Skype trade secrets were stolen to help eBay sale, founders claim
The founders of Skype have alleged its trade secrets were stolen to help facilitate its sale by its current owner, eBay, in a move which could scupper the $2-billion deal.
The legal action follows another filed earlier this week by Skype’s founders, Niklas Zennstrom and Janus Friis, accusing eBay and a group of potential investors of technology theft.
The legal action targets Index Ventures and one of its partners, Michelangelo Volpi. Acrimony between Skype’s founders and Volpi, a former high-flyer at Cisco Systems has been building for some time.
Volpi served on Skype’s board and the pair of entrepreneurs recruited him to head another company they founded, the web TV venture Joost.
The founders alleged in Friday’s lawsuit that Volpi misappropriated confidential information as he moved from Joost to Index Ventures, and helped to orchestrate its bid for Skype. “Volpi has maliciously and willfully breached his fiduciary duties,” Zennstrom and Friis said in their complaint.
Volpi was not available for comment, while Index Ventures declined to comment.
The legal action is the latest development in the tortuous four-year relationship between Skype’s founders and chiefs at eBay.
The online auction company bought Skype in 2005 for more than $3,1-billion, but two years later admitted that the purchase had been a bad strategic move and wrote down about $1,43-billion of its investment in Skype. eBay had hoped to use Skype’s technology to increase sales of its auction business by enabling buyers and sellers in its online marketplace to talk to one another. But this failed to materialise.
Equally as serious, eBay failed to buy the core technology for Skype when it purchased the company, licensing it from Joltid, the founders’ company, instead. Last month eBay said a legal dispute over its use could see the phone service close.
The peer-to-peer technology that is used to deliver video and phone services over the internet is now at the heart of the legal war.
Joltid sued eBay and the investor consortium earlier this week, claiming that Skype was using this proprietary technology without authorisation. Joltid and Skype have also been in a legal battle in Britain over rights to the technology.
There are suggestions that Zennstrom and Friis had previously contacted several private equity firms to try to buy back Skype.
However, eBay agreed to sell a 65% stake in Skype to the consortium including Index, private equity firm Silver Lake, Netscape founder Marc Andreessen’s Andreessen Horowitz and the Canada Pension Plan Investment Board.
The lawsuit said Volpi’s knowledge of the confidential information had played a key role in the consortium’s bid.
“Volpi and Index lacked the credibility and financial heft to lead a private equity investment consortium to acquire Skype unless and until they advertised their knowledge of the confidential information,” it said.
Volpi was once regarded as a potential chief executive candidate at Cisco, and many in Silicon Valley had looked on with worry at his tenure at Joost since June 2007.
Although the company was a pioneer in bringing popular TV shows and movies to the internet, it struggled to tie key programming deals and find revenue.
He stepped down from his CEO role in late June, while the company cut jobs and scaled back its services.
He initially stayed on as chairperson, but was removed from that role days ago and Joost had said it was investigating his actions. - guardian.co.uk