A federal judge will consider next week whether to throw out a lawsuit accusing Mark Zuckerberg, the founder of Facebook.Com, of stealing the idea for the popular social networking site from three of his former Harvard classmates. (July 20, 2007)
ConnectU.Com, which is now known as, the blueprint for Facebook in 2003 while employed as a programmer by three former Harvard students, alleges that Zuckerberg appropriated the concept, the source code, and the legal case, initially submitted in 2004.
According to ComScore, Facebook had approximately 28 million distinct visitors as of June, an increase from 14 million in September. Last year, Facebook purportedly turned down an almost $1 billion acquisition proposal from Yahoo!, Leading to widespread conjecture that there might be another high-value bid for the company. The July 25 hearing takes place in the midst of this speculation.
Analysts stated that, if the lawsuit manages to withstand the motion to dismiss, it has the potential to cause disruption to any potential sale or initial public offering. This is because potential buyers or investors may be hesitant to engage with a company that is currently dealing with legal proceedings. Mark Zuckerberg, who is 23 years old, has publicly expressed his intention to maintain the company as a private entity.
Eric Goldman, the academic director of the High Tech Law Institute at Santa Clara University, expressed, “One compelling motive for reaching a settlement is the desire to present a pristine organization to a prospective purchaser.” He elaborated that this reluctance might generate a sense of urgency to resolve the case.
Douglas McIntyre, the editor of 24/7 Wall St., A financial news and opinion website, stated that having an ongoing legal case that claims the ownership of the source code does not pertain to the company, renders it extremely challenging to carry out any tasks.
McIntyre stated, “This makes it imperative that they resolve the thing.” It’s a little dirty secret that has gone from being in the front-page news to the world of technology. Clearly, it has been poisoned.
Narendra, Divya, and the founders of ConnectU, Tyler and Cameron Winklevoss, are asking for unspecified damages, including any profits made by Zuckerberg, by turning to Facebook and using their ideas.
ConnectU attorney John Hornick stated, “If it weren’t for the fact that Facebook would not exist, he would have developed the concept of establishing his own platform, contributed to the development of our clients’ website, and acquired our clients’ source code without their knowledge.”
A representative from Facebook stated that the company does not provide any statements regarding ongoing legal matters.
Zuckerberg and his business associates, who are also defendants in the lawsuit, have requested for the case to be dismissed. The company defended itself in court documents by stating, “Out of all the students, only one had a truly groundbreaking concept that could establish a remarkable enterprise. That individual happened to be Mark Zuckerberg.”
In 2003, the Winklevosses and Narendra enlisted Zuckerberg’s assistance in the development of ConnectU, which was then referred to as Harvard Connection. As per the complaint, they provided him with the source code and their business strategies. The lawsuit asserts multiple legal accusations, such as copyright violation, misappropriation of trade secrets, deceit, and violation of contractual obligations.
According to legal documents, Zuckerberg initiated the creation of Facebook on February 4th. He officially registered thefacebook.Com on January 11, 2004, just three days after sending them an email committing to develop a “working website” for Harvard Connection, all without informing the Winklevosses.
Hornick mentioned, “The Web page of our customers,” “on the Web page of our customers,” “engaged in the development of his Web page,” “he was involved in,” “We are aware,” “that he had this concept prior to his encounter with our customers,” “There is no proof,” “he was working on,” “while he was occupied with.”
ConnectU’s lawyers quickly filed another lawsuit, but the case was dismissed earlier this year due to technical reasons. The Winklevosses and Narendra took legal action against Facebook in September 2004. ConnectU was established in May 2004 and has faced difficulties in rivaling the significantly more popular Facebook.
Goldman stated that the claimants will receive an uncertain amount of money if they emerge victorious, and the expensive legal dispute commenced three years prior to the surge in popularity and worth of Facebook.
He stated that the validity of ConnectU’s arguments would rely on the jury’s determination of the specific details of the lawsuit.
Goldman mentioned that it might involve more than just finances. However, considering the substantial amount of time and money invested in the lawsuit, it suggests that the potential of selling Facebook could exert pressure to reach a settlement.
“Given how much has been spent, this could be more of an emotional concern, someone feeling like they’ve been jilted,” he said.
Attorney Hornick from ConnectU said, “If they make a large enough offer, I will settle because I don’t know the exact amount that will make my client happy.”
Noah Kagan, who departed from Facebook in the past year and claims to be acquainted with Zuckerberg and the Winklevosses, expressed, “The notion was that it would discreetly disappear,” upon the initial filing of the lawsuit. “Facebook will now be compelled to confront it.”