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Skype vs. Net2Phone In Patent Quarrel

Net2Phone sued VoIP competitor Skype for stealing ideas, in a U.S. District Court for the District of New Jersey.

Net2Phone considers it pioneered the PC-to-phone calling market, while eBay's Skype built on Net2Phone's patented technology(2000) and then released it under its own brand.

Net2Phone's patent, licensed under "U.S. Patent 6,108,704", describes a method for "talking" between two devices over TCP/IP.

Net2Phone provides low-cost, retail VOIP services. Net2Phone currently routes millions of minutes daily over data networks, leading to an economy of up to 90% over traditional long distance rates.

Through relationships with ISPs, VARs, competitive carriers and other resellers, Net2Phone markets fully integrated VoIP solutions in emerging markets to businesses and consumers, capitalizing on the growth, flexibility and cost advantages of IP-based calling.

Skype is a proprietary peer-to-peer Internet telephony (VoIP) network, founded by Niklas Zennström and Janus Friis, the creators of KaZaA, and competing against established open VoIP protocols like SIP, IAX, or H.323. The Skype Group is headquartered in Luxembourg with offices also in London and Tallinn.

Skype has several features like SkypeOut, SkypeIn, Skype Voicemail, Skype Chat, Skype Video Calling, Skypecasts, Skype SMS, Skype Web Toolbar, and Skype Zones.

The main difference between Skype and other VoIP clients is that it operates on a peer-to-peer model rather than the more traditional server-client model. The Skype user directory is entirely decentralized and distributed among the nodes in the network, which means the network can scale very easily to large sizes (currently just over 100 million users) without a complex and costly centralized infrastructure.

The Skype code is closed source and the protocol is proprietary which has raised suspicion and drawn broad criticism from software developers and the VoIP user communities.

The Skype client's application programming interface (API) exposes the network to software developers. The Skype API allows other programs to use the Skype network to get "white pages" information and manage calls.