Facebook Wants Ownership Case Thrown Out

crimeandpunishment writes "Attorneys for Facebook and a New York man claiming majority ownership of the site faced off in a Buffalo courtroom Tuesday, and if Facebook gets its way there won't be too many more days in court. The site wants to get Paul Ceglia's claim thrown out of court. He claims a seven-year-old agreement with Facebook founder Mark Zuckerberg entitles him to 84 percent of the company. Facebook acknowledges Ceglia and Zuckerberg worked together, but says the contract Ceglia submitted was full of 'things that don't make sense.'"

Comments

like wookies

[lostros]

It's the chewbacca defense! look at the monkey, look at the silly monkey

Re:like wookies

[Bieeanda]

Worse, it's the Chewbacca offense! The judge will have to cede the 84%, if he doesn't want to have his arms pulled out of their sockets!

make sense?

[dAzED1]

well maybe not now, when it's "worth" so much, but back then when he was just a thieving punk kid with no money the relationship was beneficial to him. Contracts don't need to be written by lawyers to be legally binding.

Re:make sense?

[Anonymous Coward]

Tell that to the lawyers, er, I mean judges.

Re:make sense?

[tywjohn]

Right. It doesn't make sense much like the Facebook ToS.

Re:make sense?

[Fnkmaster]

What I don't get is why would they even *think* of letting this get to court. Seriously. Even if the guy's chance of prevailing is only 10%, the downside risk is absolutely gigantic for Zuckerberg, AND for the venture capital guys that have put up a lot of money for Facebook.

Knowing as they do that the signature is legitimate, they should have offered this guy 10 or 20 million bucks to just go away rather than taking the risk that this guy will end up seizing a big chunk of equity.

Also shows you how absolutely useless the "due diligence" is that VCs perform. Zuckerberg probably never disclosed this old contract from the early days to any of his investors or they would have forced a settlement with this guy before things got this far. I've gotta think they are squirming just a bit right now.

Re:make sense?

[Surt]

Are you telling me the VCs wouldn't have a contract with Zuckerberg that says he owes them absolutely everything if he failed to disclose a prior contractual obligation materially affecting the company? That would be crazy stupid if true.

Re:make sense?

[Beardo the Bearded]

Yeah, that's just stupidity on FB's part.

"Look, you've got a claim to 84% of something that's not worth a lot of direct cash. You'll have to prove it in court. After maybe five years of appeals, you'll be exhausted personally and financially, and you'll have at most, 25% chance of having this work out. You can spend millions to maybe make millions.

"Or, if I can direct your attention to this new contract and cheque for X million dollars, we have another option available..."

Re:make sense?

[neoform]

Knowing as they do that the signature is legitimate, they should have offered this guy 10 or 20 million bucks to just go away rather than taking the risk that this guy will end up seizing a big chunk of equity.

How do you know they didn't?

Maybe they offered $50M and the guy said, "I want a billion"..?

Re:make sense?

[schmidt349]

Wait, wasn't he supposed to have stolen the idea from a couple of millionaire playboys? Or wasn't it that guy who thought he was interesting enough to write an autobiography right after getting out of college? Or wasn't it one of the many predecessor sites he stole the idea from? I'm confused, you're going to have to help me out. If he stole the idea, whose idea was it to begin with again?

Re:make sense?

[LordKronos]

Knowing as they do that the signature is legitimate, they should have offered this guy 10 or 20 million bucks to just go away rather than taking the risk that this guy will end up seizing a big chunk of equity.

How do you know they didn't? If this guy believes he has a really good case, he'd probably want a heck of a lot more than 10-20 million to settle. If he wins, he may stand to gain 10-20 (or more) BILLION based on facebook's valuation

Re:make sense?

[phantomfive]

It could be the VCs want it to go forward. Zuckerberg right now maintains the majority share (that's my understanding), and I'll bet he's a pain to work with. Suppose this guy gets 85%, he's not going to want to run the company, he's going to let the VCs do it. Major win for them.

How much money do they stand to lose? as long as they don't own more than 15% of the company (collectively), probably nothing. The loss is going to come out of Zuckerberg's share; they can sue him for fraud for not disclosing the existence of that contract. Even if they do own more than 15% of the company, they will have a way better chance of taking the company public and getting an instant payout which they've wanted to do for a while. It will give them a profit and free up their capital to invest in other projects.

Re:make sense?

[TooMuchToDo]

You're forgetting. Most attorneys, if they think you have somewhat of a decent case, also have VC money that gets used to fund a civil suit. So it's VC vs VC. Who has deeper pockets is the question.

Re:make sense?

[blair1q]

Contracts don't need to be written by lawyers to be legally binding.

No, but it helps. A lot.

Lawyers know what things have to be in a contract to make it a contract. IANAL, so a little wikipedia check (ymmv) shows it's these things:

        * Agreement (Offer and Acceptance)
        * Capacity to contract
        * Consideration
        * Legal purpose
        * Legality of form
        * Intention to create legal relations
        * Consent to contract
        * Vitiating factors: Mistates, undue influence, misrepresentation, duress

If Ceglia covered all of those things in this one, then he's got a valid contract and is going to score.

if he missed even one, or if he failed to carry out some of them, then he's going to become a trivia question.

From the claims he's made, it sounds like he has the basics down. It's claimed the thing was signed, so the offer was made and accepted (in fact, it sounds like Zuckerberg made the offer). Capacity: if Zuckerberg was 18 and owned the website, that's enough. Consideration: Ceglia traded money for ownership rights; so both sides got value from the deal, and fair value at the time, plus the agreed-upon increase in ownership as the project was delayed. Purpose and form: simple trade of cash for ownership; an investment; happens all the time without event. Intention to create legal relations: it's not as though anyone was forced or tricked into this. Consent: Zuckerberg was the one who entered into the deal.

So it's down to what wikipedia calls Vitiating Factors, and that's where his lawyer is going to go. Things like the amount of time Ceglia waited, any informalities or irregularities in the documents, etc. And really, given the current value that Ceglia is chasing and Zuckerberg stands to lose, lawyers can find a lot of potentially vitiating circumstances to tie up the case in court.

The judge who gets the case first may skip all that and render summary judgment based on the hard evidence. Which I haven't seen so I won't play judge, yet.

Hopefully Zuckerberg will realize he's actually bound to comply with his agreement, and will find a way to settle with Ceglia. I doubt Ceglia will take less than 50%, but I won't be surprised if he takes that if he's offered it, and let the production delays slide. Unless he's hung up on a few $billion here and there...

Re:make sense?

[blair1q]

Depends on his lawyers more than him.

They'll be looking at hundreds of millions of dollars in legal fees, no matter how long it takes. And they can offer to work on contingency.

If they believe it's righteous, they won't let anyone offer him X million. It's going to be a big chunk of the company, or it's going to go to court.

In truth, depending on what the VCs own, it may end up being only a big chunk of Zuckerberg's personal share of the company.

Though the fact that Zuckerberg may not have had the right to enter into deals with the VCs, since Ceglia may be the true owner of the company, may end up costing Zuckerberg all of his nut.

This isn't going away for 8 figures.

Re:make sense?

[blair1q]

Stealing an idea doesn't make the company the property of the person with the idea. It might give that person rights to some back-payment of royalties, but that'd be it.

This is a contract that gives Ceglia 50-84% of the company itself, based on developing the idea.

Re:make sense?

[HarvardAce]

well maybe not now, when it's "worth" so much, but back then when he was just a thieving punk kid with no money the relationship was beneficial to him. Contracts don't need to be written by lawyers to be legally binding.

Zuckerberg had turned down an offer to work with Microsoft on MP3 playing software ("Synapse") for hundreds of thousands of dollars when he was still in high school. While I know he worked with the Ceglia guy on streetfax for something like $1,000, I doubt he would have sold half of an idea like facebook for merely $1,000, especially since Ceglia was offering absolutely nothing other than the $1,000 -- Zuckerberg would be doing all the work.

Re:make sense?

[BitZtream]

Zuckerberg probably never disclosed this old contract

And thats yet another reason Zuckerfuck needs to be put in jail. Not disclosing the contract most certainly makes every move the Z douche has made illegal, he's commited SO much fraud I doubt he can tell where it starts and where it ends. He's been selling bits of a company that he doesn't even own a controlling interest in thanks to how he was attempting to rip someone else off.

When Facebook got money, the concept of DD for an Internet company was something along the lines of 'is the site up right now? Yea? Good enough for me!' Or 'No? Ehh, its a website no big deal we can fix it tomorrow, thats Good enough for me!

If this turns out to be legit, there are going to be several VC companies that will rape him over this, rightly so.

Can we please just put a bullet in his head and save everyone a lot of money and time?

Re:make sense?

[HarvardAce]

Also shows you how absolutely useless the "due diligence" is that VCs perform. Zuckerberg probably never disclosed this old contract from the early days to any of his investors or they would have forced a settlement with this guy before things got this far. I've gotta think they are squirming just a bit right now.

Or maybe there was nothing to disclose, because Zuckerberg's only contract with Ceglia was for $1,000 to work on Streetfax, with no mention of facebook at any time. Would you want to give $10 to $20 million to any person who came up with a supposed contract with Zuckerberg? If facebook just started handing out money like this, you'd get more people coming out of the woodwork claiming similar contracts, when all they did is create a similar contract using the signature from the supposed contract currently available at http://i.cdn.turner.com/money/2010/07/13/technology/facebook_lawsuit/facebook_filing.pdf?

Re:make sense?

[HarvardAce]

According to the book The Facebook Effect, Zuckerberg only owns 24% of the company at this point. Or at least that's the citation on that number on Facebook's wikipedia page.

Re:make sense?

[BitterOak]

It could be the VCs want it to go forward. Zuckerberg right now maintains the majority share (that's my understanding), and I'll bet he's a pain to work with. Suppose this guy gets 85%, he's not going to want to run the company, he's going to let the VCs do it. Major win for them.

Depends if the 85% is a just a percentage of Zuckerberg's stake in the company, or 85% of the whole company, in which case he'd get a sizable chuck of the VCs' stake as well. That would suck for the VCs.

Re:make sense?

[Anonymous Coward]

Hopefully Zuckerberg will realize he's actually bound to comply with his agreement, and will find a way to settle with Ceglia.

Hopefully? Hopefully Ceglia will acquire Facebook and as a result Facebook goes down in ruin, obliterated in full.

Ceglia is Gandalf. Zuckerberg is Sauron. And Facebook is Orodruin, or Mt. Doom, the pinnacle of Mordor.

The veiling shadow that glowers in the East takes shape. Sauron will suffer no rival. From the summit of Barad-dur his eye watches ceaselessly. But he is not so mighty yet that he is above fear. Doubt ever gnaws at him. The rumor has reached him. The heir of Facebook still lives.

//because I can.

Re:make sense?

[CptNerd]

Hopefully Zuckerberg will realize he's actually bound to comply with his agreement, and will find a way to settle with Ceglia.

Hopefully? Hopefully Ceglia will acquire Facebook and as a result Facebook goes down in ruin, obliterated in full.

Oh, c'mon, there must be a pony in that pile somewhere !

Re:make sense?

[zippthorne]

What good would that do? He can owe all he wants. There wouldn't be assets under his control to cover that debt.

Re:make sense?

[Legion303]

Whose idea was it to centralize a location where college kids could keep in touch with one another? I don't know. We were doing it on VAX/VMS back in the early 90s before it was migrated to an OSF2 system. Long before that it was probably the direct successors to ARPANET. Zuckerberg is a newbie.

Re:make sense?

[zippthorne]

Erm.. Ceglia is Saruman. He doesn't want to destroy the precious. He wants to have its power for himself.

Re:make sense?

[Anonymous Coward]

This is a B.S. ride.

What is being suggested here is that a VC started up Facebook. I would imagine that the VC can no longer grant the cash drawer to Face.

Facebook thinks that they are going to go without a credit to stand on. A credit is not a contract. Facebook thinks that they only do the ink with the purble.

What is the game that has the bubbles again?

Re:make sense?

[lordlod]

The list of requirements sounds really fancy and uses big words but it's actually very simple.

* Agreement (Offer and Acceptance)
One party offers and the other party accepts. As they both signed this one is simple.

* Consideration
This is code word for money. Both parties must get something out of the deal, if only one party benefits it's a gift not a contract. In this instance Zuckerberg got paid and the other guy got ownership.

* Legal purpose
* Legality of form
* Intention to create legal relations
All of these are broadly the same thing, both parties must have intended it to be a contract. In this example the document has contract written across the top, check.

* Capacity to contract
* Consent to contract
* Vitiating factors: Mistates, undue influence, misrepresentation, duress
This are all unusual circumstance clauses. If you are mentally disabled, five years old or currently have a blowtorch being applied to your testicles you can't sign a valid contract. It doesn't seem like any of these apply or are being cited.

