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back to article Zuckerberg: I'm 'quite sure' I own Facebook

Mark Zuckerberg last night addressed the question of whether he owes 84 per cent of Facebook to a New York firewood salesman. His comments in a TV interview followed a federal court hearing on Tuesday, in which a Facebook lawyer said she was "unsure" whether Zuckerberg had signed a contract in 2003, which Paul Ceglia claims …

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hmmm

not sounding quite as cocky as he did before is he? Beeeeaaatch!

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This could be the largest fail...

in the history of the universe, quite frankly i have the popcorn out and watching intently.

Thumbs up to this one :D

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Anonymous Coward

Property of I dont care who

Ya know Facebook IS really great at organising stuff with friends and seeing what family are up to etc. I dont play any of the Farmafia games but I do find Facebook really useful. I don't care who owns it provided it works.

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gotta admit

it would be hilarious if the guy actually DID own 84% and was able to take control of it. It's why you spend money on lawyers for contracts, or you take your chances that you are agreeing to something you actually want to agree to :)

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There is sufficient ...

'smells' about the pedigree of Facebook to justify doubt.

Zuckerberg has already paid out $69,000,000 to satisfy one other claim. You wouldn't pay that much if there wasn't good reason.

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Yeah but...

In this day and age, that good reason could easily be $69,000,000.01 in anticipated legal fees.

Your statement is akin to presuming guilt upon someone who invokes their Fifth Amendment right not to testify because "if their testimony might incriminate them, they must be guilty of something."

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And...

Why has it taken them 6 years to decide that they are entitled to this share?

Im not 100% on any of what has gone one but Im reading it as:

1. Zuckerberg does freelance work for company x

2. Part of that work was creation of a social media site.

3. Zuckerberg delivers site requested by company x

4. Zuckerberg creates own social media site, possibly using similar code to that found in the site created for company x.

Unless the contract explicitly states that all code is the propertly of company x or if it has a clause that says that he could not work on a similar project within a certian timescale then I dont see what the problem is...

I do freelance work, and I would expect to be able to re-use any code that I develop unless the company I am working for explicity forbid it.

EG. if some one wants a DNN module, I create it and they take delivery, I would expect to be able to modify that module so that it would be useful to others with similar requirements and then re-sell it...

That said I may be completly mis reading the situation and maybe Zuckerberg did rip off ideas and code from company x... but thats the thing unless the contract states that he was not permitted to do this then I dont see why thats a problem (Unless he lifted the whole thing unmodified and used that... but thats just cheeky).

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Pint

Indeed

While I find it quite hilarious, these sorts of things always come out only when product X has made a bloody mint for the accused. I can understand waiting for a year or two, but let's face it Zuckerburg is hardly a model of modesty is he?! You know who he is and what he has done, so you can't say FB suddenly came out of nowhere in the last 6 months!

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Paris Hilton

That one's easy

"Why has it taken them 6 years to decide that they are entitled to this share"

So someone else does the hard work of building the company to its current size.

I'm with you on the other stuff, though. This all smells a bit fishy, it doesn't tally with the way freelance coding usually works.

Paris, because, well, you know...fishy.

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FAIL

That's not what is alleged...

According to http://www.theregister.co.uk/2010/07/21/ceglia_facebook/ , Zuckerberg signed a contract, in which he got a $1,000 investment for a website "designed to offer the students of Harvard university access to a wesite [sic] similar to a live functioning yearbook with the working title of 'The Face Book'.

According to the previous article : "The contract, due for completion on 1 January 2004, granted Ceglia a 50 per cent stake. For every day past the due date he would be granted a further one per cent, leading to his 84 per cent ownership claim."

This really could be epic. If he did sign that contract, I can't see how legally he could be allowed to weasel out of it.

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code

Having done no research on this other than read the article, I don't believe it's anything to do with code.

" Ceglia's lawyers say different, and that he invested $1,000 in what became Facebook, after employing Zuckerberg to work on a separate project."

Sounds like they met when Z was employed by C, and that C stuck a little cash (with contract) into the fledgling enterprise.

