Facebook Ownership Fight Gets Weird: Facebook Lawyer 'Unsure' If Zuckberg Signed Contract

Legal Issues

from the perhaps-you-should-ask-him dept

Wed, Jul 21st 2010 5:12am — Mike Masnick

Last week, we wrote about the bizarre case in New York where a guy is claiming to own 84% of Facebook due to a signed contract with Mark Zuckerberg from six years ago. As we noted at the time, the terms of the contract seemed quite odd and it appeared unlikely to be legit. Now things are getting strange, as a Facebook lawyer has admitted to being "unsure" whether or not Mark Zuckerberg actually signed the contract. That seems like the sort of thing Facebook's lawyer should have found out before going to court, doesn't it?

The hearing also explained the situation in a little more detail, saying that the guy, Paul Ceglia, had hired Mark Zuckerberg to do some coding for Ceglia's own project (a sort of "Street View" thing, that was intended to be a paid app for insurance providers). Somehow, according to Ceglia's lawyers, the deal was expanded so that not only would Zuckerberg code Ceglia's project, but Ceglia would "invest" in Zuckerberg's online yearbook project. The whole thing still seems... confusing, at best. It's unclear why a simple work for hire coding deal would also involve investment in the early version of Facebook, and even the timing seems off, as much of this happened well before pretty much all other reports discuss Zuckerberg's first plans for Facebook.

Facebook is still claiming that the statute of limitations on this means it doesn't matter one way or the other, but it still is surprising that it's lawyer would go to court being "unsure" of whether or not Zuckerberg signed the contract.

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Filed Under: contract, mark zuckerberg
Companies: facebook

12 Comments

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Anonymous Coward, 21 Jul 2010 @ 5:38am

I think this is a case were the client without some very important details from his lawyers LoL
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Anonymous Coward, 21 Jul 2010 @ 5:39am

When you're busy ripping off everyone, it can be hard to remember who all your marks were.
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Anonymous Coward, 21 Jul 2010 @ 6:28am

If it wasn't legit at all, FB+lawyers would have said so loud and clear, from the very beginning. To not do so, and even just to say they're "unsure", and start claiming statute of limitations, especially during a legal hearing, tends to lend some credence to the claim. It sounds like there really was some kind of contract signed, and now they're just trying to determine their full liability.
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known coward, 21 Jul 2010 @ 6:34am

maybe
this lawsuit is not as crazy as it seems. People sign stupid contracts all the time.
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Anonymous Coward, 21 Jul 2010 @ 6:46am

It doesn't really sound that stupid, to me:
"Pay X amount of money, and you get this work for hire now, and you get part ownership in this future project, too."
At the time, it wouldn't have seemed like much of anything, other than Zuckerberg trying to get some extra upfront cash to help him with some pet project he wanted to get going. The stupid part is how he would have come up with such a percentage of ownership for just an investor.
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Bilal Ahmad, 21 Jul 2010 @ 8:03am

Facebook and Zuckerberg is trying to play safe here. I think they believe in the power of silence to confuse everyone and take hold of their ground in the end.
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Sean T Henry (profile), 21 Jul 2010 @ 9:38am

Re:
It is a contract that says he owns part of the company I do not see how there the statute of limitations can be applied unless it has a specific ending date for the contract to where he will turn over his assets to the company.
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Andrew D. Todd, 21 Jul 2010 @ 9:41am

At What Wages?
In 2003, Mark Zuckerberg's labor must have been worth at least fifty or a hundred dollars an hour. Remember, he was a child programmer, someone whose programming skills by the age of eighteen were on the same order as those of the average person with a Masters in Computer Science. Microsoft and AOL had both tried to recruit him out of high school. If he had wanted some extra cash doing something interesting, connected with academic research, say cognitive science or biological systematics, I'm sure that Harvard would have found him something to do at ten or twenty dollars per hour. Paul D. Ceglia would not be entitled to the academic discount, of course. In those terms, a thousand dollars would have covered a "quickie" project that Zuckerberg expected to do in a day's time, bearing in mind that young men like that can work sixteen hours a day.

By contrast, Ceglia's contract, on its face, involves something big enough that it would take several months to deliver, not something small enough to be delivered overnight. It implies that Zuckerberg was to work for something on the order of one or two dollars per hour, not even minimum wage. That is the inexplicable thing.

http://en.wikipedia.org/wiki/Mark_Zuckerberg
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Anonymous Coward, 21 Jul 2010 @ 10:12am

The more I hear about the beginnings of facebook the more zuckerberg seems shady.
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Anonymous Coward, 21 Jul 2010 @ 12:39pm

Zuckerberg at least admits to working for Ceglia.
http://www.theregister.co.uk/2010/07/21/ceglia_facebook/

What's confusing? Ceglia wanted a program for some potential insurance photos thing/business idea of his. He found Zuckerberg on Craigslist, hired him, and signed a contract, for $1000 for the project. Zuckerberg happens to be working on some project of his own at the same time, too, but needs more money to help get it off the ground. He mentions it to Ceglia, and asks him to invest. Some minor project, to be sure, so why not? Ceglia agrees, invests $1000 in return for a 50% stake, +1% per day it's late past the due date of Jan 1, 2004. They stick it all into one single contract. After all, it's just 2 little projects. (who knew?)
Zuckerberg launches Facebook in Feb 2004, apparently 34 days past the Jan 1 due date, coming to an 84% stake, as per the contract.

Timing seems right, and a deal on 2 minor projects at the same time doesn't seem out of the ordinary. What's confusing and what timing doesn't seem right, Mesnick?

I'm not saying it's all legit, but at least part of it is.
Zuckerberg really did do some work for hire for Ceglia. The rest at least makes sense. What doesn't make sense, is why Ceglia has waited for over 6 years to make his claim, unless he was deliberately waiting to see how well it did or didn't do.
I doubt the guy would have paid cash, so bank records from back then shouldn't be too difficult. A record of a single check for $2000 to Zuckerberg would go a long way to at least partially proving this guys claim.
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Anonymous Coward, 21 Jul 2010 @ 9:12pm

Limitations
No doubt FBs lawers are trying to do right by their client, regardless of whether or not there is any merit to the claims, if they can call statute of limitations and have the case shut down it is easier and cheaper for FB.
If that fails then they will start looking at what, if any, merit Ceglia's claims have.
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keyonna wilson, 29 Jan 2011 @ 2:42pm

y wat did ebery body do we talk to everyone we dont usauly fight and dont put the wilsons in this they are amazing we all r a family so the wilsons r out
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