In general common sense goes a long way with contracts. If you intend to make a contract, both agree and both benefit you have a contract.

I am not a lawyer but have studied some law at a university level, primarily contracts. If you take legal advice from people on slashdot even if they claim to be a lawyer you are an idiot.

Re:make sense?

[lennier1]

Nope, you'll have to settle for a unicorn.

Re:make sense?

[schmidt349]

A contract alleged by a guy who's currently under federal indictment for fraud alleges he owns 84% of Facebook based on a seven year-old contract he never bothered to assert any rights under and is therefore barred by the statute of limitations. If you believe a damn word that huckster says I have a bridge to sell you on the cheap.

Re:make sense?

[BitZtream]

Freaking awesome.

Now we have lawyers on slashdot ... because they read it on Wikipedia.

Do you guys go to real lawyers and tell them about how you read wikipedia and know how you want to handle your court case?

I'm just curious how long it takes for them to clean out your bank account or laugh you out of the room, and which one happens most often in your case.

I doubt Ceglia will take less than 50%, but I won't be surprised if he takes that if he's offered it, and let the production delays slide.

Why would he do that? If they start making offers for 50%, he knows he's whipped their ass and will hold out for it in its entirety. I would at least, just to spank the ever living fuck out of Zuckerdouche.

Re:make sense?

[LordKronos]

they should have offered this guy 10 or 20 million bucks to just go away rather than taking the risk that this guy will end up seizing a big chunk of equity.

Apparently, Ceglia offered to take a settlement, and the facebook team said no thanks:
http://tech.fortune.cnn.com/2010/07/21/the-massive-hole-in-facebooks-latest-legal-challenge/

"Plaintiff's counsel approached us and offered to discuss ways to make this go away," says Facebook spokesman Barry Schnitt. "We declined."

P.S. Despite the title of that article being "The massive hole in Facebook's latest legal challenge", it fails to mention exactly what the "massive hole" is. It mentions the lawyers have never seen the contract, but then goes on to say the contract was included in the legal filing. It says that the contract occurred before the facebook idea was even thought up, even though the contract clearly references "the face book". I can't see any holes pointed out in that article.

Re:make sense?

[Anonymous Coward]

Disagree. A signed contract means Zuckerberg understood the intent. That is all that matters. The Who, What, How and Why in legal speak is really expected Lawyer to Lawyer or Lawyer to Court. Private Individuals have latitude because they are given grace for not knowing (to a point) the law if both parties were on equal footing at the time the Document was signed.

Re:make sense?

[rtb61]

I see you really just don't understand greedy people. They are greedy, they want it all, they don't just want all their stuff, they also want all your stuff, in fact they want all of everyone's stuff.

In this case it seems like some asshat stole an idea and took that idea to someone else to fund it's development and then stole it again to resell to someone else but retain significantly greater ownership.

You can almost bet the next big stink will be about a whole bunch of stolen code. "They trust me, Dumb fucks" somehow that psychopathic statement seems to be really ring true, perhaps Facebook can use it as their new marketing meme. I really have to think that people, companies and organisations looking to align their image with Facebooks, should step back and take a long hard think about whether it is really appropriate. Anyone just like any other youth driven fade it will inevitably fade to be replaced by the new hot social site.

Perhaps a new open social network site, hosted and linked across many ISP's, with open source code with clear locked into client agreements with pre-defined and limited revenue methods can be created. A place where clients and service providers can safely mix, all absent "They trust me, Dumb fucks".

Re:make sense?

[Anonymous Coward]

Actually it's more likely down to what the State of Massachusetts calls a "statute of limitations." Which is different from a vice of form or capacity. Wikipedia is a terrible lawyer.

Re:make sense?

[Anonymous Coward]

I wrote that. And after re-reading the contract my comment should read "State of NY" though it's six years either way. Note, however, that's six years from breach; not six years from formation (I think).

Still better lawyering than Wikipedia, though IANAL (yet).

Re:make sense?

[SheeEttin]

Ceglia is Gandalf. Zuckerberg is Sauron. And Facebook is Orodruin, or Mt. Doom, the pinnacle of Mordor.

I don't understand this analogy. I've never heard of these kinds of cars!

Re:make sense?

[Anonymous Coward]

Funny since the PDF you linked to mentions "The Face Book". Page 11 under the "Entire Agreement" Section

Re:make sense?

[djlowe]

Whose idea was it to centralize a location where college kids could keep in touch with one another? I don't know. We were doing it on VAX/VMS back in the early 90s before it was migrated to an OSF2 system. Long before that it was probably the direct successors to ARPANET. Zuckerberg is a newbie.

I hereby nominate the parent post for the soon to be announced "First Yearly Most Irrelevant Slashdot Posts Awards", under the category of "Gosh, We Did Something Similar First Back In The Day And I Thought I'd Mention It Though It Has No Bearing At All On The Topic At Hand" category (Subtitle: "Sour Grapes". Sub-subtitle: "Sweet Jesus, Why Didn't *I* Think To Do That On The Internet?!?").

I'm kidding: There'll never be such on Slashdot, especially with that category - there would be 'way too many entries, and I'd be posting my own irrelevancies to every discussion, so as to be able to later flood the award nomination submission queue myself! :)

Regards,

dj

Re:make sense?

[Nikker]

I agree. Lengthy battles over this much of a company are never good the stock will tank before he even gets out of the court room. No shareholder in their right mind would want stock in a company just about to be taken over by someone that's likely to cash out.

Re:make sense?

[HarvardAce]

Funny since the PDF you linked to mentions "The Face Book". Page 11 under the "Entire Agreement" Section

Yes, I know the PDF I liked to includes that. My point is that FB doesn't think that's actually the agreement that Zuckerberg signed. Let's pose a hypothetical situation:

Ceglia posts an ad on craigslist asking for programming help on a new startup called StreetFax. Zuckerberg responds, and they work out a contract that looks similar to the one that was in the filing, except there was never any mention of "The Face Book", "The Page Book" or anything *other* than the StreetFax stuff. They both sign it, Zuckerberg gets his money, Ceglia gets the StreetFax stuff, and then they part ways sometime in 2003 and never speak again.

Fast forward to June of 2010, and suddenly Ceglia is providing a poor quality copy of a contract that looks similar to the one Zuckerberg had signed 7 years ago, but now includes stuff about Face Book that was never on the original contract, and is claiming majority ownership of a billion-dollar company as a result of it.

Now, it may be that the contract in the filing is the actual contract between Zuckerberg and Ceglia, but I find it equally plausible that the contract is a forgery. Zuckerberg's faults have been highlighted here on numerous occasions, and Ceglia apparently was under investigation for alleged fraud with an unrelated business of his. I'm not sure who to believe, but the details of the case that have been made public makes it obvious that no one other than Ceglia and Zuckerberg probably know the truth, and neither has been able to make a convincing case thus far. I will grant that at this point Ceglia obviously has made a more convincing case than Facebook/Zuckerberg, but I'm sure that neither has tipped their entire hand at this point. The fact that Facebook is also going after other avenues (e.g. arguing that even if the contract was the one they both signed, that it isn't valid or the statute of limitations is up, etc.) makes me think that they don't have good evidence that the contract in the filing is a forgery, even if that is what they believe.

Re:make sense?

[Tom]

Lawyers know what things have to be in a contract to make it a contract. IANAL, so a little wikipedia check (ymmv) shows it's these things:

Wikipedia is not an authoritative source on many things. IANAL but contract law was part of my studies. Unless the US is vastly different from most other places, you need exactly one thing for a contract to come into existence. In german "eine beidseitige Willenserklärung", just in case I fuck up the translation: An intentional agreement between two parties.

All the rest, the form, the lawyer-speak, the bla-bla is just to make it easier to enforce. Oral contracts are as good as written contracts in theory, they are just more difficult to prove. A contract on the back of a napkin is as good as a 300-page legal document reviewed by two seperate legal departments - there's just a higher risk that it contains words you didn't mean like that.

Most of the stuff you list falls under the invalidation of "intentional" or "agreement", which are the most common attacks on contracts that you can't deny (e.g. they exist in written form or there are reliable witnesses). If you were tricked, for example, you can argue that there wasn't an agreement, because what the other party wanted and made you believe was not true.

if he missed even one, or if he failed to carry out some of them, then he's going to become a trivia question.

It ain't that simple. Contracts are regularily open to interpretation as it is semantically impossible to completely and 100% perfectly describe a non-trivial intention. Courts are used to that and it's not a checklist. "Oh, wrong word in paragraph four. You lost." Quite regularily, the courts try to divine the original intention of the parties, as that is what it's all about, and rule according to that. There are quite a list of famous contract law disputes that worked that out.

But, as you said, the main issue will be that the lawyers on the defending side will try to tie this up in court. I don't see how they can win it, but they sure can delay it. Maybe long enough for Zuckerberg to cash out.

Re:make sense?

[JNSL]

That Z's lawyers are trying to get the case dismissed on statute of limitations grounds has nothing to do with the strength of the evidence or case. It's merely one step in the litigation process. If it isn't thrown out, they'll try other similar things, like removing to federal court, failing to state a claim, transferring venue, summary judgment (multiple times surely), etc, etc.

Re:make sense?

[TheLink]

Has Facebook or Zuckerberg come out and said that the contract doesn't exist or is fraudulent?

So far they're just claiming the contract was full of stuff that doesn't make sense. That's a rather weak rebuttal don't you think?

OK the Facebook lawyer has serious questions about the authenticity of the contract? Yeah, go submit those questions to court.

They don't outright state the contract is invalid. I guess they're covering their butts just in case Zuckerberg "forgot" to tell them yet another little detail...

Zuckerberg doesn't seem that squeaky clean a character either.

Do contracts automagically expire after 7 years? I doubt it. If it's about exerting rights, lots of shareholders don't do much with their rights, but they do get interested if the CxOs start talking about selling the company without giving the shareholders their "fair share".

Re:make sense?

[Surt]

In theory, it would have motivated him to avoid this situation. And realistically it would actually be likely to recover all the VCs investment, if not their profit.

Re:make sense?

[Anonymous Coward]

There's a statute of limitations on ownership? How does that work?

Re:make sense?

[moronoxyd]

You're making the mistake of looking at it from todays POV.
Back then, neither Zuckerberg nor Ceglia knew that "The Face Book" would be worth a billion Dollar down the line.
Note that Zuckerberg intended it to be for his university only.

and yes, Zuckerberg was supposed to do all the work and Ceglia only gave some money. That's exactly who funding projects work. One party has the idea and usually does all the work, and the other party gives some money and get's more money back in return.

Re:make sense?

[shitzu]

It really doesn't matter if the contract makes sense. If he signed a contract that did not make sense, whe else is there to blame except himself?

And - shouldn't the current owners be footing the legal fees, not Facebook itself?

Re:make sense?

[Xarius]

They'll be looking at hundreds of millions of dollars in legal fees, no matter how long it takes. And they can offer to work on contingency.

Why should any legal process ever cost this much? It's obscene and I doubt the costs actually represent the real value of the process...

Re:make sense?

[JohnRoss1968]

After reading this comment I have no choice but to shoot myself in the face.

Re:make sense?

[Anonymous Coward]

He hasn't just started complaining about this situation. He was making ownership claims 7 years ago, when facebook wasn't worth anything. Seems that Zuckerburg nicked some or all of the codebase and started facebook. I think the guy has a case and has been doing the right thing all along. Zuckerburg should have offered to buy the codebase a long time ago, before the company made so much money but I get the feeling Zuckerburg is actually a bit of a rat, and not really all that bright.

Re:make sense?

[Methuseus]

Because lawyers rule this country. Have you noticed how hard it is for a politician to make it if he or she doesn't have a law degree?

Re:make sense?

[shaitand]

Assuming their investment is less than 14% of facebook... Zuckerberg can't give them or have legally signed a contract to guarantee them what isn't his. That fact could invalidate the contract altogether depending on how it is worded.

Re:make sense?

[shaitand]

"Though the fact that Zuckerberg may not have had the right to enter into deals with the VCs, since Ceglia may be the true owner of the company, may end up costing Zuckerberg all of his nut."

That could work the other way. If the deals are invalidated so is Zuckerbergs obligation under them.

Of course they'll sue him. If he could claim he entered the agreement in good faith he might get out of it but its hard to claim you didn't know about an agreement you signed.

Re:make sense?

[helix2301]

Yeah I agree with you but its going to take a lot of convincing and good attorney to get a judge to award you 84% of a 4 billion dollar company. Contracts can defiantly be verbal or hand written but its going to take a lot for this to stand up in court.

Re:make sense?

[Anonymous Coward]

There are certainly aspects of the case to doubt, but there are also a lot of facts that make me think this guy's claims could be legit:

He made the claim during a relatively quiet period for Facebook- there is no pending IPO, no big investments or valuations recently announced, etc. If anything the media seems to be turning against Facebook lately.