I'm with the popcorn guy above: this is going to be fun to watch.

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Be careful

Developers own the copyright to software unless the developer is the client's employee or the software is part of a larger work made for hire under a written agreement. In order to own the copyright, the client must have an agreement transferring ownership from the developer to the client.

verbatim from http://www.nolo.com/legal-encyclopedia/article-29584.html

I'm not sure that this is what's involved here though. I'd say it's to do with the investment of $1000 and the contract surrounding that investment (as TFA states in the last paragraph)

The replacement of "I" with "We" is a common indicator of a lie being told though.

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Agree...

When I was contracting, I had a stock of re-usable code or SDK that I carried around with me from contract to contract. All the systems I worked on were very similar and apart from saving me a lot of typing, it guaranteed pretty much bug-free code. There is a line between ripping off a system and re-using code and design. Third-party system templates and plug-in SDKs are common place and I have simply written my own SDK and design template for the type of systems I specialise in. My customers paid for a system that worked in a particular manner but how it got there was the reason they contracted me for.

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Go

It Depends ...

... on the contract and property laws under which you work. But generally, if you get paid by company "X" to do programming for them, company "X" outright owns everything you did for them; it's their intellectual property.

Not having a legal problem now is not the same as no legal problems at all, especially since you just announced your past practices and future intentions.

Standby.

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Did you read the article?

Did you even read the article?

1.) Zuckerberg does freelance work with company X, which really has nothing to do with social networking.

2.) Company X is impressed, likes Zuckerberg.

3.) Zuckerberg says "well.... you know... I'm working on this private project... if you pay me $1000 you can own half of it, +1% every year I don't give you the half you own".

4.) Company X says "sure!"

5.) Zuckerberg fails to give them stock, hoping they'll forget or go away.

If I'm company X, I sue for it, and immediately put it up for sale. Make a couple billion IMMEDIATELY. Activision would sell their soul to own facebook, not that Activision HAS a soul, but you get what I mean.

Most standard contracts in the US for coders or engineers also say that any intellectual property you develop while being employed by company X belong to company X. See the case of the "Bratz" dolls. Some guy who worked for Barbie developed them in his spare time, and Mattel got full rights to the product for free.

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Joke

"The replacement of I with We...."

Coo, really? That explains a lot about the British Royal Family....

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finding things

"Why has it taken them 6 years to decide that they are entitled to this share?"?

If their office is anything like mine, it took them that long to find the damn contract. That or the guy stumbled across the contract and realized what it was he had in his hands.

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Flame

Similar situation down our street

A guy builds a house in his back garden.

His neighbour waits until he's got half the roof on before pointing out that it's 3m inside his boundary. Monumental cock-up, but kudos to the guy for waiting 'til he can maximise his profit before striking. I suspect this is (roughly) he same thing.

Lawyers may be considered evil, but paying a good one early can save a lot of cash in the long run.

(this just occurred to me 'cos I'm sat in the garden looking at the bloody white elephant)

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Different

It is not abouf "I am the Coder, beaaaaatch", but about "I am the CEO, beaaaaaatch". He had an _investment_ in his project.

Just goes to show, that it is not particularly difficult to get the better off someone who is ploughing the ceiling with his nose. He tends not to see what is under his feet...

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FAIL

@Fuzzy

Well, of course they do - what's the point in paying lawyers to fight for an 84% share of a company that's worth tuppence ha'penny?

GJC

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reuse code

> I do freelance work, and I would expect to be able to re-use any code that I develop unless the company I am working for explicity forbid it.

I do to, but I would not even start developing before ownership was established. I certainly would not assume it would be ok to reuse the code, if you could what's to stop you taking the money for doing the development and then say selling the software yourself. I think you are leaving yourself wide open for legal action.

I've never had any problem persuading clients to allow me to share ownership of generic stuff, especially when you point out it would be cheaper as I could reuse my existing general purpose libraries.

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Oh wheres the like button when you need one!?

Seriously thought, this seems to always happen. Poor boy has dream, poor boy becomes world famous, some company with some relation says oh I own that... or apart of that ktnx bye.

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Say what now?

