The lawsuit alleges that Jain and former InfoSpace chief software architect, Kevin Marcus, violated their noncompete agreements after forming software company Intelius earlier this year.
Jain serves as Intelius' chief executive and Marcus as its chief technology officer. The two men are joined by other former InfoSpace employees and former Microsoft senior executives at the young company.
The lawsuit, filed in King County Superior Court in Seattle, alleges that Jain and Marcus violated their noncompete agreements with InfoSpace, misappropriated trade secrets and confidential information, and interfered with InfoSpace's contractual relationships.
Jain stepped down as CEO in April 2000, and the company named Arun Sarin as his replacement. Sarin left the company after a brief stint anduntil a permanent replacement could be found.
Last July, the company announced it would, and in December named as its new top dog. The board voted to oust Jain who later told The Seattle Times he had opposed Voelker's appointment.
Jain remains an InfoSpace director. A company representative said Jain has not tendered his board resignation since the lawsuit was filed. The company provided no further details on its lawsuit.
Marcus worked at InfoSpace from 1996 until last November.
Jain, however, contends the lawsuit is without merit.
"Our technology is so different than what they do, this suit has no merit. We offer a certification service to (corporate customers) that verifies people's e-mail, their address and other public information. And we're developing database integration software for the government for homeland security," Jain said.
Jain, whose term on the board expires in 2005, said he has no intention of resigning. He noted he holds more than a 20 percent stake in InfoSpace, so he wants to remain involved with the company.
"I hold a large stake in InfoSpace, why would I want to harm the company," Jain said.
He added he will contemplate legal action he may take against the company, declining to elborate further.