UPDATE 4-Skype founders sue eBay, investors

Wed Sep 16, 2009 9:13pm EDT
 
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* Founders say eBay, Skype, investors violated copyright

* Lawsuit complicates eBay's $1.9 bln sale of Skype stake

* EBay says deal still on track

* EBay shares dip 1.6 pct after-hours (Adds details on suit in Britain)

By Gabriel Madway

SAN FRANCISCO, Sept 16 (Reuters) - The founders of Skype have sued owner eBay Inc (EBAY.O) and an investor group that has agreed to buy the Webphone service, accusing them of copyright violation and potentially disrupting the $1.9 billion deal.

The lawsuit brought by Joltid Ltd, a Swedish firm owned by Skype founders Niklas Zennstrom and Janus Friis, says Skype used its technology without authorization. It comes on the heels of a legal dispute between Joltid and Skype in Britain over software rights.

Filed in Northern California U.S. District Court this week, the latest suit seeks a permanent injunction against Skype and damages. EBay has denied the allegations.

Joltid believes damages are piling up at a rate of more than $75 million a day.

"The Skype companies have continued to infringe Joltid's copyrighted works on a massive scale," the lawsuit said. "Each day that the Skype Companies continue to make available its Internet telephone software for download, Skype users download Joltid's copyrighted works approximately six times per second."

Ebay licenses peer-to-peer technology from Joltid for Skype, but has begun to develop its own alternative software given the uncertain outcome of pending litigation with Joltid.

"Their allegations and claims are without merit and are founded on fundamental legal and factual errors," eBay said in a statement.

Analysts have said the once-celebrated Skype business is an incongruous division of an Internet sales and auction house, and many have long urged the firm to spin off the unit or unload it.

The Internet auction house said on Wednesday it remained on track to close the Skype transaction in the fourth quarter.

JOOST BUSINESS

Ebay agreed to sell a 65 percent stake in Skype for $1.9 billion to a consortium including Netscape founder Marc Andreessen's Andreessen Horowitz, venture firm Index Ventures, private equity firm Silver Lake, and the Canada Pension Plan Investment Board. [ID:nN01483742]  Continued...

 

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