"Poor boy has dream"

LOLWUT? Raised in Dobb's Ferry, where the maids have dog walkers, doctor and dentist parents, Latin student (what kind of amatores matrum does Latin?), then Haaaarvard. It's the classic riches to super-riches story.

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Pint

amatores matrum

Nice and subtle. Have a pint on me!

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hehe

Heh, no so smug now is he? Spiffing.

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fun to watch, but

on the other hand, there's just something unpalatable about handing that much asset to some degenerate piece of shit.

Suckerberg might deserve a lesson in humility (in fact, he DOES), but that doesn't mean the other scumbag deserves a single crooked penny.

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WTF?

Scumbag?

Really, a scumbag? Why? Whats the basis for that? If I had invested a thousand bucks (which is a lot of money for me) in something that later grew into a huge enterprise, I'd want my share. Why should I let it slide just because it's been a few years? I still risked my investment on you, so pay me.

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Venture Capital Ring A Bell?

Where would Facebook be if Zuckerberg had not gotten that seed money? You really think the venture capitalist that fronted Zuck the cash deserves nothing for the success of the venture he funded? Maybe not in China, but in America there's a direct correlation between shelling out cash as an investment in a company and getting something in return.

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Rob
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Reminds me...

... of the character in the Italian Job (the newer film that has no relation to the old one) where the computer hacker guy keeps claiming someone in college stole his work for Napster.

Did Zuckerberg creep into someone's student halls and steal a disc while they were asleep?

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Two Types of People

1) Creators

2) Salesmen

Vint Cerf is a creator. Net worth? Average. Inventions? The Internet's primary protocols.

Mark Andreeson is a creator. Net worth? Average. Inventions? The modern web browser.

Zuckerberg is a salesman. Net worth? Billions. Inventions? Courts are deciding.

Steve Jobs is a salesman. Net worth? Billions. Inventions? None.

And according to claims made in the first "who made Facebook" lawsuit that Zuck settled for $69M, in fact he *DID* creep into someone's student halls and steal a disc while they were asleep.

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Well...

If it's true, he should change his name to Suckerberg.

sorry.

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Joke

That face...

That picture already makes you want to wipe the smile off his face...

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This Ceglia bloke.

Is he a spotty, egotistical little twat with a god-given talent for stuffing both feet in his own gob?

If not, for the sake of keeping El Reg's department of pisstaking fed with a ready supply of quality material I hope that Zuckerberg wins this one......

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David, I think you are misreading

My understanding of the claim is that Zuckerberg solicited and received a $1000 investment in a nascent social networking venture called 'The Face Book' which, in the contract presented and apparently signed, looks remarkably similar in concept to an early Facebook.

The plaintiff, our New york fuel salesman (which is probably the most amusing part of the whole thing) claims that he therefore owns a part of Facebook (and a big part, too).

Zuckerberg can either claim that the contract is a fake, which seems a plausible argument given the length of time it's taken to present it, but it's odd that Zuckerberg seems so unsure himself what his defence is.

The other possible claim is that 'The Face Book' was an entirely different project to Facebook and that the guy's $1000 was lost in a project that went down the tubes.

If he does choose the latter defence he's on extremely shaky ground so I think everyone is assuming that 'this contract is fake' is the defence he'll choose, and that his delay in choosing it makes an initially open and shut case of 'just another weirdo coming out of the woodwork' look a lot less clear cut.

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Except...

Except every indication is that the contract is in fact real. He can't lie about it, he'll go down for perjury and lose the company. His only move at this point is to try to settle out of court.

Thing is, $1000 isn't a lot, especially for someone who went to Harvard. 50% of the company is a huge stake for that little money. This means one of a few things:

1.) He was trying to rip the guy off for some cash.

2.) He never expected "The Face Book" to amount to anything.

3.) He was a dumb kid, doing dumb things.

I'd bet it is a little bit of all three. What I am most shocked about is that no one else has come forward yet. I'd be willing to bet he offered contracts like this to many of his clients, probably far in excess of 100% of the company between all of them.

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Yes and no

If this contract were produced shortly after Facebook became high profile I'd agree with you that it's authenticity looks solid.