He claims he has an actual paper document with a contract between Zuckerberg and himself. Usually hucksters don't make such bold claims. They may claim some patent, or that the idea was stolen, or a host of similar intangible things, but this is a guy saying "I have in writing that zuckerberg agreed to give me a stake in the company." Clear and simple. At the outset that was a bit unusual. Facebook's response then gave an ocean more credibility to this guy when they didn't reply this guy was a crackhead, only that the statute of limitations had passed, and later that they aren't sure Zuckerberg ever signed it. If the guy can show the alleged transfer of funds at that time, Zuckerberg is in big trouble- there is nothing in contract law that requires a signature, it just helps a lot. A transfer on or around the time the contract was drafted between the two parties is a good case that there was a "meeting of the minds" and an exchange of value ("consideration") between the two parties. The transfer will also show performance, at least on Ceglia's side. The big sticking point then will be what terms were agreed to, not if there was a contract at all. Google contracts business law- contracts have a few basic elements and in no way require mind numbing legalese- the legalese often just makes things a lot more precise so if things go sour and they are challenged after the fact, who was supposed to do what and what happens if they don't are very clear- though not that that stops from lawyers quibbling over every little thing in court and racking up their billable hours.

Zuckerberg was what? 22 at the time? 22 year old's do dumb things like sign contracts and try to ignore them later, especially upper middle class white kids from the burbs who tend to think they are entitled to a nice cushy lifestyle. He had a website that had some local popularity, that wasn't a business, and little else to offer. You know what this is a case of? The one in a million shot little pet project that turns into a billion dollar business, and was treated in the beginning as a pet project, not a business.

The doubts:
The lawsuit alleging fraud. Definitely a big red flag.Surprisingly no news outlets have dug deeper here. If the guy has a legitimate business, disputes arise all the time. If the guy was trying to start a business, and it went sour, I could see this suit happening as well. Then again the guy may have just took money in bad faith and ran off with it. Again, I am surprised no one has looked into this deeper.

Its not clear if anyone has actually seen the alleged document, and if it is signed or not. It seems specific clauses have been lifted from it and been put in the press, but I don't know if anyone has seen the original. If a copy of the document is not released really soon, my confidence that this guy has a case is going to drop tremendously.

It took so long for him to make a move. Why now, 7 years later? He was a web designer so its hard to make a case that he was too naive and disconnected from the digital world to realize FB had blown up. Its possible that he may have only found the contract recently or something, but the long lag is probably the biggest red flag imho.

Last and least- the statute of limitations. The statute didn't start running when he signed the contract, so this should be easy to get around. Any decent lawyer can get around a statute of limitations, especially if they have hard evidence- the spirit of the statute of limitations is that evidence gets stale, people's recollections get fuzzy over time, etc.

Re:make sense?

[Anonymous Coward]

In college, $1000 is a lot of money. In college, $1000 for a stake in your little pet project that is reasonably popular at your smallish college is a nice amount of money. Sure, he went to Harvard and had a lucrative future in front of him, but money that *might* be coming in the future is not nearly as attractive as money in hand today. Hearing some other stories about Z, he seemed like a typical early 20 something and prone to taking the quick gratification.

Try to put yourself in his shoes and remember the times- the .com boom had just imploded. The time for million or billion dollar killings seemed to have passed, and getting a quick grand for a piece of your local website probably seemed attractive. Z may have had little intention on expanding the website.

As someone who started a few websites when he was young and poor, right after the .com boom, his actions seem VERY feasible to me.

Re:make sense?

[inode_buddha]

prove that last sentence of yours.

Re:make sense?

[inode_buddha]

You're funny. Or at least, an optimist. What makes you think that Zuckerberg isn't playing by the *exact same rules* that the VC's are playing by?

Re:make sense?

[Kevin Stevens]

HarvardAve pointed out a link with a copy of the filing below- which includes a copy of the signed contract.

The contract seems to be a typical one lifted from a form book, with a few small hand written amendments that are illegible in the pdf. It is signed by both parties, and the terms seem very clear- I was under the impression this was drafted by ceglia himself.

I am now changing my position- unless this is an outright forgery, this claim seems 100% legit- they even state the name as "the facebook."

It appears he has a legitimate ownership stake in Facebook.... WOW.

Re:make sense?

[Drathus]

based on a seven year-old contract he never bothered to assert any rights under and is therefore barred by the statute of limitations.

Contracts start and end, but have nothing to with a Statute of Limitations in and of themselves.

Breach of a contract has a seven year period under New York law; however that would be from when the breach occurred. Which is entirely possible to be when he contacted Zuckerberg asking who he was going to sell "their" website to, and how much they looked to make. As soon as Zuckerberg would have responded "You don't own anything" the breach timer would start. Not from when the contract was signed.

(That's all of course asuming that those events happened, which I'm not saying they did.)

Re:make sense?

[Anonymous Coward]

I wrote that. And I'm a big dork.

Re:make sense?

[Surt]

But he can sign two separate contracts:
1) giving them XX% of facebook for the vc money
2) giving them all of his assets in the event he failed to disclose anything to them in any way in contract 1.

I don't know if they actually did such contracts, but if I were making a huge investment like that, I'd certainly have done so, and I hope a competent contract lawyer would suggest it if they were my paid advisor.

Re:make sense?

[Skjellifetti]

Perhaps a new open social network site, hosted and linked across many ISP's, with open source code with clear locked into client agreements with pre-defined and limited revenue methods can be created.

That was last year's model.

Re:make sense?

[Surt]

Well, because the VCs were the powerful side in the original contract negotiation. I assume they had competent lawyers advise them before making multi-million-dollar investment decisions. I know the VCs who invested in my startup did. They have hugely favorable contracts that do their best to protect them from all kinds of malfeasance the startup partners could have gotten up to.

Re:make sense?

[mzs]

It gets stranger. There was a thefacebook.com created then, under this contract. A short while later Zuck created facebook.com allegedly using the same ideas and code.

Re:make sense?

[mzs]

There isn't, nor does it run from when the contract was signed. There is a statute of limitations on when you find out you have been had, that is when the timer starts running, then you need to act before memories get fuzzy. In this case I guess that Ceglia is claiming that for a few years he actually believed that he did in fact own that stake and only later when he learned of more VC, sales, and IPO rumblings did he get worried Zuck did not intend to honor that stake.

Re:make sense?

[mzs]

"My point is that FB doesn't think that's actually the agreement that Zuckerberg signed."

No FB or VC attorney has made such a claim that I know of. That said they may claim that later. This attempting to get the contract thrown-out is just one of the first steps in a LONG process.

Re:make sense?

[Aaron5367]

Thank you for your analogy, it has helped me make sense of this confusing situation.

Re:make sense?

[hexadecimate]

I wrote about an idea for exactly that sort of award (well, almost exactly) back in 2002, you insensitive clod!

Re:make sense?

[cHiphead]

The real question is how do we keep these damn kids off our lawns?

Re:make sense?

[hexadecimate]

If you take legal advice from people on slashdot even if they claim to be a lawyer you are an idiot.

Thanks for the advice!

Re:make sense?

[david_thornley]

The US and British legal systems are significantly different from those in most of the rest of the world, which can cause a lot of problems. In the US, if my old business law book is to be relied on, there's also the question of consideration. I can give you something, or I can contract to sell something, but I can't make a binding contract to give you something later with no tangible gain for myself.

Moreover, there may be other laws that pertain. There are fifty-one governments that write contract law in the US (not counting Puerto Rico and other possessions), and innumerable courts that create binding and non-binding precedent. (Federal law is not the same across the country, which surprised me when I found out about it, but each circuit has an appeals court, and they don't all agree.) Law in the US can get quite complicated.

Re:make sense?

[Anonymous Coward]

Certain aspects of law are mind numbing- but the basics of contract law are NOT, and you just automatically conceding like Barbie that "Law is Hard" just subjugates yourself and prevents you from asserting your rights.

Yes my knowledge of law is based upon business law classes I took in college, but I have affirmed w/ my lawyer friends that what they teach is true and applicable to real life-which makes sense it was taught by a lawyer and the whole goal is to make you informed enough about legal issues to run a business. The technicalities you often hear about blowing a case really only exist in the criminal world where the plaintiffs are held to very high standards. Most civil case law is built upon "reasonable man" tests where the judge will look at what the intention of the two parties was. Its really rather reassuring, there is a very human side to it and judges will often take into account the sophistication of the two parties. If one side is clearly outpowered by the other (IE little guy representing himself vs a large legal team) the judge may get angry if the legal team tries to drown the little guy in motions, delays, and paperwork. A friend of mine does labor law defending workers, and "big law firm" tricks meant to try to bog the worker's case down are generally treated quite harshly.

Re:make sense?

[Spectre]

The primary difference between a contract written by a lawyer (or a legal department/team) and one without it is this: The contract written by lawyers is easier to get out of. Lawyers put in lots of fiddling language that they can argue the exact meaning of if there is a dispute, drawing out a resolution for years. If a contract was prepared without lawyers, the intent is generally quite obvious. This makes the contract far more ironclad, and possibly painful if somebody changes their mind later and wants out of the deal.

Much like a check, a bill-of-sale, a will, or any other legal document, what you need for it to be binding is:

• consideration, usually a dollar amount (hence the common "$1" in many contracts for an exchange of services - the dollar amount guarantees a consideration contains value)
• a date specifying when the document is being executed (useful as later documents can supercede earlier ones)
• what services/goods are being delivered by whom and to whom
• signatures of the people being obligated to pay or provide goods/services
• optional, but helpful: signatures of witnesses to the document being executed (preferably notaries, who have been trained to attest that "yes, the signers provided documentation establishing their identities, their legal status as adults, and that they signed of their own volition")

It isn't rocket science.

Re:make sense?

[Albatrosses]

The holes aren't so much pointed out in the article, as they are in the article.

Re:make sense?

[easterberry]

Wait. Are you telling me people who make laws usually have law degrees? because that just seems flat out unlikely to me.

Re:make sense?

[jdgeorge]

If you take legal advice from people on slashdot even if they claim to be a lawyer you are an idiot.

Thanks for the advice!

More to the point: Thanks for the common sense advice to seek legal advice from somewhere other than Slashdot.

Re:make sense?

[Actually, I do RTFA]

Even if the guy's chance of prevailing is only 10%, the downside risk is absolutely gigantic for Zuckerberg, AND for the venture capital guys that have put up a lot of money for Facebook.

The VCs should be fine. I mean, they bought X% of Facebook from Facebook. That is, they diluted the previous owners. Now, maybe if this guy wins his case, he can say Zuckerberg couldn't have made that deal with the VCs and try to squirm out of it, but I don't know if that case would go anywhere.

The investment firms who bought Facebook stock from Zuckerberg might be pretty screwed though.

Re:make sense?

[Actually, I do RTFA]

Why should any legal process ever cost this much? It's obscene and I doubt the costs actually represent the real value of the process...

Because the upfront costs are too high to bear, so they agree to do it for free if they lose, or a percentage if they win. In essence, we insure very good lawyers can work for poorer people by allowing them to invest (via sweat equity) in the outcome of a case. It's usually capped at 33% to avoid the lawyers taking too much advantage of their clients.

Or, you can just pay a lawyer by the hour. But it's likely to take quite a bit of cash (at $200/hr, fairly cheap for a lawyer, that's still $400,000 per man year).

Re:make sense?

[Anonymous Coward]

Ceglia is Gandalf. Zuckerberg is Sauron. And Facebook is Orodruin, or Mt. Doom, the pinnacle of Mordor.

And you're a sad little dweeb. I'd hate FB, too, if I was as friendless as you.

Re:make sense?

[Anonymous Coward]

Is that a car analogy?

Re:make sense?

[Catiline]

Perhaps a new open social network site, hosted and linked across many ISP's, with open source code with clear locked into client agreements with pre-defined and limited revenue methods can be created. A place where clients and service providers can safely mix, all absent "They trust me, Dumb fucks".

You mean like the Diaspora Project?

Re:make sense?

[HarvardAce]

No FB or VC attorney has made such a claim that I know of. That said they may claim that later. This attempting to get the contract thrown-out is just one of the first steps in a LONG process.

Exactly. They haven't officially made that claim at this point, but I definitely believe that they don't think it's real. They are keeping all of their options open -- if they can get the suit thrown out without going into the authenticity of the contract (e.g. statute of limitations or an unenforceable contract), then that's probably the best bet for them, as proving that the contract is not authentic may be considerably tougher.

Re:make sense?

[HarvardAce]

P.S. Despite the title of that article being "The massive hole in Facebook's latest legal challenge", it fails to mention exactly what the "massive hole" is. It mentions the lawyers have never seen the contract, but then goes on to say the contract was included in the legal filing. It says that the contract occurred before the facebook idea was even thought up, even though the contract clearly references "the face book". I can't see any holes pointed out in that article.

