Skype Founders Claim eBay No Longer Has A Right To Skype's Core Tech

from the this-is-going-to-get-messy dept

As you know, eBay bought Skype for a ton of money a few years back, without having any real plan for what to do with it. There were no synergies between the two, and about the best that can be said for eBay's ownership of Skype is that they didn't kill it (though, frankly, the new UI is so bad, it makes me wonder what they were thinking) and let it continue to grow organically. Earlier this year, eBay finally announced plans to spin off Skype. Fair enough. It can probably do a lot more outside of eBay than from within. However, it turns out that there may be a bit of a legal hitch, as Skype's founders claim that eBay/Skype no longer have the legal rights to Skype's underlying technology. Apparently, the claim is that Niklas Zennstrom and Janus Friis and a separate company they ran, Joltid, only licensed the underlying technology to eBay/Skype for a limited time -- and that deal has now concluded. The two companies are scheduled to fight this out in court.

There are a few interesting asides to all of this. First, it reminds me of how Zennstrom and Friis ended up in another lawsuit a few years back, also involving questions about licensing the core underlying technology of Skype. There's a lot of background here, and not all the details are clear (at all), but that original case involved the claim that Zennstrom and Friis used the same core underlying technology that they used to build Kazaa to build Skype. Way back, Zennstrom and Friis had created two operations: Kazaa and FastTrack, which created the underlying tech used in Kazaa. However, they also licensed FastTrack to a company called Streamcast, that made a product called Morpheus that competed with Kazaa in the file sharing space. Got that?

The folks at Streamcast insist that part of their contract with FastTrack was that they had a right of first refusal on buying the underlying technology. But then, all sorts of stuff happened, with Kazaa being sold off to a group in the South Pacific, but Zennstrom and Friis supposedly retaining some core technology which (Streamcast claims) they used to build Skype. Then, once Skype sold, Streamcast claimed that the whole thing was an elaborate shell game, but in selling the Skype underlying technology, Streamcast claimed that Zennstrom and Friis violated their agreement on having a right of first refusal on purchasing the technology.

Yet, now I'm left wondering if that original claim was true. If the current claim is that Joltid still "owns" the original technology and Skype/eBay only licensed it, then the technology itself might never have actually been sold (unless, we're talking about two separate core underlying technologies... which is possible).

Still... the bigger question? How the hell did eBay make a deal and not make sure it had either purchased (entirely) the core underlying technology or had a guaranteed perpetual license that couldn't be revoked? The eBay Skype purchase was bad enough already. Could it be even more ridiculous in that eBay didn't even properly purchase the technology in question? It seems preposterous to believe that a company could screw up an acquisition that monumentally, so you have to wonder if it's actually true.

In the meantime, since there are questions about how eBay can rebuild Skype's underlying core technology without violating the many patents in the space, it makes you wonder if eBay may be forced to simply buy someone else's technology. Maybe it's time to call up the Gizmo Project (which has built a very Skype-like product) to see what they're up to these days. Though, can you imagine eBay needing to buy another company just to power Skype so it can be spun off again? Yikes!

Filed Under: ip, janus friis, niklas zennstrom, ownership, skype, voip
Companies: ebay, fasttrack, gizmo, joltid, kazaa, skype

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  1. identicon
    Sean T Henry, 31 Jul 2009 @ 10:17am

    Re: Re: wait

    "...then there is the forced upgrade crap with office apps."

    That is why I use and encourage every one to use its free for everyone including businesses.

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