Winklevoss Twins Take Facebook To Supreme Court

Hours after a federal appeals court on 16 May refused to revisit its 11 April decision ordering two former classmates of Facebook founder Mark Zuckerberg to accept a multimillion-dollar settlement over an intellectual property dispute, yet another legal manoeuvre came to the fore.

The Los Angeles Times reported late on 16 May that Cameron and Tyler Winklevoss now intend to take their case to the US Supreme Court, having exhausted all lower court bids to initiate a new hearing.

Settlement

The Times said that Winklevoss attorney Jerome Falk, in a written statement, said he plans to pursue two legal issues: the court’s decision that a party who is defrauded into entering a settlement agreement cannot challenge the contract for fraud, and the court’s decision that statements made in a confidential mediation cannot be used as proof that a party committed securities fraud.

“Settlements should be based on honest dealing, and courts have wisely refused to enforce a settlement obtained by fraudulent means,” Falk said.

Facebook could not immediately be reached for comment.

Most observers believed the appellate court decision in San Francisco would have finally buried the case of Winklevoss and Winklevoss vs. Zuckerberg and Facebook. But apparently the case is still quite alive.

The Winklevosses, Harvard University classmates of Zuckerberg, had asked the court in January to reconsider a $65 million (£40m) 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 2008 settlement, the Winklevosses were to receive $20m in cash and $45m worth of stock valued at $36 per share in the deal. They later claimed they were misled by Zuckerberg during the settlement negotiations.

Facebook, still a privately held company, was valued last year at more than $55bn.

Long-term litigation

At the time of the 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 lawsuit was so long-term in nature (eight years) that a feature film about it (“The Social Network”) has since come to theaters and gone to video.

Last month, a three-judge panel of the 9th US Circuit Court of Appeals in San Francisco upheld the settlement. “At some point, litigation must come to an end. That point has now been reached,” the court said in its decision.

On 16 May, the same court declined to assign the case to an 11-judge panel for reconsideration. So the twins now are apparently set on continuing the litigation in the highest court in the United States.