Winklevosses Lose What May Be Final Appeal in Facebook Lawsuit

By Chris Preimesberger  |  Posted 2011-04-11 Print this article Print

Twins who say Facebook founder Mark Zuckerberg stole their idea for a social network site may be out of legal options after years of litigation.

April 11, 2011, was a memorable legal day for Facebook and its co-founder and CEO, Mark Zuckerberg. One lengthy bit of litigation is petering out, while one is just starting up.

The first lawsuit-so long-term in nature (eight years) that a feature film about it has come and gone-ground to a halt when a federal court of appeals panel of three judges ruled that twin brothers Tyler and Cameron Winklevoss cannot renege on a $65 million settlement they made with Zuckerberg in 2008 and litigate for more money.

In the newer case, New York software developer Paul Ceglia, who claims to have rights to 50 percent of Zuckerberg's equity in Facebook, said April 11 he has emailed proof from Zuckerberg of his claim and will litigate in federal court. Facebook has called Ceglia "a scam artist."

The Winklevosses have been contending legally for years that Zuckerberg stole the idea for Facebook from them. The Academy Award-winning film "The Social Network" dramatized the story of the case.

The Winklevosses, Harvard University classmates of Zuckerberg, had asked the court in January to revisit a $65 million legal settlement they signed with Zuckerberg in 2008. The brothers contend that Zuckerberg stole their idea after he was hired by them to program their social networking site, called ConnectU, in 2003.

In the settlement, the Winklevosses received $20 million in cash and $45 million worth of stock valued at $36 per share in the deal.

At the time of the 2008 settlement, Facebook made no admittance that Zuckerberg had stolen the twins' idea in agreeing to end the litigation. In fact, Zuckerberg has consistently maintained that Facebook was his creation.

The three-judge panel said in its ruling April 11 that it saw no reason to reopen their case against Facebook, the privately held-and world's largest-social networking company that has been valued at about $55 billion.

"The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace," the three Ninth Circuit Court of Appeals judges wrote. "At some point, litigation must come to an end. That point has now been reached."

Apparently the Winklevosses and their lawyers didn't understand the ruling. Jerome Falk, a lawyer representing the Winklevosses, released a statement after the hearing saying that his legal team will file for a rehearing within two weeks.

"In my judgment, the opinion raises extremely significant questions of federal law that merit review by the entire Ninth Circuit Court of Appeals," Falk said in a statement.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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