Blog Post

A Patent Settlement That May Have Paved The Way to Skype's IPO

Say what you may about Skype — the company that now dreams of an IPO — it figures out a way to get itself in legal entanglements. It famously clashed with founders Niklas Zennstrom and Janus Friis over usage of core technologies.  And as per the Skype S-1 today, lately it was involved in a skirmish with IDT Corp and its subsidiary Net2Phone.

The story so far: in 2000, IDT Corp acquired Net2Phone and with it VoIP-related intellectual property. In June 2006, Net2Phone filed a patent infringement lawsuit against Skype in U.S. District Court in New Jersey. In 2008, eBay (then the owner of Skype) sued IDT for patent infringement in the Western District of Arkansas.

Then in June 2010, IDT filed a civil antitrust complaint against Skype. The timing around the last lawsuit should raise some eyebrows. Last week, the parties involved — Skype (and eBay), IDT Telecom, Net2Phone and others settled all differences, including the two patent infringement lawsuits. One can assume that Skype chose to settle given its pending IPO.

Related research from GigaOM PRO (subscription required):