IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELA WARE

JOOST US, INC., a Delaware corporation, JOOST N.V., a Netherlands Antilles corporation, and JOL TID LIMITED, a British Virgin Islands corporation,

Plaintiffs,

v.

C.A. No. 1:09-CV-00708-GMS

MICHELANGELO VOLPI and INDEX VENTURES MANAGEMENT, S.A., a Swiss corporation,

Defendants.

DECLARATION OF JUSTIN ERENKRANTZ IN SUPPORT OF PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

OF COUNSEL:

(admitted pro hac vice)

Thomas J. Nolan

Eric S. Waxman

Lance A. Etcheverry

Allen L. Lanstra, Jr. SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP 300 South Grand A venue Suite 3400

Los Angeles, California 90071-3144 Tel.: (213) 687-5000

Thomas 1. Allingham II (lD No. 476) Thomas.Allingham@skadden.com Stephen D. Dargitz (lD No. 3619) Stephen.Dargitz@skadden.com SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP One Rodney Square

P.O. Box 636

Wilmington, Delaware 19899 Tel: (302) 651-3000

Attorneys for Plaintiffs Joost US, Inc., Joost N.V., and Joltid Limited

DECLARATION OF JUSTIN ERENKRANTZ I, Justin Erenkrantz, do hereby state:

1. I have personal knowledge of the facts stated herein, and confirm and

attest to the contents of this declaration. If called as a witness I would testify competently thereto.

General Background

2. I am presently Chief Architect at Joost US, Inc. ("Joost") and an

engineering consultant to Joltid Limited ("Joltid'').

3. I hold Bachelor of Science (2002), Master of Science (2004) and

Doctorate (2009) degrees in Information and Computer Science from the University of California, Irvine.

4. Immediately prior to joining Joost in January 2007, I served two

internships at Google, Inc. ("Ooogle"), first in the open-source programs office (January - April 2006) and later with the Audio Ads engineering group (July 2006 - January 2007). In or around October 2006, Google offered me a full-time position as a software developer.

Joost's Recruitment Of Me To Work On The Global Index Software

5. In or around October 2006, when I was considering the job offer from

Google, Sander Striker, a senior software engineer at Joost, began recruiting me to join Joost. Mr. Striker suggested that I would be a beneficial addition to an elite engineering team at Joost that was working on confidential developments to the Global Index Software ("01 Software"), which is the peer-to-peer technology that was developed by Janus Friis and Niklas Zennstrom (the founders of Skype, Inc. ("Skype''), Joost and

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Joltid). My understanding is that the Gl Software is owned by Joltid and, pursuant to a license from Joltid to use an executable-only form of the software, allows Skype to provide users throughout the world with free or low-cost telephone services over the Internet. Joost has access to the GI Software and its underlying source code through a license from Joltid.

6. Mr. Striker and I knew each other as a result of our work together for the

Apache Software Foundation ("Apache''), a non-profit organization that provides support for the Apache community of open-source software projects. I have been an active member of Apache since 2001 and currently serve as its President. In October 2006, approximately 15-20 other Joost employees were also members of Apache.

7. Mr. Striker first approached me about joining Joost during a Subversion

developer summit held in October 2006 in the San Francisco Bay Area. After I expressed interest in learning more about Joost's employment opportunities, I signed a nondisclosure agreement with Joost. Thereafter, in December 2006, I traveled to Joost's office in Leiden, The Netherlands to interview with Dirk Willem van Gulik, the Chief Technology Officer of Joost at that time, Martijn Boekhorst, a senior engineer leading the "Anthill" team that worked closely with the GI Software code, and Leo Simons, another Joost engineer who I knew from Apache.

8. Soon after my interviews, I received via email an offer of full-time

employment from Joost, which I accepted in late December 2006. I commenced my employment towards the end of January 2007.

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The Global Index Software And The Anthill Engineering Team At Joost

9. Upon joining Joost, I was assigned to the Anthill engineering team and

reported to Martijn Boekhorst.