The "massive hole" is that the plantiff has not provided an original (or even well-reproduced) copy of the contract. What Zuckerberg is claiming is that the agreement that he and Ceglia had was only for StreetFax, and never had anything to do with facebook. The corollary to that is that the references to "the face book" on the contract that Ceglia provided is a fake and were added after the fact.

According to Zuckerberg:
1) Ceglia responded to Zuckerberg's ad on craigslist for a programmer in a work-for-hire contract.
2) The two signed a contract for StreetFax, Zuckerberg did the work, Ceglia paid him, and that was that, ending around late summer of 2003.
3) Zuckerberg came up (or stole from ConnectU, depending on who you ask) the idea for facebook in Fall 2003 and finished the implementation with thefacebook.com in Feb 2004.
4) 7 years later, Ceglia produces a modified version of their original contract that now includes references to "The Face Book" that were not there originally.

One of them is obviously not telling the truth. Whether Zuckerberg's claims and the fact that Ceglia has not provided the original for facebook's inspection put a "massive hole" in Ceglia's case is of course open for discussion.

Re:make sense?

[blair1q]

It's because the legal system allows it to happen.

Of course you can instantly see the conflict of interest there, since it's the lawyers, who become judges and legislators, who make the decisions about how the legal system will work.

A good judge will direct lawyers to stipulate their agreement to obvious facts, but even that isn't foolproof, and there are a lot of ignorant judges.

The use of precedent stifles a lot of argumentative retracting of history, and generally keeps the law consistent. But slight differences between this case and the precedents may unzip any number of issues for argument. Once a case is opened the disagreement about the smallest details and tiniest bits of evidence can be expanded to soak up all of the money available,

And there's little a defendant or plaintiff can do about it. He can fire his attorneys, but since that means starting over it rarely seems the economical choice. Or he can sue them after the fact for various forms of sandbagging or incompetence or malpractice, but that also rarely seems to be an economical strategy.

Re:make sense?

[blair1q]

But we don't know what would have happened to Gandalf if he'd had to destroy it himself.

His intentions in gaining it to destroy it would be honorable, but clearly it doesn't want to be destroyed, and it is very powerful in changing its owner's mind to get what it wants.

Gandalf knew that. Hence the need to send a less-dangerous-when-corrupted individual to peform the task.

So Ceglia can still be Gandalf, making a different choice this time.

As for Zuckerberg, he's more of a Smeagol than a Sauron. I mean, he's got it, and look what it's done to him.

Re:make sense?

[blair1q]

If you take legal advice from people on slashdot even if they claim to be a lawyer you are an idiot.

Thanks for the advice!

Conversely, if you take idiotic advice from people on /. you are a lawyer.

Re:make sense?

[blair1q]

Every time I've tangled with a lawyer who disagreed with me I've beaten him to a pulp.

Lawyers tend to think as you do, that because they're lawyers they can be sloppy with their facts and arguments and win by force majeure or by casting spells of bufuddlement.

I'm smarter and mentally tougher than the average layman, and know a bit more about the law, legal procedure, and the craft of lawyering than they expect, so they trap themselves with overconfidence and then lose on the merits.

On the other hand, the one time I've left everything up to the lawyer, the judge actually stopped the proceeding, pointed out his mistakes, and told me what to do to get a result in my best interests. So just walking into your lawyer's office and giving him control is as big a mistake as ignoring his advice.

Re:make sense?

[blair1q]

Wikipedia is not an authority on anything, but I didn't have the list of 7 elements of a contract in my head, so I referenced it. It had 8; the bit about "vitiating" is someone's wikipedial add-on that clumsily comprises all the arguments you can make even if the 7 elements are present.

If you read the wikipedia entry, you do see that they boil contracts down to a short latin phrase, similar to the german one you quoted. It's the basis for all contracts and includes oral contracts. But even an oral contract has to fit the 7-layer-cake model.

It is a sort of checklist, and it isn't notional. If one of the elements is missing or borked it's usually indication that the contract was not valid: mental or chemical incapacitation; not actually having legal authority to contract away the consideration; not actually promising consideration or misrepresenting value of the consideration; etc. You can trace these elements to solid, even prehistoric precedents that can be cited to back up your case. Judges are loath to buck precedent, so your adversary had better have some good vitiation if the element is satisfied.

And that's what I said, really, not that the lawyers will just tie it up, but that they can dig into every available cranny to find things to argue and hope the other side bollixes the counter-argument.

Or the judge could take one look, realize it's going to be a common brawl, and make a summary judgement because there's really nothing indistinct about the contract that could be construed as changing the result.

Re:make sense?

[LordKronos]

That's not a massive hole. The case hasn't yet reached a point where Ceglia's attorneys are obligated to provide such documentation. Zuckerberg's lawyers will get it in due time. Meanwhile, certainly Zuckerberg has to have his own copy of the contract. Simply produce that contract showing it in the original version and THEN we can talk about massive holes.

Re:make sense?

[Ashriel]

No. The people who make the laws generally have MBAs. The people who word the laws almost always have law degrees. And so most of the people who vote the laws into existence (different people entirely from those who word the laws, however).

Re:make sense?

[tqk]

"And you're a sad little dweeb. I'd hate FB, too, if I was as friendless as you."

That's about the fifth time today I've read an FB fan accusing its detractors of being "friendless." You do realize it's possible to have friends sans FB?

Re:make sense?

[shentino]

Right, so I should completely ignore everything NewYorkCountryLawyer says...

Re:make sense?

[Anonymous Coward]

The guy is not only suing for 84% of the company, but also for 84% of anything Zuckerberg got out of it (like 84% of any money he's gotten over the years; probly wouldn't include his salary, but it might include any kind of bonus money the VCs would have offered him for signing, etc.) If his lawyers have managed to put a stop to Facebook transferring its assets, they can probably manage to put a stop to Zuckerberg collecting anything out of it since his ownership is in dispute. So I doubt Zuckerberg can cash out.

Re:make sense?

[Tom]

Which is precisely why I'm sure that stop is the first thing they will try to attack. If you see them doing that, it means even Zuckerberg assumes he will lose.

Doesn't matter

[Monkeedude1212]

Regardless of whether it makes sense or not, a contract is a contract. If a Lawyer can make sense of it - WHAMMO - you're done.

Re:Doesn't matter

[pete-classic]

Ah, but you're forgetting the Chewbacca Defense!

-Peter

Re:Doesn't matter

[houghi]

Unless any specifications in the contract are illegal. At least in Belgium that would mean that that the contract is null and void or at least large parts of it, depending the contract.

Re:Doesn't matter

[DragonWriter]

Regardless of whether it makes sense or not, a contract is a contract.

That's actually not even approximately true. If the terms of a written document purporting to be a contract literally don't make sense (i.e., have a clear meaning), then the agreement may quite well fail to be a contract. The absence of sufficiently clear obligations for either party could, for instance, make the agreement fail to be a contract for lack of mutual consideration. Not making sense could also cause a contract to fail for evidence of an actual agreement on the essential terms of the exchange.

Re:Doesn't matter

[Anonymous Coward]

Unless any specifications in the contract are illegal. At least in Belgium that would mean that that the contract is null and void or at least large parts of it, depending the contract.

In Belgium only the illegal clauses would typically be thrown out. The rest would stand.

Re:Doesn't matter

[Anonymous Coward]

Exactly. I'm guessing they will argue there was no meeting of the minds (each party had a different understanding of what was going on with the contract) and therefore there is no contract.

Re:Doesn't matter

[snowgirl]

I've read through the contract, it does have a bit of stuff that is odd, and inconsistent. (At first it calls the project "The Face Book", but later "The Page Book". However, technical/typographical errors aren't voidable in a contract so long as it is clear what was intended.

The US has a pretty strong policy of assuming a valid contract. Given that it clearly states that Ceglia gets 50% of all software, and business interests, and Zuckerberg gets $1000 for the project, it's pretty clear that an enforceable contract was constructed.

Re:Doesn't matter

[quickOnTheUptake]

Is it possible that they mean it doesn't make any sense, in the sense that, it looks fraudulent?
After reading through it I can't help but wonder about it. I mean for this guy to have signed a check for $1000 to a college kid, MZ must have been able to convince him there was substantial opportunity for profit. But (A) I thought FB was initially only supposed to be for Harvard? I can't imagine there would have been *too* much money to be made on something that limited. But more importantly, (B) for MZ to have made such a convincing pitch he must have already realized he was potentially sitting on a big idea. Was he really so cash strapped that he had to sell 50% of this big idea for a measly 1k? I mean it's not like FB needed a big capital to get off the ground. It probably could run on a 5 year old computer over his dorm network connection.
Further, (IANAL but) the contract looks like it was written by a lawyer. It doesn't look like some form contract that someone pasted into Word and changed the names. Who hires a lawyer to write a contract for a set of transactions totaling $2000?
Anyway, questions like that were popping into my head as I read it. (Obviously, I'm not alleging that it is a fraud, just noting that I'll be curious to see how this plays out if it goes to trial.)

Re:Doesn't matter

[snowgirl]

Further, (IANAL but) the contract looks like it was written by a lawyer. It doesn't look like some form contract that someone pasted into Word and changed the names. Who hires a lawyer to write a contract for a set of transactions totaling $2000?

IANAL either, but I'm a bit more read in the law than some. The contract looks exactly like it was lifted from some other contract not specifically for that purpose, and then edited up some by someone who was not a lawyer. (I've seen a few of these.)

Basically, it looks like a food shoved into a glove.

Re:Doesn't matter

[shaitand]

The problem is that Zuckerberg has lied and claimed he hadn't thought of it yet (although he developed the site the following month) and the contract actually documents the original name of the site he claims he hadn't thought of yet.

The plaintiff has other unrelated credibility issues but the defendant has been documented lying about the content of the contract in question. His word on his intentions in the matter is suspect to say the least.
 

Re:Doesn't matter

[shaitand]

"Was he really so cash strapped that he had to sell 50% of this big idea for a measly 1k?"

Do you have any idea how many potentially big ideas I've had? Of those I've built a few. Of those a couple ended in the green. Of those only one has made more than $1000 and none have made facebook money.

An actual real check for a grand even if the site fails for a kid with a million billion dollar ideas? That is serious bait to a cash strapped college kid and if it does work out, half of a billion is still a nice chunk of change.

Re:Doesn't matter

[Anonymous Coward]

Regardless of whether it makes sense or not, a contract is a contract.

A contract is a contract ... but only between Ferengi.

SO... How do you think it will turn out?

[drsmack1]

I looked into the merits of the case and it seems to me that Ceglia has a valid case and the defendants are using SCO-like defense tactics already at this early point.

Even with that said, it always seems that the guy with the biggest legal fund wins.

So, predict away!

Re:SO... How do you think it will turn out?

[Monkeedude1212]

I predict lawyers will be made very rich, and Facebook will continue on its stead decline of user approval rating. Because we all know that whoever wins, they're going to change the UI again, make uploading pictures more buggy, and mine your data.

Re:SO... How do you think it will turn out?

[phantomfive]

Steady decline in user satisfaction......and steady increase in userbase size and advertising revenue. People may not be satisfied with Facebook, but they will still use it. And I say that in all sadness, wishing they wouldn't.

Re:SO... How do you think it will turn out?

[petermgreen]

Much like ebay/paypal in that regard, the network effects caused by being the biggest site of their type outweigh for many users the bad behaviour of the site operator.

Re:SO... How do you think it will turn out?

[HarvardAce]

I looked into the merits of the case and it seems to me that Ceglia has a valid case and the defendants are using SCO-like defense tactics already at this early point.

You obviously didn't look too hard. From dailyfinance.com:

Ceglia's attorney, Paul Argentieri, says bring it on. He says he offered to show Facebook's attorneys the original contract if they were willing to visit his offices in Hornell, N.Y. "They didn't take me up on my offer," Argentieri told DailyFinance. "They had three weeks to get ready to answer this very basic question. I was surprised by their hesitation."

Ceglia's attorney Argentieri says he will gladly explain why his client waited six- and-a-half years to file his lawsuit when the parties go to trial. He added that his client has plenty of other documents and canceled checks with Zuckerberg's signature.

That certainly makes Ceglia sound more like SCO than facebook here -- Ceglia's attorney is basically saying "we have lots of evidence but we won't show it to you."

The timing just doesn't make sense...Zuckerberg was alleged to have stolen the idea from the ConnectU guys in the fall of 2003, was't he? If this contract is actually legitimate, that would have shown that Zuckerberg had the idea long before he had contact with ConnectU -- or am I misremembering the time frame of the ConnectU stuff?

Full of things that don't make sense ...

