Skype Sued Over Technology

The firm behind the Morpheus online file-swapping software is suing EBay Inc. and 21 other defendants in a dispute over the right to technology used to make telephone calls over the Internet.

The federal lawsuit filed by Los Angeles-based StreamCast Networks Inc. also names as defendants Internet phone service provider Skype and the founders of Kazaa, who the suit claims developed the technology that led to the online phone service.

StreamCast claims it had the right of first refusal when the founders of Kazaa sold the company and transferred its phone technology to another firm.

Skype was acquired last year by San Jose-based EBay for $2.6 billion.

On Monday, StreamCast filed an amended complaint in U.S. District Court that included EBay and seeks $4.1 billion in unspecified damages and a court order blocking EBay from selling Skype services.

“Defendants have orchestrated an elaborate overseas shell game in an attempt to steal and wrongfully profit from technology that rightfully belongs to StreamCast, and which the defendants have used and are using to their advantage,” the lawsuit states.

An EBay spokeswoman declined to comment on the suit.