Legal Commentary

Winklevoss Twins Still Chasing Zuckerberg

By Jeralyn

The LA Times reports on the status of the Winklevoss twins' latest lawsuit against Facebook founder Mark Zuckerberg. They are suing to undo the settlement they reached in 2008, reportedly worth $160 million to the twins, in money and Facebook stock. The case is pending in the 9th Circuit Court of Appeals.

The Winklevosses won't say exactly how much they would seek in their high-stakes grudge fest with the billionaire Facebook founder, but by their own calculations they argue they should have received four times the number of Facebook shares. That would make any new settlement worth more than $600 million based on a recent valuation of Facebook at more than $50 billion.

The Winkelvoss brothers also sued their lawyers who represented them in the original lawsuit. The case was resolved by arbitration, and they were ordered to pay their lawyers the 20% contingency the fee agreement called for. [More...]

Eduardo Saverin, another original partner in Facebook, sued and reportedly received $1.1 billion. The LA Times says legal experts expect the Winklevoss brothers to lose the lawsuit.

Knowing nothing about the case other than having watched The Social Network, which Zuckerberg and others say is "fiction," it's not possible to make an accurate legal prediction. Or to get the negative portrayal the film created of the Winkelvoss brothers out of my mind. So maybe it's not fair for me to say the Winklevoss brothers need to be thankful for their $160 million and move on with their lives. But I'll say it anyway.

Even if the concept for FB was theirs, they didn't build it. Had they proceeded with their "Connect U", using the same formula and coding as FB, it may or may not have become as successful as FB. Many companies that began with a great idea have foundered through poor execution or poor executive decisions made after start-up. The original idea is only a part of what it takes to be a success.

The Winkelvoss brothers may have been inaccurately portrayed in The Social Network. But, having watched it, it's impossible for me to come to any conclusion other than they are about the biggest crybabies ever. One would think if they were smart enough to come up with the idea for FB, they would have been smart enough to come up with another ground-breaking idea in the decade since then. Most geniuses have more than a single idea.

To me, the question is, assuming the Winklevoss' did come up with the idea for Facebook, how much is that idea worth? How many hours did the Winkelvoss' put into Facebook after it launched? None. How many hours did Zuckerberg and his subsequent team put in? Every single one. How can the Winklevoss brothers claim that the success of the Facebook is due to their idea, as opposed to the strategic decisions of how to move FB forward? Had they been equal partners with equal decision making authority in FB after it launched, it's possible they would have made decisions that caused FB's demise, rather than its success.

The Winklevoss brothers say its not about money but principle. Since Zuckerberg can afford to pay them much, much more just to be done with the nuisance of their continued lawsuits, it must be about principle for him too.

The Winklevoss brothers should concentrate on winning their next Olympic rowing bid and be grateful for the settlement they received. Their 15 minutes is so over.

Full post as published by TalkLeft on February 25, 2011 (boomark / email).