[Anonymous Coward]

Don't make sense, as in, someone putting up capital being entitled to a slice of the pie? Hmm.

I predict they are screwed.

Note how they are not denying the existence of the agreement or the authenticity of the signatures on that agreement.

What makes sense and what is legally binding are two different things.

Re:Full of things that don't make sense ...

[mellon]

Apparently you have never heard of dilution...

Re:Full of things that don't make sense ...

[HarvardAce]

Note how they are not denying the existence of the agreement or the authenticity of the signatures on that agreement.

They aren't denying that Zuckerberg had a contract to work with Ceglia. What they are denying is that the contract included any mention of facebook. They believe that the actual contract was only for the StreetFax.com work, and not facebook.

Re:Full of things that don't make sense ...

[snowgirl]

Note how they are not denying the existence of the agreement or the authenticity of the signatures on that agreement.

They aren't denying that Zuckerberg had a contract to work with Ceglia. What they are denying is that the contract included any mention of facebook. They believe that the actual contract was only for the StreetFax.com work, and not facebook.

I doubt that they would be making such a bold assertion, when the contract explicitly includes two parts, one for the StreetFax.com, and another for a different project, describing enough what Facebook was/is, with the "tentative title: 'The Face Book'"

So, if they're going to argue that, then Zuckerberg should have kept a copy of his contract so that his lawyers could actually see it, and they would be smacking him hard up the back of the head for suggesting that they should make such a claim.

Re:Full of things that don't make sense ...

[HarvardAce]

So, if they're going to argue that, then Zuckerberg should have kept a copy of his contract so that his lawyers could actually see it, and they would be smacking him hard up the back of the head for suggesting that they should make such a claim.

He was 18 at the time, and it was 7 years ago. I don't think it's unreasonable to think that he didn't keep good care of the contract, especially if it was only for the streetfax stuff.

Re:Full of things that don't make sense ...

[snowgirl]

He was 18 at the time, and it was 7 years ago. I don't think it's unreasonable to think that he didn't keep good care of the contract, especially if it was only for the streetfax stuff.

You mean, "if he thought it were only for the streefax stuff".

The contract very plainly and clearly states that Facebook is involved. Thus, all references to the contract not referring to Facebook, must be at least in the subjunctive.

Re:Full of things that don't make sense ...

[BitZtream]

What does stock dilution have to do with this? Apparently you have no idea what dilution actually is. Maybe you should read the link you posted.

He had 84% ownership before, you can split it 150000000 times, and he'll still own 84%, he'll just own 150000000 more shares too.

The only way he can loss is by selling part of his ownership. Stock dilution isn't just some loophole that lets you selectively rip people off, in fact it has no effect on anyone who doesn't let it.

I'm going to ignore the fact that you actually have to be publicly traded for it to matter anyway.

Re:Full of things that don't make sense ...

[Maxo-Texas]

I think in some cases it can dilute your earnings, value, or ownership.

Wiki seems to support that too.
http://en.wikipedia.org/wiki/Stock_dilution

I've had some experience with it from "Parlux Fragrances". They used to issue new stock which diluted my shares.
It's apparently legal but reduces people's interest in owning your stock.

I'm not sure if a private company can do this to owners however.

But it might.

You have 84% ownership, but the company must issue new shares to expand. Your ownership is diluted. I'm pretty sure I've seen this happen at some venture capital companies. Basically your choices are bankruptcy (wiping out your position) or dilution.

Either way... sounds like time's are a a changin for facebook.

Re:Full of things that don't make sense ...

[skywire]

You are the one who lacks understanding of dilution. This is not about splitting. It is about dilution. If Ceglia owned 84% of the equity and Zuckerberg 16%, a decision to raise capital by a stock issue could easily dilute their respective stakes in the company. A simple extreme example proves the point: Suppose you own 100% of a company, and you sell shares to raise needed funds. Do you imagine that you will still own 100%? Hardly. But Ceglia would still own proportionally more than Zuckerberg, unless Zuckerberg had acquired additional diluted shares in some way, such as by exercising stock options granted by the board of directors, or outright purchase of shares.

Re:Full of things that don't make sense ...

[skywire]

"you sell shares" should have read "the company issues shares". Mea culpa.

that's what you get

[vuffi_raa]

when you write a contract while stoned and in college.

Re:that's what you get

[Surt]

He'd be lucky if he was stoned. He might be able to weasel out based on not having the capacity to make a binding contract.

"Competency and Capacity

A natural person who enters a contract possesses complete legal capacity to be held liable for the duties he or she agrees to undertake, unless the person is a minor, mentally incapacitated, or intoxicated. "

http://www.enotes.com/everyday-law-encyclopedia/contracts

Be interesting to see the contract

[beakerMeep]

Not a bad tactic if you can pick a winner; make college students hungry for money sign ridiculous contracts. Not a bad ROI for $1k.

Re:Be interesting to see the contract

[HarvardAce]

The contract is included in the lawsuit, available here: http://i.cdn.turner.com/money/2010/07/13/technology/facebook_lawsuit/facebook_filing.pdf

Re:Be interesting to see the contract

[beakerMeep]

Thanks :)

Re:Be interesting to see the contract

[Anonymous Coward]

Pg. 11
PURCHASER: Paul Ceglia
CONTRACTOR/SELLER: Mark Zuckerberg et al ...

Section 2 Entire Agreement ...two seperate business ventures...StreetFax LLC and project Seller has already initiated...with working title "The Facebook". It is agreed the Purchaser will own a half interest 50%

This looks like it'll make an amusing trial.

Re:Be interesting to see the contract

[rahvin112]

Holy Smokes. He's got them by the balls. Unless they can find a state specific reason to invalidate the contract they are smoked beyond belief. There is no way they could make a settlement offer. This guy has a standard work for hire contract for Facebook. Zuckerberg never owned it, he was hired to develop it for $1000 dollars. I'll type up the key paragraph here as the PDF is a bitch to read:

"2. Entire Agreement
The contract between the Purchaser and Seller as a purchase agreement and "work made for hire" reflects two separate business ventures, the first being the work to be performed directly for the StreetFax Database and the Programming language to be provided by the Seller.
Second it is for the continued development of the software, program and for the purchase and design of a suitable website for the project Seller has already initiated that is designed to offer the student of Harvard university access to a website similar to a live functioning yearbook with the working title of "The Face Book".

It is agreed that Purchaser will own a half Interest (50%) in the software, programing language and business interests derived from the expansion of that service to a larger audience."

It's a standard pull out of a book and make some modifications work for hire contract and it appears he had his lawyer review and modify before everyone signed. These things are generally pretty simple (the entire agreement is 2 pages long) and they are very legally binding generally as all the terms are previously tested and pulled from successfully litigated contracts. It's got everything from Patent indemnification to Liens to Subcontracting rights, it's a very thorough and succinct contract. This Ceglia guy is in a very very good position. From the terms he owns more than 80% of Facebook (due to a late opening). Any value that Zuckerberg sold came out of the percentage that Zuckerberg owned, not Ceglia's portion. IMO the reason there is no settlement is that Ceglia is in such a good legal position he has no reason to settle and Facebook either wins or loses the whole company. His company "StreetFax" owns Facebook lock stock and barrel. Zuckerberg was hired to develop it and manage it, that's it and all for $1000. Call that the best investment of all time.

All I can say is WOW. Zuckerberg is history. Might take a few years with all the Legal wrangling and Zuckerberg is going to get his ass sued for failing to disclose this contract when he took the VC money and he might even end up in Jail if the VC guys can convince the government to prosecute for fraud.

Re:Be interesting to see the contract

[proxima]

The contract is included in the lawsuit, available here: http://i.cdn.turner.com/money/2010/07/13/technology/facebook_lawsuit/facebook_filing.pdf

What kind of awful font is that filing made with? It looks close to, but not quite, Comic Sans (the t's are wrong, for one). It's hard to tell based on a rough scan just how crude it looks.

Re:Be interesting to see the contract

[quadelirus]

My question: why didn't this come out like, say, 5 years ago instead of a full 7 years after facebook's launch?

Re:Be interesting to see the contract

[Culture20]

My question: why didn't this come out like, say, 5 years ago instead of a full 7 years after facebook's launch?

As people pointed out in a previous story: Ceglia apparently had no reason to believe Zuckerberg was acting in bad faith until Zuckerberg tried to sell something Zuckerberg didn't own. Once that occurred, Ceglia could pounce (and did, like a three toed sloth, but well within the statute of limitations).

Re:Be interesting to see the contract

[Anonymous Coward]

sweet potato Jesus... at least he could have named it something different.

Re:Be interesting to see the contract

[Anonymous Coward]

Facebook Ltd was legally created one year latter. How can Ceglia claims this is the *same* entreprise he owns?

Re:Be interesting to see the contract

[Anonymous Coward]

I stopped reading in the first line, when you said "There is no way they could make a settlement offer." In fact, counsel for Ceglia approached Facebook's lawyers, who were not interested in the settlement. Obviously this implies they can get a settlement any time they want.

Re:Be interesting to see the contract

[leuk_he]

All that is visible now is badly faxed (or bad photocopy, or "A Btich to read") that is included in the court case.

The contract is signed 28 April 2003, and the duedate for the streetfax thing is 31 2003.

And then there is is a Thing about the facebook that has a due data 9 months later. That just is not logical. 1000 dollar for 3 days work and 1000 dollar for 9 months work. That is the inconsistency the layers are speaking of.

Looking at that you would think that the contract could be a fake. However the reproduction of the contract is such a bad quality that this is very hard to say something about it.

Normally you would want to start to check if the font types on the contract match on the first and second page, but this is near to impossible, because the quality in the court version is so bad. It is even hard to read

Notice that the the first mention of the "the work to be performed for "the Face book" (in section 3) looks more "the Piage book", this is just very very hard to read.

It could be fakes, but layers are not going to call that without some expert haven taken a look at it. With only the fax copy to work with they can not call it a fake, since there is no evidence about it.

I bet zuckerburg is not frantically going over his old achives seeing if there still is some shreds of this contracts are left. That would save a ton of lawyer fees.

Re:Be interesting to see the contract

[L4t3r4lu5]

I'm the prison... BITCH!

Re:Be interesting to see the contract

[Richard_at_work]

People keep asking that, but what I want to know is - is there a particular reason why he should have?

Re:Be interesting to see the contract

[Anonymous Coward]

It says the agreed upon project end date is May 31, not April 31. So that's slightly over a month.

Re:Be interesting to see the contract

[LordKronos]

That just is not logical. 1000 dollar for 3 days work and 1000 dollar for 9 months work.

Simple explanation: He didn't pay him for the labor, but only to cover the expenses Zuckerberg would incur while supplying the labor. Zuckerberg was happy to supply the labor for free (on the expectation it would pay off long term). However, by focusing all of his free time on this project, he probably couldn't hold down a real job. So he had no income but needed money to pay for food, nor to pay for the expenses incurred getting the business off the ground (registering the business, hosting fees, development tools, advertising, etc). In steps Ceglia who says "here's another $1000 so you don't need to worry about all those things...keep doing what you do best and we'll both get rich"

Re:Be interesting to see the contract

[Apple Acolyte]

I personally have to wonder about the length of time involved in bringing this controversy up in court. I wonder how long it took before legal actions was undertaken at all. The reason why the issue is important is there's the concept in the law that a party with a claim against another needs to exercise available legal remedies in order to reduce the damages incurred by whatever wrong is alleged (breach of contract, trademark infringement, etc.). If you don't enforce your contracts or other legal rights, or if you wait for an extended period before attempting to do so, the law can look at your claims less favorably. (This happens in certain circumstances like IP disputes where the legal doctrine of laches can apply - the party defending its conduct claims its opponent has "slept on its rights.") When Ceglia found out that Zuckerberg had a success on in his hands, if he truly believed he had a legal right to a piece of that success he should have immediately been in court over it (assuming no settlement had prevailed in the mean time). Even assuming considerable case backlogs that judges so often complain about (and use as excuses for delaying justice), the process should not have been delayed for years. Even if they were in serious settlement negotiations, the process shouldn't have taken this long. It makes me suspect Ceglia's claims aren't as strong as others assume or imply.

Re:Be interesting to see the contract

[Anonymous Coward]

People keep mentioning the statute of limitations. IANAL, but wouldn't they start when Zuckerberg tried to make the sale, not when they made the contract (not that your post states that)? It's not like contracts have an expiry date themselves, do they?

Re:Be interesting to see the contract

[Anonymous Coward]

People keep mentioning the statute of limitations. IANAL, but wouldn't they start when Zuckerberg tried to make the sale, not when they made the contract (not that your post states that)?

Bingo.

Re:Be interesting to see the contract

[Anonymous Coward]

It is agreed that Purchaser will own a half Interest (50%) in the software, programing language and business interests derived from the expansion of that service to a larger audience."

