Streamcast, developer of Morpheus, has sued Skype and its founders under U.S. Racketeering law, according to Andy Abramson.

Mr. Wave Theory shares the beginning of the story when Streamcast hired Skype/Kazaa/Fast Track founders Niklas Zennstrom and Janus Friis and then was victimized by them.

TechDirt takes up the history lesson and follows the Streamcast/Kazaa battle after their split.

Now, after eBay has spent an insane $4 billion to buy Skype, Streamcast strikes back with the RICO suit.

Alec Saunder asks the billion dollar question, "The whole suit begs the question - How much, and how carefully, did EBay do their due diligence?".

A lawsuit target with deep pockets like eBay is a slam dunk for Michael Weiss ... assuming the suit has some merit. Not that that's required. Another motivation - Streamcast has been seeking its next round of funding for a legal P2P network. Perhaps the VC reception was so chilly it forced Streamcast to make this desperate play.

Given that Streamcast will settle with RIAA, the $2 billion question is how much of the eBay settlement does RIAA get?

Now let's go Full Circle. Tie this into the rumored eBay Music Store. That's expensive music. Thousand dollar songs, anyone?