10. The Anthill team was a small team of elite engineers who had direct

access to the GI Software and its underlying source code. The goal of the Anthill team's work was to manipulate and transform the GI Software code to allow for video delivery over a peer-to-peer internet network. The Anthill team's operations and activities were highly confidential and team members worked intimately with the GI Software in its source form. With few exceptions, the remainder of the Joost organization was provided access to only an executable-only form of the GI Software (i.e., a version of the GI Software code that could not be altered or transformed).

11. Because of the need for strict confidentiality as to the GI Software code,

the Anthill team was isolated from the rest of the Joost organization. Indeed, the GI Software code was kept on a separate server and the Anthill team developed around it, building new code on separate servers. Even the code product of the Anthill team working with the GI Software was treated with confidentiality and was presented as a "black box" to the rest of the Joost organization.

12. From my first exposure to Joost, as evidenced by my pre-interview non-

disclosure agreement, I was aware that it was critical that the GI Software be maintained in strict confidence. Consistent with company policy, only a limited number of Joost employees were given access to the GI Software. In fact, to my knowledge, only ten engineers and a subset number of executives (including former Chief Executive Officer of Joost Michelangelo Volpi ("Volpi"» were provided access to the GI Software code.

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13. The Joost employees who had access to the GI Software code included the

members of the Anthill team, which consisted ofMartijn Boekhorst, Jens Finkhauser, Paul Querna, Garrett Rooney, Sander Striker and me. Other Joost employees who had access to the GI Software code. but who were not AnthiU members, included Dirk

Willem van Gulik, Graham Asher, Allan Beaufour, Thorn May, Matthew Zelesko and Mr. Volpi.

14. During my tenure at Joost, I was aware that certain members of the

company's engineering team communicated directly with high levels of management, including Mr. Volpi and Matthew Zelesko, formerly the Senior Vice President of Engineering and currently the Chief Executive Officer of Joost. These engineers included Sander Striker and Martijn Boekhorst.

15. As a result of my activities on the Anthill team, I learned a significant

amount of sensitive, confidential information and other trade secrets related to the GI Software. Specifically, I gained the knowledge of how to negotiate around the GI Software to transition from a peer-to-peer technology structure to a centralized server structure. That is, as a member of the Anthill team, I had access to the GI Software code and learned how to develop software code that could supplant the GI Software code and make it obsolete, if that was desired.

16. I served on the Anthill engineering team from January 2007 until

approximately September 2008. when the company headed in a different direction and I became a member of an amorphous, fluid group of engineers led by Jason Gaedtke. I worked primarily with that group until the middle of2009.

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My Relationship With Mr. Volpi During His Tenure As Joost CEO

17. I had only limited one-on-one communications regarding Anthill activities

with Mr. Volpi during his tenure as Chief Executive Officer. In fact, as a general matter, I had a formal, professional relationship with Mr. Volpi, one consistent with that of a non-managerial level employee like myself and the Chief Executive Officer. We did not share a personal relationship.

18. I first met Mr. Volpi very briefly in an encounter comprising ofa mere

introduction and handshake at a Joost-hosted party in Southern California on or around June 19,2007. Mr. Volpi had, at the time,just assumed the role of Chief Executive Officer of Joost.

19. After that initial encounter, I rarely had occasion to speak with Mr. Volpi.

Until July 2009, I recall no in-person meetings between the two ofus and I recall speaking to him on the phone only five times or so. In particular, I recall conversations in the spring of 2008 concerning the technological structure underpinning Joost's "Live" strategy that led to the March Madness NCAA Basketball project, for which I was the lead architect. I also recall conversations during the period of August to October 2008 regarding the technological re-direction of Joost and my anticipated role in that transition. Volpi's Knowledge Of The GI Software And Joost's Technology Projects

20. At the time of its public launch in October 2007, Joost was pitched as a

peer-to-peer technology platform. Under Volpi's tenure as CEO, Joost made two significant technological transitions. First, Joost transitioned from a client-based to a web-based platform and, second, Joost moved from a peer-to-peer technology structure to a centralized server structure.