So if Facebook was programmed in PHP and JAVA, Ceglia owns 50% of that? See, a poorly structured contract like this can be made mince-meat of. All depends on how good the lawyers are.

Re:Be interesting to see the contract

[quadelirus]

Well, presumably, if he owned half the company, he would be entitled to half the profits. But IANAL nor do I know a whole lot about business. It just seems like this would have come up before now. If I owned half of FB, I'd be asking why I haven't seen any checks in the mail or been contacted about the direction of the company, or anything.

Re:Be interesting to see the contract

[Anonymous Coward]

Somebody was doing an awesome job for free? A stupid douche can make you money when you are smarter than he. This guy basically let a criminal operate his company and make it successful using fraudulent means. Now he's got the profit and THIS douche is going to jail. Why on earth would you claim your $$$ 5 years ago? The guys waited until the time was right. Now is right. Smart move.

Re:Be interesting to see the contract

[the grace of R'hllor]

Several reasons I can think of. Ceglia was embroiled in another legal conflict; don't start a second fight before the first one's done.

But probably the main reason reason is that half of several billion market value is signicantly more than half of several millions in venture capital. Last year, growth was just 38% (compared to nearly 200% the previous year), revenues topped US$ 1 billion. It is no longer a startup whose money evaporates when you try to grab it, it is a legitimate business, and Ceglia wants his cut.

Duh?

[betterunixthanunix]

Is this not a fairly routine tactic?

Company Hating

[phantomfive]

In all my years of Microsoft hating, Oracle hating, IBM hating, closed-source hating, I have never wanted a company to fail so much as Facebook. It is quite surreal to me, a visceral, deep-set dislike of the company and everything it stands for. It is reflexive, not even intellectual. I just can't stand them.

I thought Microsoft would be the worst, because I went through years when they were truly evil, but even at that time I never really hated Bill Gates. He's still kind of a geek, and he did work hard, even if he had an over-burdened competitive streak. And Ballmer, while he is a gorilla, he is just a gorilla. He does plenty of things that are entertaining.

But Zuckerberg is just a douche. He is like the lowest of the low, he stole the idea for the company, he doesn't care about his customers, he doesn't care about his partners, he got lucky, and he has absolutely no redeeming qualities. If Bill Gates hadn't gotten lucky working with IBM, he would have started another company and been successful, although maybe not to the same degree. That's just what kind of person he is. Mark Zuckerberg is the kind of guy who takes everything that is bad about investment bankers and brings it into the programming world. He should go back to banking where he belongs. There are lots of douches there. He would fit right in.

Re:Company Hating

[Actually, I do RTFA]

If Bill Gates hadn't gotten lucky working with IBM, he would have started another company and been successful, although maybe not to the same degree.

Microsoft was doing okay without DOS. Not anything like what they became with it, but Microsoft, and MS-Basic would have at least left Gates comfortable.

Gates was able to build a strong enough business to await a good opportunity. And then seize it. As a person, I respect him.

Re:Company Hating

[mirix]

He's the kind of guy that has actually stated "Fuck the users". Sure sounds like a real nice guy.

Fuck him and facebook.

Re:Company Hating

[DogDude]

I'd call him a douchebag because he's just another dot-commer who builds unprofitable, unsustainable "businesses" off of other people's money. He doesn't create anything of any value. All he does is spend other people's money and pays himself as if he deserves it.

The investors are greedy, stupid people who deserve to lose their money, as well, but that's another story.

Re:Company Hating

[schmidt349]

[citation needed]

Re:Company Hating

[IANAAC]

I don't know that he ever said "fuck the users", but he certainly did refer to them as dumb fucks. It was all over the news not that long ago.

Re:Company Hating

[retchdog]

http://www.businessinsider.com/well-these-new-zuckerberg-ims-wont-help-facebooks-privacy-problems-2010-5

Re:Company Hating

[phantomfive]

The fact that he's a douchebag is apparent from what he is done. Read some of his chat transcripts that have come out on the internet and see if you disagree. He screws everyone around him. He sucks. I don't need to character-assassinate Zuckerberg because he's done it to himself with his actions. It has nothing to do with being Jewish or graduating from Harvard. He fits in the investment banking world because the investment banking world is full of douches who like nothing better than to rip each other off. That is how the banking world works.

As for the rest, I don't know why you think I am generalizing about young entrepreneurs in general. I am not. I respect success. But not when it comes from ripping people off.

Re:Company Hating

[Anonymous Coward]

Don't get me wrong, I think Zuckerberg is a Class-A douchebag, and I hope Facebook burns, but I think it's amusing that you -- and all Slashdotters here -- would say word-for-word what Zuckerberg did, with no regrets. And, for some reason, when someone with more influence than you says it, you hold him to a higher standard than you do yourselves.

Is this only amusing to me because I don't use Facebook? I would probably feel differently if I did.

Re:Company Hating

[phrackwulf]

So he'd be a "Zuckerbag" then?

Re:Company Hating

[retchdog]

I for one wouldn't, although I also don't expect you to believe that. Can't speak for other slashdotters since I don't know any of them.

I do use facebook, and with no illusions; only ignorance about the fine details about what exactly is shared.

Nothing here is particularly more amusing than the rest of humanity's sordid and nuanced lives

Re:Company Hating

[Anonymous Coward]

Why does everyone forget Paul Allen, I guess he's not geeky enough for you?

Re:Company Hating

[Anonymous Coward]

To be honest, most of us are dumb fucks. I don't fault him for that.

On a related note, does anyone work in technical support here?

Re:Company Hating

[Anonymous Coward]

And, for some reason, when someone with more influence than you says it, you hold him to a higher standard than you do yourselves.

I take it that you have never heard the phrase "with great power comes great responsibility"? We here are just average people with a basic set of worldly positions and a limited degree of influence, it doesn't matter if any of US are grade-A douchebags because ultimately we don't make decisions that affect millions of other people.

Re:Company Hating

[Culture20]

Don't get me wrong, I think Zuckerberg is a Class-A douchebag, and I hope Facebook burns, but I think it's amusing that you -- and all Slashdotters here -- would say word-for-word what Zuckerberg did, with no regrets.

Look, Slashdotters think they're Aspies, not Sociopaths. When I refer to my users in the words Zuck used, I don't also snicker and say "they 'trust' me". I call my users dumb ^@$& because they screw something up, but then I fix it for them because I care about them (the job actually does come second). Zuckerberg was ridiculing people for exhibiting a good behavioral trait: trust. He thought it was funny that he could abuse^Wrape that trust. That's a mental illness.

Re:Company Hating

[Anonymous Coward]

I take it that you have never heard the phrase "with great power comes great responsibility"?

Yes, and I don't agree with it. I think all people should strive to be equally responsible. It's selfish to place unequal restrictions on those above. It sets a bad example, and the outcome is likely to be different than intended.

Re:Company Hating

[Anonymous Coward]

So what about the other guy? You respect him more? I 100% don't. He didn't do jack.

When it comes to actual work, being a douche is immaterial.

It seems unfair to hold Zuckerberg to things he writes in private chat transcripts. Viacom tried to hold YouTube to its emails and it lost. I suspect if we applied a private-conversation standard to a lot of CEOs and businessmen, we'd hate most CEOs and businessmen. It seems like you hate bankers, a world "full of douches." There's a lot of hate. Can we at least concede that with so much hate, I'd say above average hate, it is certainly reasonable to suspect the hate is unreasonable?

So my apologies over the prejudices. But understand, claiming that the hate is "not even intellectual" and then taking about bankers raises some red flags. I jumped on those red flags, and now the comment is the only other one modded troll in this thread.

Nonetheless, if you respect success, why so much hate for success? You say it yourself: "It is reflexive, not even intellectual. I just can't stand them." More red flags. Sorry again. Is it just that it bothers you that douchebags victor?

Let me tell you something about entrepreneurship and business.

Zuckerberg would probably respond to Ceglia's complaint (and Ceglia's inevitable, spectacular loss in court) like this: "I thought deeply about this, and I ended up concluding that the worst thing that could possibly happen as we get big and we get a little more influence in the world is if we change our core values and start letting it slide. I can’t do that. I’d rather quit." That's how Steve Job's responded to complaints that he should not have sicked the police on a guy who sold an iPhone 4 prototype to Gawker.

Core values often means delivering the best possible product and maintaing the most successful business. Core values which nice guys rarely have. We can't hate people for achieving their goals. So far, Zuckerberg hasn't broken any laws, so at least credit him with that. This hubbub over the contract may turn out to be as bogus as a pair of athletes claiming that their dating website is equivalent to Facebook today.

People like Ceglia and the rowers smell money, they target success, they shouldn't get away with doing nothing and getting a lot. I argue the collective hate of the audience is much, much worse than the douchebaggery of a single human being.

Re:Company Hating

[Anonymous Coward]

Ah, but Microsoft before DOS was mostly more IBM contracts. Their first ever product was a BASIC compiler for Big Blue.

Re:Company Hating

[phantomfive]

So far, Zuckerberg hasn't broken any laws, so at least credit him with that.

Actually, he has. He's personally hacked the email accounts of his customers, that's been proven.

I argue the collective hate of the audience is much, much worse than the douchebaggery of a single human being.

You're right, it's the douchebaggery of a single human being multiplied by the modern power of computers. It's awful. Seriously, you need to go look into what this guy has done before you start defending him. You will begin to agree that he is one of the worst of all tech company CEOs.

Incidentally I don't hate banks. I just think a lot of people who work at investment banks are douches, based on what I've read and on personal experience. And I don't have a problem with that, as long as they stay in their world, and don't spread their douchey world to me.

Re:Company Hating

[Anonymous Coward]

Yes, I agree that exploiting those users while simultaneously misleading them -- and laughing at their expense -- is symptomatic of a dangerous and ill mind. I understand that.

But is he exploiting users? I don't use Facebook, so I honestly don't know. In that IM snippet, it isn't clear that he was willing to divulge intimate personal details. As I interpreted it, he listed the types of information that he had as proof for what people trusted him with. He didn't claim to want to transfer ALL of it.

As 'The Facebook' at that time was local to Harvard -- or as I read it was anyway, maybe mistakenly, and some time ago -- there are somewhat different rules of conduct that would apply to personal data. For a public website, even exposing user's names is considered unethical. However, colleges and universities often have many data collection services provided for faculty and students that is internally available to all. An address, a name, and a phone number is certainly not unreasonable to be shared. Is there any evidence that Zuckerberg was sharing more sensitive information than what I mentioned?

And, lastly, a small comment on the subject of his insult. If you were him, or any person running this sort of website, would YOU use it for what common users regularly do -- personal, sometimes confidential conversations between friends and family; tracking locations; planning events; storing home addresses and phone numbers? If you, like me, think that this is too much, should it be unexpected that you consider the people doing this to be idiots? After all, you don't share it yourself; you don't want to be an idiot too. In essense, this is expecting others to behave as you behave -- expecting of others what you expect of yourself.

In short, I don't see any true evidence that he was doing anything more than what we ourselves always do: criticizing others for doing something we perceive to be stupid.

I'll probably get tagged a troll or sycophant for this post, so I have one more thing to add. I find it... disgustingly... inappropriate, that I am defending Zuckerberg. As I've said, I do believe he is a douchebag of the highest order. And I would gloat on the day that Facebook collapses. I feel that Zuckerberg himself has no business in running a project of this scale and importance. Facebook could be much better today if it were ran by someone more competent and with a more developed set of morals. I just can't help but feel that this particular criticism that we are discussing happens to be a little bit unfair.

Re:Company Hating

[Myopic]

Everybody gets to judge winners and losers. Yay, that's how free societies work. You get to ignore him if you want, though.

Re:Company Hating

[Myopic]

You saying [citation needed] is tantamount to saying [I'm too lazy or dumb to use a search engine]. This is an internet forum; not all statements come with academic-quality citations, and you don't have to believe everything that is posted. If you disbelieve something said, then you can say so; but you don't get to expect others to look up things for you.

Re:Company Hating

[shaitand]

Sorry but I call BS. Gates was bankrolled by his father and so was Microsoft. The companies contracts with IBM kept it afloat before and after DOS and those only happened because of his wealthy father's connections.

Bill Gates is no rags to riches story. He's just a rich newb tink'd up by his daddy who had no scruples and was willing to lie, cheat, and steal his way to the top. He sold IBM a system that didn't exist, that wasn't clever, it was fraud.

Re:Company Hating

[shaitand]

"they shouldn't get away with doing nothing and getting a lot"

How can you defend CEO's, Investors, and Entrepreneurs and make this statement in the same post?

These are all people who make their living figuring out how to scrap the most cream off the efforts of others. In other words, doing nothing and getting a lot.

Re:Company Hating

[Actually, I do RTFA]

. Gates was bankrolled by his father and so was Microsoft.

