Morpheus Gives Red Pill To eBay

    May 24, 2006
    WebProNews Staff

The company behind the Morpheus file sharing software, StreamCast Networks, updated a lawsuit against Skype’s founders and added eBay to the list of defendants.

"Have you ever had a dream, Neo, that you were so sure was real? What if you were unable to wake from that dream? How would you know the difference between the dream world and the real world?"
-- Morpheus, The Matrix

Twenty-two defendants including online auctioneer eBay have been named in StreamCast’s action against the original Kazaa co-founders, Niklas Zennstrom and Janus Friis. The duo also founded Skype, which they sold to eBay in 2005. Now they have been accused of a plot to steal away StreamCast’s right to match offers for the technology by selling it to companies they secretly controlled.

StreamCast described the actions of Skype’s/Kazaa’s founders and the other defendants (but not eBay) as an “elaborate over-seas shell game” focused on stealing and profiting from StreamCast’s FastTrack technology. FastTrack had been the component in Morpheus that enabled peer-to-peer connections to take place.

FastTrack allegedly made its way into the Skype VoIP software, according to the complaint. StreamCast claims it had the first right to acquire FastTrack and other assets, but through the transfer of the technology to various holding companies set up by Skype’s founders, they were able to take the technology and the Morpheus userbase away from StreamCast.

“We are taking action because we believe the rights to the Skype and FastTrack technologies were swept out from under our feet, and our 28 million Morpheus users were stolen from us,” said Michael Weiss, CEO for StreamCast Networks. “The real story needs to be told.”

The company also suggested eBay did not do enough to determine that Zennstrom and Friis had been involved with Kazaa and Sharman Networks of Australia, Kazaa’s distributor. Also, they said eBay should have known that StreamCast had ownership rights to the technology, though Skype’s founder said otherwise.

StreamCast asked for actual and punitive damages of at least $16.4 billion, an injunction against Skype, and a jury trial.

"Welcome to the real world."
-- Morpheus, The Matrix

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David Utter is a staff writer for WebProNews covering technology and business.