Judge Dismisses Legal Fight over Skype's VoIP Technology

A federal judge has thrown out an antitrust lawsuit filed by the distributor of Morpheus file-sharing software against Internet phone service provider Skype Technologies SA, eBay Inc. and other defendants.

StreamCast Networks Inc. had sought more than $4.1 billion in unspecified damages and a court order blocking eBay from selling Skype services. StreamCast claimed the founders of Skype broke an agreement to give StreamCast the right of first refusal for the technology behind Skype's Voice over Internet Protocol, or VoIP, service.

In her ruling Thursday on a motion for dismissal, U.S. District Court Judge Florence-Marie Cooper concluded that StreamCast failed to make its case for relief under federal antitrust laws and dismissed all claims against Skype, eBay and more than a dozen other defendants.

Cooper declined to exercise discretionary jurisdiction to consider state law claims such as unfair competition and fraudulent transfer.

Matthew A. Neco, StreamCast's general counsel, said the company will either appeal the ruling or seek to pursue claims in state court.

"This case is far from over," Neco said.

A call to eBay was not immediately returned.

In the lawsuit, StreamCast alleged that Skype's founders -- who also developed the Kazaa online file-swapping software -- took the phone technology with them after they sold Kazaa to another company and went on to wrongfully profit from its use.

Luxembourg-based Skype was acquired in 2005 by San Jose-based eBay for $2.6 billion.