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21. After the decision was made to transition away from the peer-to-peer

technology and to build a framework to workaround the GI Software, an on-line discussion group was established and titled "Content Delivery." The purpose of the discussion group was to allow key Joost engineers, including myself, and executive-level management, including Mr. Volpi, to share amongst the group all of the important, confidential information regarding the technical and business-related issues associated with the transition. Each member of the "Content Delivery" group, including Mr. Volpi, received all messages and postings from other members of the group.

22. As a matter of course, members of the "Content Delivery" discussion

group utilized that mode of communication for virtually all critical matters pertaining to the transition away from peer-to-peer technology and the workaround of the GI Software. For example, I recall significant numbers of communications regarding how the new software product would be able to confront firewall systems. The information shared on this topic and others was often of a very detailed, technical nature and allowed all members to learn and appreciate the intricacies of the issues being discussed. In the end, based on the nature and frequency of communications through the on-line discussion group, all members of the group who actually reviewed the contents of the communications would have been vested with a great deal of confidential information concerning how a workaround of the GI Software could be accomplished.

Negotiations With Volpi And Joost To Remain At Joost

23. At the beginning of2009, after the two technological transitions did not

prove fruitful for Joost, I realized that Joost was heading in a new, non-commercial direction. Uncertain of the company's future and my role in that future, I reached out to

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my contacts at Google and began seeking other opportunities. That exercise eventually

led to offers from Amazon in February 2009 and from Facebook in March 2009.

24. After I received the Amazon offer, I advised my immediate supervisor at

Joost, Jason Gaedtke, that I was contemplating leaving Joost. Mr. Gaedtke expressed that

he did not want me to leave Joost and soon thereafter so advised Matthew Zelesko.

Messrs. Gaedtke and Zelesko then commenced a joint effort to help retain me at Joost

and engaged me in discussions about future roles, increased compensation and a leave of

absence to complete my doctoral dissertation.

25. By April 2009, Mr. Volpi and a co-founder of the company, Janus Friis,

had become involved in the effort to retain me at Joost and, by late May 2009, were in

effect leading the retention effort. In fact, I met face-to-face with Mr. Friis in early June

2009. During that meeting, Mr. Friis pressed me to remain at Joost, discussed the future

of Joost and my potential role in that future, and offered an increased compensation

package along with an independent consulting arrangement with Joltid. This separate

consulting agreement with Joltid was approved by Mr. Volpi in early June 2009.

26. Around the same time, in early June 2009, I also spoke to Mr. Volpi over

the telephone about remaining at Joost Mr. Volpi encouraged me to reject the other

employment offers because Joost recognized that I was too important of an asset to lose.

volpi's Discloses His Plans To Acquire Sk.vpe And Offers Me Employment Witb His New Venture

27. On July 20-24, 2009, I attended the O'Reilly Open Source Conference

("OSCON') held in San Jose, California. In my capacity as the President of Apache, I

was a conference speaker and assisted with the Apache booth at the conference.

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28. During the OSCON, I spent a substantial amount of time with Mr. Striker

because he was the Executive Vice President of Apache. Mr. Striker relayed to me that he had been having discussions with Mr. Volpi about a Skype-related project. Mr. Striker initially spoke in vague tenus, but made clear that Mr. Volpi wanted him to join S.kype in the near future.

29. Mr. Striker reported that Mr. Volpi also wanted to speak to me about

potential opportunities at Skype and had asked if I was available to meet with him at some point during the conference. I decided to meet with Mr. Volpi to learn more about the apparent opportunity.

30. Although I do not believe that Mr. Volpi was participating in or attending

the OSCON, Mr. Volpi traveled to San Jose and met Mr. Striker and me at the convention center. The three ofus then held our meeting at the bar of a nearby hotel.

