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 …
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."
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).
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!
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.
"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.
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.
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.
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.
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.
... 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.
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)
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...
> 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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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.
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.
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.
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.
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.
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.
"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....
"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 .
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.
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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Whoever wins, I'm glad I went to the trouble of getting rid of my Facebook account. At least, I /appear/ to have gotten rid of it. You can tell they don't want to give up potentially profitable user data when the tell you that you have to go for twenty days after the account is closed without logging in for it to actually go away--if, indeed, it does. You know, just in case you change your mind.
"I think we are quite sure..." is generally in the same ballpark as a programmer saying "It SHOULD work", which actually means "I have my doubts and my opinion is based more on hope and wishful thinking than facts and logic, and I don't to be blamed if it goes pear-shaped."
I get these weasel phrases from my team sometimes, and I jump on them straight away. "Will this solution work?" I ask. If I get "I think so" or "It should work" in response, my answer is, "No, either it WILL work or it won't. Which is it?" Weasel phrases like "I think it will..." and "it should..." are just arse-covering avoidance of responsibility. Go and MAKE sure before you come to me and open your great flapping cakehole!
I mean, you're either sure or you're not. If you only THINK you're sure, then you're not really sure at all, are you?
I'm not sure about USA, but the UK has a "unfair" contract law which could be used as a defence. Essentially the contract was so unweighted towards one side that it could be argued that the contract is void.
Also because the company made no effort to claim their 50% share they breached the contract as well
All Z has to prove is that he sent one email, or letter offering them their share at any point, which they didn't take up and law case dead in the water.
Also there surely could be an argument that facebook has become far more than a product for Harvard University students, and hence by not claiming when the project was completed, FOR ITS ORIGINAL PURPOSE, the company has lost its claim now that it is far bigger than it was...
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