Intellectual property dispute could close Skype

The popular VoIP telephony service is under threat

EBay may have to replace the technology at the heart of its popular Skype peer-to-peer telephony tool, because of a long running intellectual property dispute with a company run by Skype's founders.

The auction giant said in a regulatory filing with the US Securities and Exchange Commission (SEC) that it filed suit against Joltid in March 2009 in the High Court after the latter laid claim to some of the core Skype technology.

Joltid then "purported to terminate the licence agreement between the parties ", according to eBay, an act which could have forced the company to close the popular Skype service.

"Joltid has brought a counterclaim alleging that Skype has repudiated the licence agreement, infringed Joltid's copyright and misused confidential information," said eBay.

"Although Skype is confident of its legal position, as with any litigation there is the possibility of an adverse result if the matter is not resolved through negotiation. Skype has begun to develop alternative software to that licensed through Joltid."

However, eBay warned that if it loses the case, and its attempts to develop an alternative are unsuccessful, Skype could close.

"Skype would be severely and adversely affected, and the continued operation of Skype's business as currently conducted would likely not be possible," eBay said in the SEC filing.

Rex Parry, partner and head of IT at international law firm Eversheds, argued that the case should be a "wake up call to companies that rely on technology they do not own".

"Companies need to ensure that they have clear rights to technology to ensure the long-term health and sustainability of their business," he said.

"Failure to do so could have very serious implications, and in this case could delay the potential flotation of a business, or worse still, undermine the current systems of the business completely."