Skype scuppered?

Free calls could be a thing of the past

Web-enabled phone call service Skype, which allows people to make free voice and video calls through their internet connection, may be axed if its owner eBay loses a legal battle with the firm's founders.

Online auction giant eBay bought Skype for $2.6 billion in 2005. Crucially, the peer-to-peer technology at the heart of Skype's functionality was not included in the deal - Skype founders Niklas Zennström and Janus Friis preferring to hang onto the technology via their new company, Joltid, which then licensed it to Skype.

At issue now is whether eBay has broken its licence agreement with Joltid, given it has conceded in a filing with the US Securities and Exchange Commission (SEC) that it is developing new code.

Joltid argues that modifying code used in the system goes against the agreed terms of the software lease.

eBay has since launched legal action at the UK High Court arguing the software lease cannot be terminated.

In response Joltid has counter-sued threatening to pull out of the licence agreement altogether.

The trial is due to start next year in what may prove to be a major legal bun fight.

However, eBay has said it is "confident" about the outcome but if it lost admitted that ''continued operation of Skype's business as currently conducted would likely not be possible''.

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