The identical twin brothers who claim Facebook founder Mark Zuckerberg stole their idea for a social network have had their battle to claim a bigger slice of the online giant rejected in a US court overnight.
Cameron and Tyler Winklevoss, who claim to have hired Zuckerberg to build a social network while the trio were studying at Harvard, were at the centre of the movie The Social Network, which explored the start-up phase of Facebook and the twins’ original legal battle with Zuckerberg.
That legal battle was originally settled in 2008, with a handwritten settlement that saw the twins receive cash and stock worth $65 million.
But in January, the twins asked the US Court of Appeals for the Ninth Circuit to dissolve this settlement, claiming that Facebook has used inaccurate information in the settlement.
Specifically, the twins stock was based on a valuation of the company at $15 billion. But they claimed Facebook was using internal valuations of just $3.7 billion.
If the lower valuation was used, the Winklevoss twins would have received a much larger stake.
Facebook had argued that the twins were suffering from “settler’s remorse”.
The Court agreed.
“The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace,” wrote chief judge Alex Kozinski, who was part of a three-judge panel.
“And the courts might have obliged had the Winklevosses not settled their dispute and signed a release of all claims against Facebook.’
“With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favourable in light of recent market activity.”
“For whatever reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.”
Despite this point, the Winklevosses’ lawyer said his clients planned to file an appeal.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
