Published: September 16, 2009
SAN FRANCISCO — The founders of Skype are escalating their legal battle with eBay.
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.
Joltid seeks an injunction and statutory damages, which it says could total more than $75 million a day. The lawsuit also names as defendants Silver Lake Partners and its partners in the buyout, Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board.
The Skype founders originally sued eBay in March over the matter in a British court. The case is expected to come to trial next year. EBay has said it is developing a workaround technology in case it loses the lawsuit, although it has said it is confident it will prevail.
Several potential bidders for Skype, including Google, cited wariness about potential liabilities in the Skype case as a reason for backing away from a potential deal, according to a person briefed on the Skype sales process. It is not clear if the latest suit will delay the Skype sale.
“Litigation often will delay a deal, and there is often a lot of pressure on companies to settle litigation in advance of a deal,” said Michael Klausner, a professor at Stanford Law School.
John Pluhowski, an eBay spokesman, said the suit’s allegations “are without merit and are founded on fundamental legal and factual errors.” He added, “We remain on track to close the transaction in the fourth quarter of 2009.”
Mr. Zennstrom did not immediately return a request for comment.
Mr. Zennstrom and Mr. Friis have developed a reputation for litigiousness in some legal circles. They filed three separate lawsuits against Pamela Colburn, an investment banker who represented them in the original sale of Skype, in the United States, the Netherlands and Britain. In May, a British judge dismissed the case and said the two men’s reason for pursuing the matter in his country “remains inexplicable.”
The buyers of Skype have not publicly addressed the founders’ lawsuit against eBay in Britain or their potential legal liability.
A person briefed on the buyers’ due diligence ahead of the deal, but not authorized to speak publicly on the matter, said that the venture capital firms hired a private investigations firm to examine the Skype founders’ business practices. The firm produced a lengthy report that explored the founders’ litigiousness, among other matters, this person said.
A version of this article appeared in print on September 17, 2009, on page B3 of the New York edition.
