EBay settled a copyright lawsuit against Skype today and, oh my god, it turns out it was just filed as leverage in deal negotiations. What has the legal profession come to when lawsuits are no longer filed for the love of the law and actual grievances?
Here’s what happened: eBay was in the midst of selling Skype to some private investors, including Andreeson Horowitz and Silver Lake Partners, because the online auction company actually never figured why in the world it bought the Internet telephone service. Then, the guys who came up with Skype in the first place -- and have since formed a company called Joltid — sued everyone involved in the deal, claiming that Skype didn’t have a license for some of the essential technology and IP. An injunction was threatened. And then today, the folks from Joltid agreed to drop the suit, and in exchange were allowed to buy a 14 percent stake in Skype. As one of the lead investors, Marc Andreeson, told The Wall Street Journal: "There is fighting, and then there is negotiation … We believe it is as a plus to have founders involved. They now have a complete alignment of interest." That about sums it up.
A bunch of local lawyers were involved with the “lawsuit.” Lawrence Hadley of L.A.’s Hennigan Bennett & Dorman represented the jilted at Joltid. Irell & Manella represented Skype. Weil Gotshal’s Matt Powers represented eBay. WilmerHale’s Mark Selwyn from Palo Alto represented investor Silver Lake Partners. Diana Marie Torres of Kirkland & Ellis in L.A. represented Marc Andreeson’s venture fund, Andreeson Horowitz. And O’Melveny & Myers S.F. IP lawyer Darin Snyder had the Canada Pension Plan Investment Board, another investor.
— Zusha Elinson