Skype embroiled in Law Suite

In recent weeks a legal dispute between Skype's former owner and current owners has hit the headlines. Former owners Joltid Ltd have accused the current owners, eBay, of infringing copyright rules with regards to the technology used to run the VoIP service. Joltid have revoked the licence for the software and eBay, who deny they have done anything wrong, are taking the company to court, with the case due to begin in June 2010.

eBay bought Skype in 2005 for around $2.6 billion, which has since gone up to $3.1 billion due to Skype's impressive performance, as set out in the original contract. Since this deal Skype's success has continued on an upward curve. In 2008 Skype's pay-for service, Skype Out, was responsible for almost eight and a half billion calls worldwide. eBay have been looking to sell the company since the beginning of 2009 for an estimated $4 billion. In the deal with Joltid, eBay didn't buy the technology used to run the software but leased it. eBay have revealed how the technology works in some other legal cases and according to Joltid this breaks the rules of their agreement.

So what impact is this dispute likely to have? eBay have admitted that they may have to shut down Skype should they loose the case. This will have a huge impact in the VoIP market, as Skype is the most popular brand within this part of the telecommunications industry. Joltid have expressed an interest in buying Skype back and eBay could be forced to sell it to them if they don't have a licence to use the technology themselves. The company without the use of the technology will certainly not be worth $4 billion. For now they are trying to develop their own alternative technology, but doing this without breaking copyright laws will not be easy. If they manage to do this though, they will be able to use it as they own the Skype brand and there is nothing in their contract with Joltid to say that they can't use it with another piece of software.

This will be an interesting story to watch, and something that could have a huge impact on the VoIP industry, although many experts are expecting that the two parties will come to some sort of agreement.

Andrew Marshall ©

Business VoIP


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