Initially, but Microsoft was in the black before DOS.

The companies contracts with IBM kept it afloat before and after DOS and those only happened because of his wealthy father's connections.

I thought his mother's connections. She was the one who served on various boards.

Bill Gates is no rags to riches story.

Not him personally... but intergenerationally, yeah. His father did the rags to riches journey. He did the riches to OMG so much money story. One generation just doesn't go rags to Bill Gates wealth.

He sold IBM a system that didn't exist, that wasn't clever, it was fraud.

After CP/M sent them packing. And it's only fraud if he claimed it existed when he sold it. It's not uncommon to sell a client software, and only make it after they sign a contract.

I'm not saying he lifted him up from his bootstraps. But that shouldn't diminish what he was able to accomplish.

Re:Company Hating

[Actually, I do RTFA]

Microsoft before DOS was mostly more IBM contracts. Their first ever product was a BASIC compiler for Big Blue

Their first product was a BASIC compiler that IBM bought, sure. But it was selling to other people before IBM became involved. Besides, selling to IBM is a good business model.

Re:Company Hating

[Anonymous Coward]

I'd call him a douchebag because he's just another dot-commer who builds unprofitable, unsustainable "businesses" off of other people's money. He doesn't create anything of any value. All he does is spend other people's money and pays himself as if he deserves it.

The investors are greedy, stupid people who deserve to lose their money, as well, but that's another story.

Look, I hate Facebook as much as the next guy, but let's be honest about this point. Just because we don't see personal value in Facebook does not mean that there is no value in Facebook. There is something impressive about everybody, including non-techies, knowing what Facebook. There is something of value that brings masses of people to use it. Masses of otherwise-computer-illiterate people. Whether it's their crappy IM, photo-sharing, farmville (blech!), whatever it is... ridiculous numbers of people find value in the site.

Don't stick your head in the sand just because you don't see the value.

Re:Company Hating

[IronChef]

I hate Facebook too, but lately I have taken a perverse pleasure in its success. It is an ecosystem that I have opted out of, and don't want anything to do with. I don't want to be that visible and I already keep in touch with everyone I want to via other means.

But as Facebook grows, gobbling up users, it is casting a long shadow... and I have found it very comfortable in the dark. Its success is actually helping me to attain the low visibility that I desire, because not being a user is unthinkable to so many people.

Someday, I may have to eat my words. Maybe one of the clubs I belong to will go 100% Facebook. Maybe we'll be wearing government-mandated Facebook Helmets in 10 years. But I'll deal with it somehow. I'll opt out by any means necessary.

Eventually, I am going to be like a character from a William Gibson novel. In the far future... somewhere in Seattle... there is a man who can only be reached by email or a string of 10 digits written on the back of a Fry's ad. "What is this, a... a phone number? An old-fashioned email address? My God... he's a monster!"

Google Me

[Enderandrew]

The average user doesn't know how much of a dick Zuckerberg is. But this trial will expose that to more of the public, as will the upcoming Fincher movie.

And frankly Zuckerberg's history of screwing over other early partners, and intentionally screwing his users by constantly changing privacy settings to expose users will come out as evidence that he sought to exploit Ceglia and never honor the contract.

In the meantime, Google is putting together a Facebook killer. And the killer feature will be that your Mafia Wars and Farmville accounts will transfer over to this new social network, Google Me.

Re:Google Me

[interval1066]

"...this new social network..."

Then, almost at once, all the users of social neworking, games, apps, all of it, almost to a man, woke up, and yelled "I've been spending 10 years of my life doing what????

Re:Google Me

[OverlordQ]

In the meantime, Google is putting together a Facebook killer. And the killer feature will be that your Mafia Wars and Farmville accounts will transfer over to this new social network, Google Me.

Umm, you do know who they're working with right? Zynga, the other Facebook company that doesn't care about users.

Re:Google Me

[Anonymous Coward]

Fair enough. But Ceglia is no lily-white venture capitalist philanthropist either, according to TFA. These two richly deserve one another. Feh!

Re:Google Me

[Anonymous Coward]

I'd mod this up if I could, even as it's already a 5. FB is practically everything I hate all nicely bundled into one site. On top of it all, the guy behind it is a douche. Now to hope this whole court battle hurts them in the end, though that might be too much to ask.

Re:Google Me

[larry bagina]

In the meantime, Google is putting together a Facebook killer. And the killer feature will be that your Mafia Wars and Farmville accounts will transfer over to this new social network, Google Me.

Orkut much?

Re:Google Me

[Anonymous Coward]

Umm, you do know who they're working with right? Zynga, the other Facebook company that doesn't care about users.

That's just bullshit.

Zynga has worked diligently to improve it's customer service. If you're referencing the "scamville" situation that was reported by TechCrunch last year, I'd suggest you read the follow-up articles also posted by TechCrunch praising the approach that Zynga took in completely removing those offers from all games until they were able to gain better control. In fact, one of those offer companies is likely to go out of business soon because they recently lost out on a facebook bid to be the lone offer provider of facebook credits. (see link here)

Zynga certainly hasn't been a perfect company in terms of user relations, but they have been one of the very few who have publicly acknowledged their problems and worked to get them corrected.

Re:Google Me

[Culture20]

I tried Googling you, but I'm having trouble figuring out how you tie in to the new Google social network. /Abbott

Re:Google Me

[Legion303]

Spreading virtual cow shit on electronic vegetables, apparently.

Re:Google Me

[treeves]

check this out: http://www.bogost.com/games/cow_clicker.shtml
One of the stupider aspects of Facebook, distilled into a pure, stinky essence of wasted time.
Funny stuff.

Re:Google Me

[BitZtream]

Wow ...

I got a bridge over the ocean in Arizona, right on the beach ... I'll sell it to you for $1 since you seem like such a nice guy. Its right next to the nice guys at Zynga.

Re:Google Me

[Myopic]

Awesome. I hope it works better than the "iPhone killer" Nexus One. I also hope it works better than the "YouTube killer" Google Video. I also hope it's better than Orkut.

Re:Google Me

[Anonymous Coward]

Why do you think that, is it because Orkut really killed it?

Re:Google Me

[Anonymous Coward]

That's just bullshit.

Zynga has worked diligently to improve it's customer service.

That's just bullshit.

There's no apostrophe in "its" when used as a possessive.

Coming to a court room near you

[SmegginHell]

Staring Jesse Eisenberg in his breakthrough role as yet another awkward, nerdy, soft-spoken teenager.

which defended doesn't want their case thrown?

[Nyder]

Nice article.

Of course, seeing as most defends want to have their cases thrown out, it's not really news.

Deal with the devil - time to pay up...

[hadesan]

Mark, come on man - give the man his due - it's only 84% of the stuff you ripped others off for...

Re:Deal with the devil - time to pay up...

[blair1q]

Minus the part he already sold to his other investors, minus what they'll sue him for once the judge takes some of that back to give it to Ceglia...

Zuckerberg could end up deep in debt after this.

What's this got to do with "my rights online"?

[John Hasler]

It's a contract dispute between two individuals. The outcome will depend on the facts of the case and the judge's interpretation of the contract. No rights involved, except for the plaintiff's exercise of his right to sue.

Re:What's this got to do with "my rights online"?

[blair1q]

You have the right to watch Facebook's ostensible founder go up in flames, online.

Re:What's this got to do with "my rights online"?

[selven]

Due to Slashdot's lack of a "law" section, all legal stories get thrown into YRO. Unless they relate specifically to Apple, Microsoft, or some other category, where else could they go?

Re:What's this got to do with "my rights online"?

[Culture20]

When Zuckerberg starts getting really scared about losing it all, he's probably going to do something stupid and illegal with all the information he's acquired from Facebook. Desperate people do desperate things.

Re:What's this got to do with "my rights online"?

[Anonymous Coward]

You have the right to watch Facebook's ostensible founder go up in flames, online.

Exactly. It's not our right to watch that. It's our duty. Minor difference.

Re:What's this got to do with "my rights online"?

[Anonymous Coward]

Someone should start an online bet on which country Zuckerberg moves to with all his stolen money.

Obligatory

[Anonymous Coward]

Dude, fuck facebook, seriously! - Stan Marsh

Things that Don't Make Sense

[sexconker]

I'd love to submit an amicus curiae brief to some random trial and just copy paste www.timecube.com .

If it's part of the court record, they've got to read it, right?

Re:Things that Don't Make Sense

[Culture20]

I'd love to submit an amicus curiae brief to some random trial and just copy paste www.timecube.com . If it's part of the court record, they've got to read it, right?

+4 Corner Simultaneous 4-Day Informative
EVIL /. Moderators block and suppress www.timecube.com

Re:Things that Don't Make Sense

[Anonymous Coward]

There is a heavy penalty for frivolous court filings.

Re:Things that Don't Make Sense

[Anonymous Coward]

... That's just mean forcing people to read all of that.

I mean, I tried, but my mind just couldn't parse half of that stuff.

Re:Things that Don't Make Sense

[Anonymous Coward]

That site makes perfect sense, you merely need to read the words that are not there.

I get that Zuckerberg is not well thought of

[Anonymous Coward]

but I need to know who Paul Ceglia if he is about to own 84% of everything I have ever posted to Facebook. Can I trust him with my carefully composed photos? My thoughtful opinions? My flashes of insight? The results of a test determining what kind of writer I am (Leo Tolstoy, BTW)?

Re:I get that Zuckerberg is not well thought of

[Anonymous Coward]

And nothing of value was lost...

Re:I get that Zuckerberg is not well thought of

[Penguinshit]

Paul D. Ceglia's Facebook page.

Re:I get that Zuckerberg is not well thought of

[Penguinshit]

Try again:

Paul D. Ceglia's Facebook page.

Re:Where's the Beef?

[msauve]

Here you go. Courtesy CNN.

The contract starts on page 11.

Forgery?

[kabloom]

Why isn't Zuckerberg claiming the contract is a forgery?

Re:Forgery?

[msauve]

Because perjury is a criminal offense? Do you think he wants to give up $xx billion, control of Facebook, and pick up soap in prison for up to 5 years?

Re:Forgery?

[HarvardAce]

Why isn't Zuckerberg claiming the contract is a forgery?

I think they're heading in that direction. Facebook has asked to see an original copy of the contract and Ceglia's lawyer told them to "come visit my office and I'll show it to you." Sounds fishy.

Re:Forgery?

[msauve]

It's fishy that they don't want to let a document which may be worth billions of dollars out of their control/sight? Where's Zuckerberg's copy? Facebook's lawyers can look at that. Zuckerberg knows whether or not there was a contract, and if he knew there wasn't one, they wouldn't delay in saying so. They've already admitted to a business relationship. Lacking a Zuckerberg copy which differs from the one in the filing, it will be hard to argue/prove it was modified after the fact. Hence, the Chewbacca defense.

Next up, Ceglia's lawyer's office gets burgled.

Re:Forgery?

[shaitand]

And what happens when he lets it out of his possession and he loses it.

I would turn over the original document to anyone but the court and even then only after having all the analysis performed on the original the highly competent team of document and contract experts I hired could think of.

Re:Forgery?

[boarder8925]

Why isn't Zuckerberg claiming the contract is a forgery?

Probably because it's not.

Schoolyard arguments . . .

[Tanman]

Sally: TEACHER, I told Billy he could have my crackers yesterday if he'd give me his desser TODAAAAAAAY!
Teacher: Is that true, Billy?
Billy: But, but, I didn't KNOW my mommy was gonna make BROWNIES. SALLY just gave me an oreooo!
Teacher: Now Billy, you made a legally binding agreement with Sally. I'm afraid that I will have to enforce the terms of the contract, as Sally did uphold her end of the bargain. If you thought you might be getting a brownie today, then you should have just waited and shown some restraint and considered any future ramifications from your actions.
Billy: WAAAAAAAAAAAAAH!

Re:Schoolyard arguments . . .

[BitterOak]

Sally: TEACHER, I told Billy he could have my crackers yesterday if he'd give me his desser TODAAAAAAAY!

It is a good analogy, but what is a "desser"? At first I thought you meant to say "dresser", but kids don't usually trade in furniture. An Xbox-360 or something similar would make more sense here.

Re:Schoolyard arguments . . .

[Lord_of_the_nerf]

I'd agree if Sally's brownies weren't worth billions. Billy's still a douche.

Re:Schoolyard arguments . . .

[pjt33]

Try "dessert".

Re:Schoolyard arguments . . .

[kramerd]

Oral agreements aren't valid if the contract cannot be settled within one year.

Meanwhile, Sally and Billy are both below the age of 18, and until they turn 18, even if the contract was written, they can both cancel the agreement.

Re:Schoolyard arguments . . .

[The MAZZTer]

Meanwhile, in the real world, oral agreements are not legally binding.

