Technology license dispute may close down Skype

Skype, the internet telephone service company owned by US-based online auction company eBay, has filed a case in the UK court to resolve a dispute regarding its peer-to-peer (P2P) telephony technology with Joltid Limited, a company run by Skype's founders.

San Jose, California-based eBay is asking the English High Court of Justice in London, to find that Joltid's efforts to terminate the agreement are invalid and that Skype is not in breach of the licensing agreement.

The licensing agreement dispute was previously disclosed by eBay in its most recent 20 February annual report. The report states that Skype terminated a ''standstill'' agreement, allowing either party to take action against the other beginning in March.

Joltid is attempting to terminate the agreement based on allegations that Skype has breached its terms. Skype said that it strongly refutes those allegations and is confident of its legal position.

Skype currently uses Global Index technology from Joltid to make its P2P connections on the back-end and, without this technology, Skype would just become a shell without the software engine to drive it.

Joltid is a company owned by one of the Skype's founders Niklas Zennstrom, which has licensed the Global Index technology to Skype. When Zennstrom sold Skype to eBay for $2.6 billion in September 2005, he retained the licensing rights to the Global Index technology through his company Joltid.