Should Skype, the Internet telephone company purchased by eBay in 2005, come out the loser in its growing litigation against Joltid, which licenses critical peer-to-peer communication technology to the company, the “continued operation of Skype’s business as currently conducted would likely not be possible”, according to a filing eBay made with the Securities and Exchange Commission Wednesday.
Joltid, the British Virgin Islands-based company founded in 2001 by the folks behind the music-sharing company Kazaa, claims that Skype has breached the terms of its licensing agreement. “In particular, Joltid has alleged that Skype should not possess, use or modify certain software code and that, by doing so, and by disclosing the Code in certain U.S. patent cases, pursuant to orders from U.S. courts, it has breached the license agreement,” according to a statement from eBay included in the filing.
Skype is asking the English High Court to invalidate Joltid’s claim “on the basis of, among other things, the parties’ mutual dealings” since the licensing agreement was executive. Furthermore, Skype says it lawfully disclosed Joltid’s code in connection with patent litigation in the U.S.