tsk...tsk... not another lawsuit...

Morpheus founders sue eBay, Joost over online phone software

By GARY GENTILE AP Business Writer
Article Launched: 05/23/2007 01:34:42 PM PDT

LOS ANGELES- The firm behind Morpheus online file-sharing software renewed a legal claim Wednesday against eBay Inc. and other defendants in a dispute over technology that makes it easier to place Internet phone calls and watch videos on the Web.

The lawsuit filed by StreamCast Networks Inc. in Los Angeles County Superior Court names as defendants Internet phone service Skype, which is owned by eBay, the streaming TV service Joost and the founders of Kazaa BV.

The lawsuit claims Morpheus had the right of first refusal when the founders of Kazaa sold the company and transferred its peer-to-peer technology, known as FastTrack, to another firm.

The founders later used Fasttrack to create Skype, which was acquired in 2005 by San Jose-based eBay for $2.6 billion.

"But for this act that happened some years ago, we would be Skype," said Daniel Woods, an attorney for Morpheus.

A similar action alleging antitrust violations was dismissed by a federal judge in January.

The Kazaa founders recently created a new company, Joost, an Internet-based TV service.

Joost said the legal claims have no merit. A spokesman for eBay did not immediately return a call seeking comment.

The lawsuit claims Kazaa and others broke their contract with Morpheus by selling the software to others and revoking a license for Morpheus to use it.

The lawsuit claims that when the owners of Kazaa sold the company, they also disabled the FastTrack
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technology then in use by Morpheus, thus funneling Morpheus users to the new company. Morpheus was then forced to develop and implement alternate technology, the lawsuit claims.

The state action alleges breach of contract, violation of California's unfair competition statute and unjust enrichment, among other allegations.

StreamCast is seeking the proceeds from the sale of Skype to eBay as well as an injunction stopping Joost from using the FastTrack technology.










-- Edited by budnonymous at 21:26, 2007-05-23