HHR New Media, Entertainment and Technology Group

We had recently written about how a dispute over the ownership of certain IP threatened to derail eBay’s proposed sale of Skype.  Reports last week have revealed that Skype and parent eBay Inc. have reached a definitive settlement agreement with Skype’s founders that resolves litigation over the critical GI technology necessary to run Skype and removes the major obstacle that threatened  the $1.9 billion cash deal for Skype.  Under the terms of the settlement, Zennstrom and Friis will join the investor group and in exchange for contributing Joltid’s GI technology, they will receive a 14 percent stake in Skype, effectively regaining part ownership of their creation.  The other investors will hold 56 percent of Skype with eBay to retain the remaining 30 percent.  The deal is expected to close in the fourth quarter of 2009.

News reports in recent weeks have revealed how disputes over the ownership of certain critical IP may derail eBay’s $1.9 billion deal to sell a stake in the well-known internet communications company Skype.  In the latest development companies owned by the founders of Skype filed additional lawsuits last week against eBay and its future investors. At the heart of the dispute is the peer-to-peer technology called “global index” (“GI”) that is critical to Skype’s success.  Somewhat surprisingly, the GI technology, which was developed by Skype’s founders, Janus Friis and Niklas Zennstrom, is not owned by eBay or Skype.  Rather it is owned by Joltid Ltd., a company controlled by Friis and Zennstrom.  Continue Reading »

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• Late last week,  Judge Louis Stanton of the US District Court for the Southern District of New York ruled that plaintiffs in the high-profile copyright class action case against YouTube could not seek statutory damages for videos that are not registered under US copyright law.   Judge Stanton also dismissed plaintiffs’ punitive damages claim, but did permit claims based on live broadcast footage, which were brought by the English Premier Football League, the lead plaintiff in the case, to proceed.  Continue Reading »

ASCAP is suing AT&T for failure to pay public performance royalties for their sale of musical ringtones. According to ASCAP’s opposition to AT&T’s  recently filed motion, ASCAP rebukes AT&T’s claim that a ringtone is no different than a song downloaded from iTunes and therefore does not require the payment of performance royalties. In response, ASCAP argues that when a ringtone plays to signal an incoming call, the public performance right is triggered in two ways—once when the ringtone is digitally transmitted to the phone (via the streaming transmission/delivery) and again when the song is actually played on the consumer’s phone to the public. According to the filing and a statement released by ASCAP, AT&T, and not the consumer, is then directly liable and responsible for the corresponding public performance royalties because the consumers’ phones are on AT&T’s network, and AT&T controls the entire series of steps that allow and trigger the ringtone performance based on incoming calls. Continue Reading »

UPDATE (4/14/09, 12:14 pm):  The court found the Pirate Bay defendants guilty and sentenced them to 1 year in prison and ordered them to pay $3.6 million in damages to several record labels.

Tomorrow a Swedish court is expected to announce it’s ruling in a criminal case that has been closely watched by nearly everyone with a stake-financial or otherwise-in the free-wheeling world of P2P file swapping.  At its core, the ruling will determine whether the operators of the Pirate Bay, the popular torrent search and indexing site, are guilty of violating Sweden’s copyright law.  A conviction-which many observers expect-could lead to imprisonment and a possible fine, as well as a shut-down of the site.  However, despite the potential immediate impact on the Pirate Bay and its operators, the broader implications of a guilty verdict, including whether or not it will serve as a deterrent against unauthorized file-sharing, are a little less certain. Continue Reading »