.

spokesman Tim Robertson said in a statement Wednesday that the company
will "vigorously enforce its copyrights and other intellectual property
rights in all of the technologies it has innovated."

San Jose,
Calif.-based online marketplace operator EBay has said it is developing
software that may be used to keep running Skype if it can’t resolve the
dispute with Joltid.

In a statement, eBay spokesman John
Pluhowski said that Joltid’s allegations and claims "are without merit"
and are "founded on fundamental legal and factual errors." He added
that eBay is still on track to complete the sale of Skype during the
fourth quarter.

But in a Sept. 1 regulatory filing, eBay has
acknowledged that the transaction’s closing depends upon the investor
group agreeing to the terms of any settlement with Joltid. It also is
contingent upon no change or development taking place that would
materially hurt Skype’s business.

Despite posting strong growth
— Skype’s revenue rose 25 percent to $170 million in the second
quarter — eBay’s history with the company has been rocky. EBay ended
up taking a $900 million write-down on Skype in 2007, basically
acknowledging it had significantly overvalued it.

EBay earlier
this month said that rather than spin off the company through a public
stock offering, it would sell 65 percent of Skype to a group of private
investment funds for $1.9 billion in cash and $125 million to be paid
later. EBay will own the other 35 percent.

Shares of eBay closed earlier up 18 cents at $24.32.



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