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 »