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Just as Mark Zuckerberg‘s battles with the Winklevoss twins, as told in The Social Network, is coming to a close, another legal battle that involves the founding of Facebook is unfolding.
On Monday, the Ninth Circuit Court of Appeals rejected the Winklevoss’ latest attempts to re-open the settled litigation over their claim that their former Harvard classmate stole their idea for a social networking site.
“At some point, litigation must come to an end,” Chief Judge Alex Kozinski wrote in a decision that likely will force the twins to take the $65 million worth of cash and stock settlement they previously accepted.
But just as the decision came down, another man claiming joint ownership of Facebook came to the forefront of the action. Paul Ceglia has filed an amended complaint against Zuckerberg with some startling allegations.
Ceglia claims that he owns a large portion of Facebook after he bankrolled Zuckerberg’s original site for $1000. He alleges that his deal with Zuckerberg eight years ago entitled him to 50% of the company, plus as an additional 1% ownership for every day the then-uncompleted project remained unfinished past a certain launch date.
At the time of Ceglia’s first filing, his claims were easy to ridicule. He waited seven years to claim more than 80% of the company? Might a certain major film that questioned Facebook’s genesis have something to do with it?
But Ceglia has hired a major law firm — DLA Piper — which has just filed an amended complaint, full of details beyond the original check that was originally written to Zuckerberg.
Specifically, Ceglia produces a cache of e-mails that purportedly show his conversations with Zuckerberg.
It’s claimed that Zuckerberg responded when Ceglia advertised his need for a website developer on Craigslist. The two then allegedly opened up about their respective projects. Zuckerberg told Ceglia about “The Face Book,” and in April 2003, the two allegedly executed a written working agreement.
Over the next few months, the two communicated electronically. According to one e-mail purportedly made in November 2003, Zuckerberg referred to the Winklevoss twins and wrote:
“I have recently met with a couple of upperclassmen here at Harvard that are planning to launch a site very similar to ours. If we don’t make a move soon, I think we will lose the advantage we would have if we release before them. I’ve stalled them for the time being and with a break if you could send another $1000 for the facebook (sic) project it would allow me to pay my roommate or Jeff to help integrate the search code and get the site live before then. Please give me a call so that we can talk more about this.”
Is this legit?
Facebook is claiming the whole thing is a fabrication and points out that Ceglia has been convicted of criminal fraud in relation to a company he once operated. On the other hand, the involvement of a major law firm suggests the communications shouldn’t be summarily dismissed out of hand. DLA Piper is vouching for the authenticity of the written contract, at least, and we’ll have to await word on those e-mails.
Meanwhile, Facebook has its own high-profile lawyers on this case. including THR, Esq. Power Lawyer Orin Snyder at Gibson Dunn & Crutcher, who once told us his nickname is “The Terminator,” for his ability to “take hard cases and win them early.”
This one could be interesting. As much as Aaron Sorkin explored the themes of friendship and betrayal in the Facebook disputes that served as fodder for Social Network, we imagine this latest case tests other memes of the digital age — identity and authority.
Here’s Ceglia’s full amended complaint:
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