06/11/2009 - Skype obtains anti-suit injunction against Joltid

Mr Justice Lewison has today granted a final anti-suit injunction against Joltid Limited, requiring it to discontinue its proceedings against Skype Technologies SA ("Skype") in the United States District Court for the Northern District of California.

Skype's application for an anti-suit injunction arose in the context of a long-running dispute with Joltid over the licensing of certain software which is fundamental to Skype's business. In 2003, Skype and Joltid entered into a Licence Agreement, pursuant to which Joltid granted Skype a worldwide licence to use its software. According to Joltid, Skype acted in breach of the licence by using a different form of Joltid's software and on 12 March 2009, Joltid purported to terminate the Licence Agreement. On the same day, Skype issued proceedings in the High Court seeking a declaration that Joltid's termination was not valid. Skype brought its claim in the High Court in accordance with an exclusive jurisdiction clause contained in the Licence Agreement.

On 1 September 2009, eBay Inc announced its agreement to sell a 65% stake in Skype to a group of investors for $2 billion. On 16 September 2009, Joltid commenced proceedings in the Californian Court against Skype and the investors for copyright infringement.

At the hearing before Mr Justice Lewison, Skype successfully argued that the US proceedings fell within the scope of the exclusive jurisdiction clause in the Licence Agreement, because if Skype was correct and the Licence Agreement continued in force, then Joltid's claims against Skype in the Californian Court would not get off the ground.

Applying Donohue v Armco, Mr Justice Lewison then considered whether there were any strong reasons for refusing to grant an anti-suit injunction. Joltid argued that the Californian Court was the forum conveniens, but it was held that such considerations "should be given little weight in the face of an exclusive jurisdiction clause where the parties have chosen the courts of a neutral territory in the context of an agreement with worldwide application". Moreover, although the US proceedings would continue as against the other defendants, there was merit in ensuring that at least all disputes between Skype and Joltid would be decided in a single forum. Finally, Joltid offered to undertake (i) to be bound by the final decision of the English Courts in the US proceedings and (ii) not to seek any remedy in the US proceedings for any alleged breach of copyright occurring prior to the date on which it claimed that the Licence Agreement was terminated. However, Mr Justice Lewison rejected these proposed undertakings as "no more than an attempt by Joltid to wriggle out of its contract".

By consent, the Court agreed to stay that part of the order compelling Joltid to discontinue the proceedings in the US pending the disposal of Joltid's application for permission to appeal.