Deja Vu: Skype Founders and eBay in Legal Spat
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eBay and the investment group that inked a deal to buy its Skype unit are facing a lawsuit, with the Internet phone service's founders charging that eBay and Skype's buyers are violating copyright law.
Niklas Zennstrom and Janus Friis, who sold Skype to eBay (NASDAQ: EBAY) in 2005 for $2.6 billion under the terms of a licensing deal that's already being disputed in another court case, yesterday filed a copyright lawsuit in the U.S. District Court of Northern California.
The suit comes on the heels eBay's plan to sell a majority stake in Skype for $1.9 billion to a group of investors led by the private equity firm Silver Lake Partners.
In their suit, the company Joltid -- backed by Zennstrom and Friis -- charges eBay with violation its copyright for altering and sharing the peer-to-peer source code that's at the foundation of Skype's VoIP technology.
When eBay bought Skype in 2005, Zennstrom and Friis retained ownership of the peer-to-peer code but licensed it to eBay.
"Joltid terminated its license agreement with Skype as a result of breaches by Skype," a Joltid spokesman told InternetNews.com in an e-mail. "Skype has infringed Joltids copyrights. Joltid will vigorously enforce its copyrights and other intellectual property rights in all of the technologies it has innovated."
According to the lawsuit, Joltid believes its copyrighted software "is being infringed by those who download and use Skype in the United States at least 100,000 times a day."
Joltid in the suit is seeking an injunction and damages, "which Joltid reasonably believes are amassing at a rate of more than $75 million daily."
The lawsuit also names as defendants Silver Lake Partners and its partners in the buyout, Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board.
This is not the first court battle between eBay and Joltid. The two entities are locked in a legal tussle in a British court over a dispute involving ownership of the same peer-to-peer technology that's also at the heart of this week's lawsuit in the U.S.
In the UK dispute with Skype, Joltid is attempting to terminate the licensing agreement, saying Skype breached its contract by using parts of the code it did not license.
Skype later filed a suit against Joltid to try to resolve the matter, while Joltid has thus far stuck to its position that it holds the rights to the peer-to-peer technology and that Skype is in violation of the original agreement.
The next hearing in that case is slated for a June 2010 in a British court.
eBay spokespeople did not return calls seeking comment by press time.