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eBay may be forced to renegotiate Skype deal

Warwick Ashford

eBay's $1.9bn deal to sell Skype to a group of venture capitalists could be derailed by a copyright infringement case filed in a US court.

The firm that owns the peer-to-peer (P2P) technology that is key to the way Skype works, Joltid, has charged eBay and Skype's potential buyers with copyright infringement.

The new case filed this week expands on a similar and still undecided case filed in a UK court earlier this year against eBay before it accepted the venture capitalists' offer to buy Skype.

The deal was agreed after Skype founders Niklas Zennstrom and Janus Friis failed to raise eBay's asking price for buying back the company.

eBay announced Skype was for sale in April, when eBay CEO John Donahoe said Skype was a great stand-alone business with accelerating momentum, but it did not fit with eBay and PayPal.

Joltid, which only licensed its key internet telephony software to eBay when it bought Skype in 2005, alleges that eBay has broken the terms of that licensing agreement.

According to Joltid, Skype modified the source code of its P2P technology without permission and distributed copies to third parties.

If Joltid wins its copyright infringement case, Skype may be forced to stop operating unless it can find a replacement for Joltid's key P2P software, according to the Financial Times.

Software experts have said Skype may struggle to find replacement software that will enable the service to connect more than 16 million people over the internet at peak times each day.

As part-owners of Joltid, this would put Zennstrom and Friis in a very strong position to force eBay to renegotiate a deal for Skype.


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