What do these three have in common? Sharman Networks’ Kazaa P2P file-sharing service, eBay’s Skype VoIP service and the newly launched Joost Internet TV service? All three are purported to use the FastTrack Internet technology developed by Niklas Zennstrom and Janus Friis, who also founded Kazaa the company which sold the Kazaa the service to Sharman, Skype and Joost. Now, two of the companies, eBay and Joost, are being sued by StreamCast, which claims it owns the rights to FastTrack. Sharman, of course, lost the big law suit brought against it by the record labels, virtually shuttering the place.
StreamCast, whose Morpheus was once the world’s largest P2P service, has added Joost to its year-old suit against eBay and its Skype operation. The suit, which has 21 defendants, is about who owns FastTrack, the Internet networking technology that underlies the Skype VoIP and the Joost Internet video applications.
It seeks a worldwide injunction on the sale and marketing of the Skype Internet voice communication products as well as billions of dollars in unspecified damages.
StreamCast seeks the proceeds from the sale of Skype to eBay plus an injunction to stop Joost from using the FastTrack technology.
It claims that Friis and Zennstrom violated a contract they had with StreamCast by transferring technology rights for FastTrack from StreamCast to Sharman Networks.
eBay bought Skype in 2005 for $2.6 billion. In May 2006 eBay was added to the original suit against Friis, Zennstrom and others. The heavily touted Joost was officially launched May 1 of this year.
The suit, filed in Los Angeles, alleges breach of contract, violation of California’s unfair competition statute and unjust enrichment plus other charges.
StreamCast Networks, nee Music City, was once the biggest P2P Web site of them all – back when it was the exclusive operator of the Morpheus file sharing site that ran on Fast Track. Then it lost the rights to use Fast Track to Australia’s Sharman Networks and developed its own Morpheus P2P software.
“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,” StreamCast CEO Michael Weiss said last year. “The real story needs to be told.”
The suit claims that Zennstrom and Friis, developers of the original Kazaa P2P file sharing software, profited when they sold Skype to eBay. But, StreamCast says that came only after Zennstrom, Friis and others misappropriated assets and a customer base of some 28 million that belonged to StreamCast by illegally and secretly transferring the rights to the FastTrack technology away from StreamCast.
It also claims StreamCast had the right of first refusal when Friis and Zennstrom sold the Kazaa technology to Sharman. “But for this act that happened some years ago, we would be Skype,” said Daniel Woods, an attorney for StreamCast.
The suit alleges that when Friis and Zennstrom sold Kazaa to Sharman, they disabled the FastTrack technology that StreamCast was using and routed its users to Sharman. StreamCast then had to develop alternate technology but never regained access to its customer base, according to the suit.
“The Complaint alleges that many of the defendants engaged in a conspiracy and shut StreamCast out of the FastTrack P2P market and failed to honor an agreement with StreamCast that it had the right to acquire the FastTrack technology and other assets,” said Matthew Neco, general counsel for StreamCast, when the suit was filed.
In January, a federal judge dismissed a similar suit that alleged antitrust violations. Joost said the legal claims have no merit. eBay has not yet commented on the matter.
Note: We have spoken in the past to Nicholas Zennstrom who makes it clear that his services do not use StreamCast, but a re-written P2P client which supports the creation of supernodes, something which Streamcast doesn’t do, and if that’s true, this could be a very short legal action