(AFAIK IANAL etc. Yeah I know you were just trying to make a point, and I see it. :P)

Re:Schoolyard arguments . . .

[Anonymous Coward]

They are in the UK, and as the US system is based off our common law, I would expect them to be in the US as well. The problem with an oral contract rather than a written one is proving that agreement.

May I suggest another legal strategy...

[Anonymous Coward]

Let the wookie win

Captcha = Shooter. Proves Han Shot First!

Orkut?

[Anonymous Coward]

I heard they have a brazilian members!

Re:Orkut?

[hexadecimate]

"How many users does Orkut have?"

"A Brazilian!"

That one absolutely never gets old.

"Your Honor, I demand..."

[CptNerd]

"Your Honor, I demand this contract be thrown out as evidence!"

"On what grounds?"

"On the grounds that it incriminates my client!"

Re:"Your Honor, I demand..."

[Gnavpot]

"Your Honor, I demand this contract be thrown out as evidence!"

"On what grounds?"

"On the grounds that it incriminates my client!"

Liar Liar?

Re:"Your Honor, I demand..."

[CptNerd]

I think so, unless you're insulting me... (big grin)

IANAL, but...

[rickb928]

"Facebook attorney Lisa Simpson acknowledged on Tuesday that Zuckerberg and Ceglia had worked together on the street-mapping website but said the contract submitted by Ceglia was full of "inconsistencies, undefined terms and things that don't make sense."

Um, as if that means much. If the contract is otherwise legally correct, this is not the defense I would want to be counting on...

"We have serious questions about the authenticity of this contract," Simpson told U.S. District Judge Richard Arcara. "What the contract asserts is there is a relationship about Facebook and there isn't one."

This is the interesting statement. Does Ceglia need a relationship with Facebook, or with Zuckerman? Actually, doesn't he just need a contract?

I'm gonna enjoy this. What a show! Zuckerman is a lawsuit machine!

That's not what Facebook wants

[iamthelaw]

Facebook wants control of his company back. Some idiots who combined own less than 16% of the company are trying to stop Facebook from moving in.

There is no way Facebook is gonna lose this one

[evalencia1]

Not when their attorney is Lisa Simpson!

Ceglia's only chance is to get Milhouse on his team.

Re:There is no way Facebook is gonna lose this one

[MarkGriz]

Ceglia's only chance is to get Milhouse on his team.

Or hire Nelson Muntz to give Zuckerberg a noogie

Statute of Limitations == No Story

[Anonymous Coward]

New York, where the suit was filed, has a 6 year statute of limitations on contracts actions. For those who are not lawyers, that means that in New York, you have 6 years from the date of the breach to sue, or else your suit is time-barred because you've sat on your rights too long. This lawsuit was filed about a month ago. Simple math means that unless Zuckerberg actually breached the contract after mid-June 2004, this suit is about to go no where fast.

My educated guess is that any breach, assuming a valid contract, occured well before then. Facebook officially started in Zuckerberg's Harvard dorm room in Fall 2003. From there, it started to spreading to other private northeastern universities in January and February of 2004, adding new schools on a monthly basis. My alma-mater got Facebook (back in the days when it was limited to college students only AND only to students at certain colleges) in September 2004 and it had become an emerging but well-established force by then.

In short, the time-frame for Facebook and the time frame that the alleged contract was entered into just don't match. This should get thrown out fast for that reason alone. If it doesn't then, something really weird and fishy went down that would allow the statute of limitations to toll.

Re:Statute of Limitations == No Story

[teknopurge]

It's from the time when the breach was detected - it likely took several years for this guy's lawyers to confirm the breach was valid and there was a valid suit. Do you think we would be talking about this on slashdot if it hadn't been vetted by his lawyers before going after zuckerperson? In short, your quoting something as obvious as a limitation statute thinking that this is what will undermine the case is ignorant. The lawyers that filed the suit considered that for about 200ms when they first met the plaintiff for coffee.

Re:Statute of Limitations == No Story

[DavidTC]

I don't understand why you're acting like there was any breach of contract at all.

There is no assertions that Zuckerberg was supposed to, for example, pay him X dollars years ago. The assertion is that Ceglia did, and always has, owned 84% of the company, in exchange for money. Assuming the money was paid, the contract was fulfilled at that time. Ceglia is arguing the contract is valid, not that it was breached. There is no statute of limitation on a valid sale.

If I buy a house, and say you can maintain it until I move in, and I don't move in until 10 years later, that's not a breach of contract. If I discover that you sold parts of it off more than 6 years ago, that's still not a breach of contract, it's theft by conversion. (Yes, yes, there are squatting laws that apply in that specific example, but that's not the point.)

Even if the six years applies to this situation, that just means that any part of the company sold more than six years ago was legally sold, or at least can't be disputed. Any sales after that point are still bogus, or will be diluted to near nonexistence, as he owns 84% of the company as of six years ago.

Dilution?

[Anonymous Coward]

84% of the company when it was created does not necessarily equate to 84% of the company today. Stock, options, and other considerations granted to employees, vc firms, angels and other private investors would have diluted that 84% stake significantly over time. Still, even if its been diluted down to 1%, its still a nice bump in the guy's bank account.

Re:Dilution?

[teknopurge]

yes, it does. You don't dilute percentages, you dilute equity shares by volume.

Re:Dilution?

[Anonymous Coward]

Not to mention that even if it did dilute the percentages, it would be the majority shareholder who would have the right to authorize it, not the guy who owns 26%.

Re:Dilution?

[shaitand]

yup, it is the other stock holders/investors who will experience dilution. Whatever chunk of the company you had yesterday will now only be a chunk of Zuckerberger's share. If that isn't what you thought you were buying or what you agreed to buy you have no recourse against the 84% of the company, only Zuckerberger.

Can Ceglia be found liable?

[hamburgler007]

Assuming he wins the case, can the investors take him to court for allowing someone who is essentially an employee of the company he holds the majority of to engage in fraud (with respect to said investors)?

Re:Can Ceglia be found liable?

[LordKronos]

Assuming he wins the case, can the investors take him to court for allowing someone who is essentially an employee of the company he holds the majority of to engage in fraud (with respect to said investors)?

I don't think so. He held an investment share in the company, but Zuckerberg was fully responsible for the operation of the company. Ceglia can't personally be responsible for anything. However, if the VC firm wants to take the company to court to try and extract their investment money back out of the company (as much as they can, which may not be much), they can do so. If they succeed, the value of the company will drop and thus Ceglia (as a shareholder) will lose value on his investment, which is the only way a shareholder can be held accountable for a businesses wrongdoing.

Re:Can Ceglia be found liable?

[hamburgler007]

Thanks, The thought I had was that if Ceglia was intentionally sitting on his hands with (or event without) knowledge that Zuckerberg was bringing in investors for a larger % than what he was entitled to those investors could go after Ceglia.

Which Side Offered the Contract?

[b4upoo]

Usually the party in control of the contract suffers if the contract is faulty or ambiguous. So it comes down to offered the contract and what does the contract promise. Further, was the contract within the law? Were both parties adults of sound and sober mind?

Re:Where's the Beef?

[Anonymous Coward]

Doesn't he know if he's going to do this he needs to do it FROM ANOTHER COUNTRY? Jeeze, Mark Zuckerberg's plan is the business plan the manufacturer of the Crunchpad/JooJoo followed apparently.

Well fuck him for stealing his CLIENT'S software and then milking the hell out of it but fucking over millions of users. You under budget, and underestimate costs and then steal a product. Way to engender trust in IT firms, jackass.

Nope. They'll tell the clerk to ignore you.

[Anonymous Coward]

> If it's part of the court record, they've got to read it, right?

The courts are not quite that dumb.

A) Some courts (like the Supreme Court) will only accept amicus briefs from a lawyer admitted to practice before them.

B) If you file gibberish to waste their time, they will direct the clerk of the court to ignore your filings and even to tell them not to notify you that they're ignoring you. Remember that nut who likes to sue everyone he can (seriously, I think he's sued every one and thing from the Bible, the Brooklyn Bridge and the Beatles)? I remember reading how one court got sick of the nonsense he filed with the court and actually entered an order to this effect.

Sloppy work

[supersat]

The complaint looks like rather sloppy work. They listed Zuckerberg's home address as (what I assume is) his dad's office, said that Facebook was incorporated in New York in 2009 (no, just registered as a foreign corporation), and that their principal office is in New York (no, only their registered agent is in New York... their main office is in Palo Alto).

Even if this guy has a case, I wouldn't be surprised if his lawyer screws him over.

legal nonsense

[popo]

1. Ad Hominem attack bears zero relevance to the enforceability of the contract.

2. Seven years time between enactment and seeking enforcement is not a lot.

3. Statute of limitations? What? Show me that law please.

4. Did you sign a contract which states that you will deliver said bridge? If so, you're the one in hot water.

Re:legal nonsense

[schmidt349]

"Ad hominem?" He's been indicted by the State of New York for a crime that goes directly to his credibility in any claim of contractual obligation.

YANAL, so I'll forgive you for not knowing basic New York contract law:

      213. Actions to be commenced within six years: where not otherwise
    provided for; on contract; on sealed instrument; on bond or note, and
    mortgage upon real property; by state based on misappropriation of
    public property; based on mistake; by corporation against director,
    officer or stockholder; based on fraud. The following actions must be
    commenced within six years:
        1. an action for which no limitation is specifically prescribed by
    law;
        2. an action upon a contractual obligation or liability, express or
    implied, except as provided in section two hundred thirteen-a of this
    article or article 2 of the uniform commercial code or article 36-B of
    the general business law;
  [snip]

In short, assuming (contrary to fact) that this guy's claim is genuine, his opportunity to allege a claim of breached contract expired the date the performance in the contract came due. That would have been six years from February of 2004, when Facebook went live. He's a few months late.

Of course even if he'd brought the claim in February he'd probably be barred under equity by laches.

Re:legal nonsense

[blair1q]

Someone already mentioned, if the guy thought he owned it, and Zuckerberg never indicated otherwise, then the offense didn't occur until Zuckerberg told him he didn't. At the time Ceglia paid Zuckerberg the money, according to the contract Zuckerberg ceded 50% of the company. He owned it until Zuckerberg told him he didn't. I doubt that was only a few months after the contract was signed, and probably wasn't until recently.

Re:legal nonsense

[schmidt349]

Nope. That's categorically wrong, and demonstrates a complete lack of understanding about how contracts law and equity actually work. Vigilantibus non dormientibus aequitas subvenit.

The Social Network movie

[Santzes]

I knew there had to be a twist in the movie, the trailer was so boring. Maybe Zuckerberg will even make it a action movie after losing everything. I searched IMDb for "Facebook" and the first result was Disaster Movie. That's gotta be a good sign...

May the richest man win!

[CuteSteveJobs]

Sounds like Ceglia has legit claim, but Zuckenberg is richer than God and whoever has the most money can afford the better lawyers and bleed the other party into bankruptcy. Ceglia has nothing to lose. Zuckenberg has everything to lose.

Re:May the richest man win!

[blair1q]

Zuckenberg is richer than God

Well, no, he isn't.

In fact, most of his wealth is equity in his own company.

He's only got so much cash, then he has to start paying in stock.

And lawyers, as I've said, can work on contingency. They can even borrow money from speculators to pay themselves and their expenses, and promise to pay it back with interest when they get their (hefty) cut of the settlement.

Zuckerberg and Ceglia can sit back and not expense a dime until its done.

I wouldn't mind putting my own money into Ceglia's campaign and getting a couple of points of his equity when it all works out. Because it sure sounds like Zuckerberg fucked himself here.

Re:Nope. They'll tell the clerk to ignore you.

[Anonymous Coward]

Are you thinking of Johnathan Lee Riches?

Something Smells Off Here - Doesn't Make ANY Sense

[jmactacular]

So Zuckerberg is hired to develop "The Face Book" for someone else in exchange for $1,000? It says in Section 5, that Zuckerberg agrees to pay for all domain and hosting costs out of the $1,000 he supposedly received. Seemingly forever. So, only $1,000 bucks to design and develop a site you're personally passionate about, and then to turn around and pay out from that same money to keep it up and running for the domain and hosting.

My question is, what would he possibly gain from this deal or Paul Ceglia? He's essentially getting a loan for a measly grand that he's going to use to pay to run the site anyway, that he did all the work for. This doesn't pass the common sense test to me. I wouldn't be surprised if it's a forgery all of Ceglia's doing. Can you say Photoshop? I don't even see the bank's canceled check that Zuckerberg signed and cashed. (Only Ceglias carbon copy from his checkbook).

Here's that paragraph from Section 5.

For "The Face Book" Seller agrees to maintain and act as the sites webmaster and to pay for all domain and hosting expenses from the funds received under this contract, and Seller agrees that he will maintain control of these services at all times.