Joost Sues Volpi for Attempting a Web-based Skype network

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Joost Sues Volpi for Attempting a Web-based Skype network

Maybe the end of Skype is not near? The plot thickens as Janus Friis and Niklas Zennstrom, both founders of Joost and Joltid, today announced that they have filed a lawsuit against Mike Volpi, Joost's former president, CEO and chairman. The suit also names his current private equity firm (and Joost investor) Index Ventures. The legal documents say that Volpi obtained confidential information in his role as CEO of Joost about how to circumvent Joltid's intellectual property - the very same intellectual property needed to run Skype.

According to, "The gist of the lawsuit is that Volpi learned how to modify Joltid's proprietary software to run on the web without the aid of peer-to-peer software when he was transitioning Joost from a peer-to-peer service to a web-based Hulu clone. With this knowledge, he was able to pitch a version of Skype that buyers could take over from eBay while side-stepping ongoing litigation."

The lawsuit reads: "A source code version of the GI Software (Global Index Software) is licensed by Joltid to Joost, allowing Joost to be the first company to successfully deliver television and other video content in real-time over a peer-to-peer network. An executable-only object code form of the GI Software was licensed by Joltid to Skype, a well-known Internet-based company that providers users throughout the world with free or low-cost telephone services over the Internet. Skype did not obtain a license to the GI Software source code, however, and the license it did obtain was terminated based on Skype's breaches of the license agreement."

It goes on to say that "Volpi has repeatedly failed to comply with Joost's demands that the return his computer and all Confidential Information he obtained in the soruce of his fiducisary relationship with Joost." Wow, holding onto a corporate computer with trade secrets? Doesn't look good if this in fact true. Volpe apparently began working with Index Ventures back in May to try and acquire Skype, before stepping down from Joost in July.

So the gist of this allegation is that Volpi worked for Joost, attained the "secret P2P sauce" (source code) used in Skype, then approached Index Ventures with this trade secret, (no doubt in exchange for millions of dollars) and then with this "secret P2P sauce" in hand, Index Ventures purchased Skype for $2.75 billion. I knew there was no way someone would waste $2.75 billion without having an ace up their sleeve! We shall see if Index Ventures has a royal flush to beat Joltid's four aces.

The lawsuit is below (ditto Newteevee's thanks to TechCrunch for posting an embeddable version):

For more read Techcrunch and NewTeevee

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2.75 billion to purchase Skype? I definitely think you would have to have an ace up your sleeve to pull out your checkbook and write a check with that many 0's. I'm not sure of too many people who would spend that kind of cash without having a guaranteed profit exceeding or at least matching the cost.

I agree with the above comment. OMG!$2.75 billion is so much. Of course, they'll have to make sure that they'll get something from it that equates or more than they spent. That's a business mind!

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