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Winklevoss Twins Lose
Legal War With Facebook
Published April 11, 2011
SAN FRANCISCO – The billionaire’s battle over the founding of Facebook
is finally over.
The 9th U.S. Circuit Court of Appeals said Monday that Tyler and
Cameron Winklevoss -- the former Harvard University classmates of
Facebook founder Mark Zuckerberg -- can’t undo their settlement over
the social networking site. The appeals court ruled that the twins were
savvy enough to understand what they were agreeing to when they signed
the agreement in 2008, a deal that called for a $20 million cash
payment and a partial ownership of Facebook.
“At some point, litigation must come to an end,” chief justice Alex
Kozinksi wrote for the unanimous three-judge panel. “That point has now
been reached.”
A third classmate, Divya Narendra, was part of the settlement with the
twins but did not pursue the second lawsuit seeking to undo the
agreement.
The twins had alleged they were misled about Facebook’s value when they
agreed to settle their lawsuit that claimed Zuckerberg stole their idea
to launch Facebook.
Cameron and Tyler Winklevoss were famously portrayed by Armie Hammer in
The Social Network, a Hollywood blockbuster that dramatized the events
surrounding the founding of the massive social network.
The original case was brought against Facebook in 2004 when the
brothers claimed that Zuckerberg broke an oral contract with the
plaintiffs to create ConnectU (originally dubbed the Harvard
Connection). The twins alleged that Zuckerberg not only stole the code
and the idea, he stalled them them so he could get his site,
thefacebook.com, out first.
The suit was originally settled for $65 million in 2008 but the latest
lawsuit had claimed fraud for Facebook and Zuckerberg “not volunteering
a more recent valuation of different Facebook stock.” The settlement is
now worth more than $160 million because of Facebook’s increased
valuation.
Facebook has said it stood behind the original settlement, noting that
the twins “admit that they calculated the value of Facebook themselves,
based upon a truthful press release from several months earlier,”
according to leaked documents.
Kozinski said the twins were “sophisticated parties” when they agreed
to the settlement during a mediation meeting.
“They brought half-a-dozen lawyers to the mediation,” Kozinksi wrote.
In a statement, Colin Stretch, deputy general counsel of Facebook said
“We appreciate the Ninth Circuit’s careful consideration of this case
and are pleased the court has ruled in Facebook’s favor.”
Monday’s ruling upholds a lower court decision enforcing the settlement.
Lawyers for the Winklevoss twins said they are reviewing the decision
and have not decided on their next step. The twins could ask the
Supreme Court to consider the case.
The Associated Press contributed to this story.
Read the story with links at FoxNews.com
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