Skype founders file injunction to halt deal

Matt Bowman · October 15, 2009 · Short URL:

Friis and Zennstrom claim former Joost CEO's misdeeds should stall the $2B sale of Skype

 Joost N.V. and JoltID Ltd., two companies owned by the founders of Skype, have filed a motion for a preliminary injunction to prevent eBay's $2 billion sale of Skype to an investor group.

In a lawsuit filed in September, Skype founders Niklas Zennstrom and Janus Friis claim that Index Venture's Mike Volpi, part of the investor group trying to buy Skype, violated an IP agreement and used information he gained as CEO of Joost to unfairly position the group in its acquisition bid. This followed an earlier suit filed by the duo in July against Skype for violating a licensing agreement.

Volpi is one of the key architects of the Skype buyout bid that includes investors from Andreessen Horowitz, Silver Lake Partners, Canada's Pension Plan Investment Board and Volpi's own London-based Index Ventures. He served on Skype's board before its founders recruited him to head up Joost. In June, Volpi stepped down as Joost CEO and began working on the Skype  deal.

The most recent lawsuit alleges that Skype breached a license agreement for the P2P software code that lies at the heart of Joost and Skype. The code is owned by JoltId, which is controlled by Zennstrom and Friis, who claim in the filings that "an executable-only object code form of the GI Software was licensed by Joltid to Skype, a well-known Internet-based company that provides users throughout the world with free or low-cost telephone services over the Internet. Skype did not obtain a license to the GI Software source code, however, and the license it did obtain was terminated based on Skype’s breaches of the license agreement."

Zennstrom and Friis have asked the U.S. District Court in Delaware to hear the case for a preliminary injunction on Nov. 2, and are asking the court to stop Volpi and Index Ventures from participating in the buyout deal and Skype's strategic planning until the case is resolved.

In the meantime, the Skype / Joltid / Joost founders (who also created early peer-to-peer music sharing service Kazaa) have started another music company, Rdio. Still in its early stages and rather secretive, the company plans to launch a music subscription service early next year.

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