eBay sued for using Skype technology by Skype founders

eBay Inc along with a group of investors who are acquiring stake in Skype are sued by the former owners of the Internet phone service. Joltid Ltd, a Swedish firm owned by Skype founders Niklas Zennstrom and Janus Friis, initiated the lawsuit claiming Skype used its technology without authorization. This legal issue comes on the heels of a legal dispute between Joltid and Skype in Britain over software rights.

The litigation was started in the Northern California U.S. District Court this week and seeks a permanent injunction against Skype and damages. Meantime, eBay declined validity of the allegations. Joltid believes damages are piling up at a rate of more than $75 million a day.

"The Skype companies have continued to infringe Joltid's copyrighted works on a massive scale," the lawsuit said. "Each day that the Skype Companies continue to make available its Internet telephone software for download, Skype users download Joltid's copyrighted works approximately six times per second."

Earlier it was reported that eBay decided to sell a 65% stake in Skype for $1.9 billion to a consortium including Netscape founder Marc Andreessen's Andreessen Horowitz, venture firm Index Ventures, private equity firm Silver Lake, and the Canada Pension Plan investment Board. Thus the suit filed by Joltid names those investors along with eBay as defendants.

Wednesday's developments are the latest in an escalating legal tussle. Earlier this year, Skype filed a claim in the United Kingdom against Joltid, trying to resolve a dispute over a software licensing agreement between the parties that Joltid was seeking to terminate.

Joltid brought a counterclaim, reiterating that it holds the rights to the peer-to-peer technology and that Skype is in violation of the original agreement.

A trial is expected to take place in early 2010 in the United Kingdom.