31. Mr. Volpi began the meeting by explaining that he was orchestrating a bid

to purchase Skype. He stated that he had a unique advantage over a competing bid involving the founders of S.kype, Janus Friis and Niklas Zennstrom, because eBay founder Pierre Oinidyar was personally opposed to any sale of S.kype to Messrs. Friis and Zennstrom. Mr. Volpi discussed his plan for funding the acquisition in part through his new finn, Index Ventures, and said that, if successful, he would be named Chairman of the Board of Directors of S.kype.

32. Mr. Volpi also revealed the technological future ofSkype. Specifically,

he explained that S.kype would be replacing the GI Software code, the peer-to-peer technology owned by Joltid that allows S.kype to operate. Mr. Volpi identified the ongoing lawsuit with Joltid concerning the intellectual property rights to the GI Software

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and Skype's breach of the software license from Joltid as the basis for this substantial technological transition. To accomplish this goal, Mr. Volpi disclosed that a workaround of the GI Software would need to be performed - similar to the workaround performed by the Anthill team at Joost.

33. During the meeting, Mr. Volpi extended an offer to me to join Skype. He

also made a similar job offer to Mr. Striker. He represented that our compensation would be "above market" and that he wanted us "whenever" we could be available.

34. In addition to extending me an offer to join Skype as a permanent, full-

time employee (upon completion of the Skype acquisition), Mr. Volpi asked me to serve as a consultant on the Skype transaction itself. Specifically, he asked me to assist with the technological due diligence that was to be performed as part of the Skype transaction.

35. I raised with Mr. Volpi my concerns about working for Skype given the

apparent conflict of interest with my relationships with Joost and Joltid and the recent effort by those entities to retain me - an effort in which Mr. Volpi himselfhad participated on behalf of Joost only a month earlier. Mr. Volpi responded that he could get the Skype lawyers to examine my recent agreements with Joost and Joltid to try to find a way out of my obligations thereunder.

36. When I inquired about my potential role at Skype, Mr. Volpi responded

with a vague statement that ''there would be plenty of work." Mr. Volpi casually represented that he did not envision me working with the Skype engineering team building around the GI Software, but that statement did not seem genuine to me. First, the sample position that he proffered upon my inquiry - working on the Skype website - made no sense given my talent, experience and programming skills. Second, any concern

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for the impropriety of Mr. Striker and J using the confidential knowledge of the OJ Software we gained at Joost to benefit Skype was contradicted by Mr. Volpi's actions during the remainder of the meeting. Indeed, Mr. Volpi discussed in great detail Skype's ongoing efforts to workaround the OJ Software in an effort to make it obsolete and invited Mr. Striker and J to share our thoughts on the potential challenges Skype's engineers would face based on our experiences with the workaround at Joost.

37. Specifically, and with significant detail, Mr. Volpi described what he had

learned about Skype's transition approach and the technical challenges that Skype engineers were encountering in developing a workaround to the OJ Software. He reported that he believed that the Skype team was heading down the wrong direction and solicited our thoughts on those challenges, suggesting that Skype would need to use the approach the Anthill team had used. For example, Mr. Volpi discussed at a granular level the firewall protection traversal and detection problems that Skype was encountering and recalled Joost's experiences on those subjects. It was evident to me from the conversation that Mr. Volpi had been kept abreast of the Skype team's efforts and that he was involved in them. It was also clear that Mr. Volpi had a detailed understanding of the potential of a workaround of the OJ Software as a result of his involvement with the same efforts at Joost.

38. During the meeting, Mr. Volpi displayed substantial animus towards

Messrs. Friis and Zennstrom.

39. My take away from the tone and substance of the meeting with Mr. Volpi

was that he was trying to remove me from the playing field, so that I would not be

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accessible to Messrs. Friis and Zennstrom. In short, Mr. Volpi was effectively asking me to "napalm" my relationships with Joost, Joltid and Messrs. Friis and Zennstrom,

I declare under penalty of perjury under the laws of the United States of America and the State of Delaware that the foregoing is true and correct.

Executed on October 11,2009, at Irvine, California.

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