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Skype's Founders File Copyright Lawsuit Against eBay

   
2:42 am on Sep 17, 2009 (gmt 0)

WebmasterWorld Senior Member 5+ Year Member



You knew this one was finally coming, when eBay bought skype for 2.8 billion they didn't buy rights to the software that drives it. Since they've made it available for download and revealed the source to app developers they got sued.

[latimes.com...]

2:44 am on Sep 17, 2009 (gmt 0)

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Silver Lake, Andreessen Horowitz LLC, Canada Pension Plan Investment Board and Index Ventures are also all named in the suit.
5:30 pm on Sep 17, 2009 (gmt 0)

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Skype's Founders File Copyright Lawsuit Against eBay [nytimes.com]
Niklas Zennstrom and Janus Friis, who became billionaires after selling Skype to eBay in 2005, filed a copyright lawsuit on Wednesday against Skype in the United States District Court of Northern California. The suit comes a little more than two weeks after eBay announced it would sell most of Skype for $1.9 billion to a consortium of investors led by the private equity firm Silver Lake Partners.

In the court filing, Joltid, a company owned by the Skype founders, claims that eBay violated copyright law by altering and sharing the peer-to-peer source code behind the free Internet calling service. The Skype founders maintained ownership of that source code after selling Skype to eBay in 2005, and licensed it to eBay.

Earlier stories

eBay Announces Skype Sale [webmasterworld.com]

[edited by: tedster at 1:02 am (utc) on Sep. 18, 2009]

6:43 pm on Sep 17, 2009 (gmt 0)

5+ Year Member



I saw this coming! When will eBay learn?
4:49 am on Sep 18, 2009 (gmt 0)

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Sorry, but ha, ha, ha.
No love for eBay and for them to committ the corporate sin of buying a technology company yet somehow not buying the technology!

I wonder how much this will hurt eBay. There was a discussion a while back about PayPal and a number of people jumped to their defence from the persepctive of being sound and having relocated to Lichtenstein. They did this to capitalize (make money from thin air) as Lichtenstein allowed them to be a bank, which the British FSA would not because, um, they are a credit card processor, nothing more. Lichtenstein also has tight security rules regarding company accounts and disclosures, so no-one knows the true economic state of PayPal. But with all the talk of problems and a more clued up customer base using their credit cards to fund PayPal accounts because they can get their money back from the CC company who in turn get it from PayPal, I wonder if eBay is fearing rather than feeling a recession big time right now!

4:58 am on Sep 18, 2009 (gmt 0)

10+ Year Member



How come Ebay didn't buy the rights to the technology? If they bought the company, shouldn't they get the rights to the technology?

Doesn't make sense...

6:30 am on Sep 18, 2009 (gmt 0)



eBay is run by fools!

The current eBay management consist of a serious bunch of clowns. It is that simple.

[edited by: Web_speed at 6:46 am (utc) on Sep. 18, 2009]

6:44 am on Sep 18, 2009 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



This doesn't make sense at all. You can't buy Skype without buying the rights to the software.
10:28 am on Sep 18, 2009 (gmt 0)

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It's a little bit crazy all this. You'd expect companies to read the small print. A similar thing happened in Italy recently when a provider made available a catalogue of music for download and was then taken to court by a couple of the major labels.
The reason: they hadn't yet been granted the licensing rights, and had already shared the music about.
1:05 pm on Sep 18, 2009 (gmt 0)

5+ Year Member



Web_speed, the CURRENT eBay management? They've been fools from the start. Greedy and stupid as all hell. Seriously eBay would have been smart to make all listing fees 50 cents (more if you upgrade with bold, etc.) with a 1% plus $1 final listing fee, then also encourage PayPal use (as they have been doing). PayPal makes the buying process safer for the buyer and seller and they get their cut too. It's nuts to think eBay is getting 10%+ of transactions when you sell with them currently and it's out of control. As margins gets squeezed more and more will leave eBay.
3:02 pm on Sep 18, 2009 (gmt 0)

WebmasterWorld Administrator bakedjake is a WebmasterWorld Top Contributor of All Time 10+ Year Member



While I hate to disagree with all of the corporate finance experts in the thread, might I suggest that:

A) ebay's lawyers are not stupid
B) this is not small potatoes

There is obviously more to this story.

6:48 pm on Sep 18, 2009 (gmt 0)

5+ Year Member



There is obviously more to this story.

Yes, there should be more to come.
5:09 am on Sep 19, 2009 (gmt 0)

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"this is not small potatoes"

Nope, it totaled eBay's planned sale of Skype!

As for eBay's lawyers not being stupid, the is not is issue and (thank you God for karma) nothing they can do if eBay are not the legal owners of the technology!

eBay's greed was and is (IMHO) their corporate philospohy and hopefully will be their ultimate downfall. I see eBay as a corporate commission earning and condoning pyramid scheme site with fraudulent sellers getting away with murder and new ones coming along because of it. But sooner or later the punters will get wise. My G, you only have to see the difference in quality in listings say 3 years ago with now.

1:25 pm on Sep 19, 2009 (gmt 0)

WebmasterWorld Senior Member trillianjedi is a WebmasterWorld Top Contributor of All Time 10+ Year Member



According to the FT eBay say "no problem".

"Their allegations and claims are without merit and are founded on fundamental legal and factual errors," said Ebay. "We remain on track to close the transaction [for the sale of Skype to the investor group] in the fourth quarter of 2009."

[ft.com...]

There'll be two sides to this story, and we've only heard one so far. eBay may have a few nukes up their sleeves that they're just not ready to launch yet.

If you read the pleadings filed in the US court on this new copyright issue, the arrogance of Friis and Zennstrom beggars belief. (Om Malik publishes here : [gigaom.com...] )

They essentially have no evidence of the mis-appropriation of confidential information, just an assumption that it's the only way Volti could have put together the financial consortium.

Lots of smoke and mirrors here.

6:49 pm on Sep 19, 2009 (gmt 0)

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I agree monaco, ebay has seriously went down the tubes.
7:50 am on Sep 21, 2009 (gmt 0)

WebmasterWorld Senior Member 5+ Year Member



While I don't want to bash any individual I will say one thing about sentiments in this thread about eBay management... Irony!

Former eBay Boss Meg Whitman is currently seeking to replace Arnold Schwarzenegger and run California Next, anti affiliate tax included... which directly affects eBay and its affiliates. Round and round we go!

Actually, I wonder if that's partly why eBay switched to a pseudo cpc payout structure for affiliates, so that they can no longer be considered employees. The system isn't CPC at all however, it's 100% "we'll pay you but can't tell you how we figure out how much".

eBay is definitely on a road of change, time will tell if that's good or bad and this lawsuit will be expensive if nothing else.