Morpheus owner sues eBay and Skype for $4 billion

Stan Beer
Wednesday, 24 May 2006 18:33

IT Industry - Strategy

The developer of the Morpheus file-sharing system, StreamCast Networks, has filed a lawsuit claiming more than $4 billion damages against eBay, its internet telephony subsidiary Skype and Skype and Kazaa founders Niklas Zennstrom and Janus Friis, among others. StreamCast alleges in the suit that it was never the given a promised first right of refusal to purchase the FastTrack peer-to-peer file technology that powers Skype.

FastTrack originally powered the Morpheus service and StreamCast claims it has paid for the right to purchase the technology and was involved in its development. Skype was sold to eBay last year for between $2.6 billion and $4.1 billion, depending on whether company hits performance targets.

StreamCast wants to shut down the sale of VoIP services provided by Skype and in the suit claims Xennstrom and Friis ignore an agreement they had with StreamCast, when they sold Kazaa and transferred the FastTrack technology to Skype.

The lawsuit, filed in the US Central District Court of Los Angeles, is the latest in a string of high profile suits which aim to shut down the operations of key parts of some of the biggest technology companies in the US. Two other suits filed this month intend to halt the sale of Apple iPods and stop further development of Microsoft's Windows Vista. All three suits in effect allege misappropriated technology has been used to develop a product.