Because the guy has waited 4 years to make the claim, there is certainly explorable doubt about his motives in producing it now and his reasons for sitting on it beforehand.

Zuckerberg's apparent record of dodgy behaviour certainly makes the lawsuit seem plausibly true, but it's far from the case that 'every indication is that the contract is authentic'.

Will be fun to watch.

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MrT
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Bialystock and Bloom

Maybe Marky-Mark was a fan of 'The Producers'? In which case, the question might not be 'how did he do so well' but instead 'how did he fail so spectacularly to cock it all up'...

"Springtime for Ceglia and Zuckerberg" etc

http://www.bialystockandbloom.org/

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Re: Yes and no

"Because the guy has waited 4 years to make the claim, there is certainly explorable doubt about his motives in producing it now and his reasons for sitting on it beforehand."

You know, even now there are plenty of people in the world who don't know what Facebook is.

It's entirely possible the guy just spotted it in the papers this morning and went "holy sh*t! That's my company!"

Zuckerberg had a duty to pay the guy, the guy didn't have to go asking for payment.

He's lucky that he just being asked for the guys contractual rights and isn't being sued over and above this for failing to report his earnings to his investor -- that would be seriously bad for him....

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This Idiot ...

... should be nobody's business model.

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@Bullseyed

"Most standard contracts in the US for coders or engineers also say that any intellectual property you develop while being employed by company X belong to company X. See the case of the "Bratz" dolls. Some guy who worked for Barbie developed them in his spare time, and Mattel got full rights to the product for free."

Um not true .

Mattel had sued smaller rival MGA Entertainment over the design rights to the edgy and multiethnic Bratz doll, seeking as much as $1.8 billion in damages. Since their 2001 debut, the pouty-lipped, big-headed Bratz dolls have been eating into sales of Mattel's iconic Barbie.

In mid-July, the jury in a Riverside, Calif., court decided that designer Carter Bryant had created the majority of MGA's Bratz doll design drawings, prototypes and sculpts while he was still employed at Mattel. Bryant reached a separate settlement with Mattel Terms were not disclosed.

It also was determined that MGA and its Chief Executive Isaac Larian intentionally interfered with contractual duties that Bryant owed to Mattel and converted property for its use.

In the end, the jury awarded $90 million for the claims against MGA and Larian and $10 million for copyright infringement against MGA and Larian.

MGA sued Mattel first. Then Mattel counter sued .

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Title

Granted, I wasn't as copypasta as you on the specifics, you didn't refute my point.

It was determined in court, whether by suit or by counter-suit, that Mattel had rights to the product because it was developed by someone who they employed. On the clock or off, for work or not, they owned that IP.

Was Zuckerberg's contract written that way? We have no idea. I'm not saying for sure it was or was not, I am saying a reasonable, intelligent person must keep it available as a possibility.

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Re: Title

Bullseyed, do you read the articles or just the comments? Cos I distinctly remember the article mentioning that Ceglia invested in a project of Zuckerberg's called "The Face Book". Does that name remind you of anything...?

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Unhappy

Please kill facebook....

coz I cannot get around to closing my account.

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Grenade

Data...

Too late - your data is already in Dr Zoidbergers pincers, and soon the NY firewood salesmans.

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Boffin

He may have waited too long to enforce the contract

There is, in civil law, a concept called the "doctrine of laches", which basically says that if someone knows that they have a right to something, and wait too long to enforce it, that they lose the right to enforce it.

"Too long" in the US often differs from state to state.

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Well if he does lose.

Mark Zuckerberg can always open a new site. Eggonfacebook.com.

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Stop

@Bullseyed

Mattel don't own the rights to Bratz

http://www.bloomberg.com/news/2010-07-22/mattel-s-victory-on-rights-to-bratz-dolls-overturned-by-u-s-appeals-court.html

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Frying pan -> Fire

If he said that Facebook was a rip-off, he'd still be snookered even if the inventors couldn't sue, because then he could be sued for fraud, because he would be admitting to *not owning* the thing he sold to Ceglia way back when....

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