Skype Founders Sue eBay: What's Going On?

The founders of Skype are suing eBay for copyright infringement, a move that could block eBay's deal to sell a majority stake in Skype to a group of private investors for $1.9 billion.

eBay purchased Skype back in 2005 for $2.6 billion, but failed to acquire Joltid, the company supplying the core technology behind Skype, also owned by the founders of the VoIP software. The sale was seen as a big failure because the company was not able to further monetize the potential of the VoIP service in the years to come.

So eBay sold a 65 percent stake in Skype two weeks ago to an investment group for $1.9 billion, managing to get back some of the money it invested initially. But it's not all good for Skype, as Skype's original founders are now suing eBay, seeking damages for copyright infringement.

At the core of the suit is a peer-to-peer technology called "global index," which is used by Skype's software to route calls over the Internet instead of traditional phones lines. This technology is owned by Joltid, which is still owned by the founders of Skype.

As if it wasn't complicated enough, eBay licensed "global index" from Joltid for continued use in Skype, but Joltid terminated the license in March and have been battling eBay in U.K. courts ever since.

Now moving to the U.S. courts, Joltid is seeking an injunction against Skype, which could affect Skype's operation. The trial could jeopardize closing of the Skype sale to the private investors, who are also named as defendants by Joltid.

While eBay is working on its own technology to replace Joltid's, Skype could be forced to close down its operation if Joltid wins the trial. What's even more ironic is that that the money Joltid is using to sue eBay is probably the money they got from eBay when they sold Skype.

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