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September 16, 2009 4:16 PM PDT

Skype founders file copyright suit against Skype

by Michelle Meyers
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Updated at 5:10 p.m. PDT with eBay comment.

Joltid, a peer-to-peer software company established by Skype's founders, filed a copyright suit against Skype Wednesday alleging Joltid's technology is being infringed on by Skype users "in the United States at least 100,000 times each day."

Just the latest in an ongoing license dispute between the popular VoIP service and its developers, the lawsuit, filed in Northern California U.S. District Court, seeks an injunction and damages, which Joltid "reasonably believes are amassing at a rate of $75 million daily," according to the suit.

Also listed as defendants are Skype's current owner eBay, as well as investors in a consortium that earlier this month signed a deal with eBay to acquire a 65 percent stake in Skype, with eBay retaining 35 percent.

"Skype has infringed Joltid's copyrights," a company spokesman said in a statement. "Joltid will vigorously enforce its copyrights and other intellectual property rights in all of the technologies it has innovated."

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

The lawsuit has the potential to at least complicate the ongoing sale of Skype. In the past, however, eBay has said it's working on its own software to replace what it gets from Joltid.

In 2006, eBay bought Skype for $2.6 billion, but co-founders Janus Friis and Niklas Zennstrom retained the rights to Skype's key peer-to-peer technology--Global Index Software--via the Joltid company they formed.

Joltid terminated its license for the software after learning that Skype had allegedly acquired unauthorized versions of the source code, made unauthorized modifications, and disclosed the software to third persons, according to the lawsuit.

The two companies have been involved in a separate lawsuit in the U.K. over that license termination, but the case isn't set to go to trial until June 2010. Referring to that suit, eBay's SEC filing regarding the sale of Skype says "consummation of the deal was subject to 'no settlement of the pending litigation with Joltid Limited having been effected without the consent of the Buyer (subject to certain limitations).'"

The other defendants in the suit filed Wednesday are Silver Lake Partners, Index Ventures Management, Michaelangelo Volpi, Andreessen Horowitz, and the Canada Pension Plan Investment Board. This lawsuit was first reported Wednesday by The Wall Street Journal.

Michelle Meyers is an associate editor who tracks online happenings in media, entertainment, and politics. E-mail Michelle.
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by databrain September 16, 2009 5:03 PM PDT
(sigh) it's just voip!
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by dowell100 September 16, 2009 6:35 PM PDT
Joltid is going to lose this one, I predict. Even if they happen to win, who would ever want to do business with them or license their software? Joltid are vultures circling to see what carnage they can devour. In this case, it looks like they created the carnage in advance and are just trying to double-dip on their sale to eBay.
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by JimPratt3 September 16, 2009 6:42 PM PDT
Oh, I'm sure they are going to make a pack of greedy lawyers very happy with this new law suit!
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by ITcomposer September 16, 2009 9:00 PM PDT
And where's microsoft when u need em, MS needs to buy these fools for a couple million shut them up, and open source the patents, end of story VOIP is like, air, anything to keep us humans from geting the short end of the stick from u know.... THE PHONE COMPANY!
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by Kyanar September 16, 2009 10:12 PM PDT
Microsoft? MICROSOFT? Why the heck would THEY want to buy someone to "shut them up and open source the patents" (whatever that means)?
by maniac42 September 16, 2009 10:37 PM PDT
I get a strong sense that Skype is already circling the drain. Some fairly significant technical issues have gone unresolved for 1-2 years, and this row over technology ownership will just serve to finish it off.
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by Rants&Raves September 17, 2009 1:47 AM PDT
Which technical issues ? I use it from broadband connections to limited wifi connections all the time and it has to be the most reliable technology in the instant communication space out there. Specifics ?
by rjsmyth October 5, 2009 10:00 PM PDT
They don't need to worry about the technical issues, their so low level the lusers wont notice it. See below ;>
(no offence to Rants&Raves)
by bluemist9999 September 17, 2009 6:37 AM PDT
I'm surprised there isn't an open source version of VoIP software. Or, if there is, that it hasn't become much more popular.
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by stuporglue September 17, 2009 7:11 AM PDT
There are several pieces of Open Source VoiP software. What you need to search for is either SIP or h.323 + Open Source.

I use Ekiga on Linux for voice calls (Ekiga + Google Voice + Gizmo5 for free in and outgoing calls). It also does video.

The problem is a user base. None of my friends or family have SIP video software installed, so I can't video chat with them in Ekiga. They all have Skype installed and wouldn't understand or care why I want them to download another piece of software that's "Just like Skype, except Free and free, and uses open standards for the video chatting instead of some closed standard".

If and when Skype dies or goes Real Player (ads/spyware), that's when I'll get everyone I video chat with to switch over...
by askgees September 17, 2009 8:10 AM PDT
There are several pieces of Open Source VoiP software. What you need to search for is either SIP or h.323 + Open Source.

I use Ekiga on Linux for voice calls (Ekiga + Google Voice + Gizmo5 for free in and outgoing calls). It also does video.

The problem is a user base. None of my friends or family have SIP video software installed, so I can't video chat with them in Ekiga. They all have Skype installed and wouldn't understand or care why I want them to download another piece of software that's "Just like Skype, except Free and free, and uses open standards for the video chatting instead of some closed standard".

If and when Skype dies or goes Real Player (ads/spyware), that's when I'll get everyone I video chat with to switch over...

So then basically it's useless. LOL but you can keep your fingers crossed and hope that Skype fails. I seriously doubt it will and you'll still be sitting there using a outdated POS OS and a application no one else does. LOL Maybe you should run out and pick up an Apple.
by askgees September 17, 2009 8:00 AM PDT
The Supreme Court stated last year that these types of suites will no longer be tolerated. This is a waste of the tax payers time and money. It's time to hold these people (the one's that file BS law suites accountable) let them pay the cost of the court, attorneys etc. I look forward to the day when the judge tosses this case.
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by rjsmyth October 5, 2009 10:15 PM PDT
presumably this same attitude will be applied to the RIAA and their ******** suites. Wait ... no this is rl isn't it, bummer
by kirkules September 17, 2009 9:08 AM PDT
If i understand this, these guys made 2.6 mil and they want more? Guess you gotta find a way to catch Bill Gates
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by inachu1 September 17, 2009 10:13 AM PDT
this confuses me greatly.
When you sell your IP,techonolgy/company 100% that means the buyer can do anything they want with it.
So with this suit that appears to me as if I buy a car made by Honda and drive it home then years later THE CEO of Honda can drop by my house and use my car any time they want and if I refuse they can file suit against me.
So excuse me! You sold it then it is no longer yours to argue over and the case is moot!
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