StreamCast sues eBay over Skype 'conspiracy'

StreamCast Networks has accused eBay of a "conspiracy" in its purchase of Skype

StreamCast Networks, the distributor of peer-to-peer software Morpheus, has filed a lawsuit against eBay and 21 other defendants, alleging that the acquisition of Skype was accompanied by a "conspiracy" that cost StreamCast billions of dollars.

The company is seeking a worldwide injunction on the sale and marketing of eBay's Skype internet voice communication products as well as billions of dollars in unspecified damages.

The lawsuit, first filed earlier this year, was amended in a filing with the Federal Court in the Central District of California in Los Angeles.

The suit alleges that Skype makes use of proprietary technologies owned by StreamCast in its underlying infrastructure.

"We are taking action because we believe the rights to the Skype and FastTrack technologies were swept out from under our feet, and our 28 million Morpheus users were stolen from us," said Michael Weiss, chief executive at StreamCast. "The real story needs to be told."

The suit further alleges that the original Kazaa co-founders, Niklas Zennström and Janus Friis, profited handsomely from the sale of Skype to eBay only after they and others "engaged in a conspiracy".

This alleged plot saw the executives misappropriate assets and the customer base that belonged to StreamCast. They are also accused of illegally and secretly transferring away the rights to the FastTrack technology.

According to StreamCast, Morpheus and its 28 million users were somehow knocked off the FastTrack network.

"The complaint alleges that many of the defendants engaged in a conspiracy and shut Morpheus out of the FastTrack P2P market and failed to honour an agreement with StreamCast that it had the right to acquire the FastTrack technology and other assets," said Matthew A. Neco, general counsel for StreamCast.

Dan Woods, outside counsel at global law firm White & Case, added: "The sale of Skype to eBay was made possible through a scheme by many of the defendants to misappropriate the FastTrack peer-to-peer technology that rightfully belongs to StreamCast. We have now added eBay as a defendant to this lawsuit."