Skype Wins $4.1 Billion Suit

VoIP software giant, Skype has won the lawsuit filed by the distributor of Morpheus file-sharing software, StreamCast Networks Inc. The company had sought more than $4.1 billion in unspecified damages, against Skype, parent company eBay and other defendants and had requested a court order, blocking eBay from selling Skype services. StreamCast had claimed that the founders of Skype broke an agreement to give StreamCast the right of first refusal for the technology behind Skype's VoIP service.

A U.S. District Court Judge concluded that StreamCast failed to make its case for relief under federal antitrust laws and dismissed all claims against Skype, eBay and more than a dozen other defendants. The judge declined to exercise discretionary jurisdiction to consider state law claims such as unfair competition and fraudulent transfer.

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However, Matthew A. Neco, StreamCast's general counsel, said the company will either appeal the ruling or seek to pursue claims in state court. In the lawsuit, StreamCast had alleged that Skype's founders, who also developed the Kazaa online file-swapping software, took the phone technology with them after they sold Kazaa to another company and went on to wrongfully profit from its use. Luxembourg-based Skype was acquired in 2005 by San Jose-based eBay for $2.6 billion.

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