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Winklevoss Twins Take One Last Shot At Facebook In Court

At the end of the movie The Social Network, Facebook settles its lawsuit against Tyler and Cameron Winklevoss, paying them $65 million in cash and Facebook stock to quietly fade into the sunset and drop their claims that Mark Zuckerberg stole their ideas to create his globe-spanning internet company.

Despite the film’s tidy ending, the Winklevosses’ litigation is marching on.

That’s because the twin brothers have asked for a remarkable series of “do-overs” since signing the settlement agreement in February 2008, surrounded by their lawyers. First, they complained that the settlement wasn’t fair, because they were duped into believing that the Facebook stock was worth more than it actually was. Then, they got into a battle with the lawyers who won the settlement for them, from the law firm Quinn Emanuel Urquhart & Hedges, alleging the firm had engaged in malpractice. (That dispute ended up in arbitration, which was resolved in September, with the Quinn Emanuel firm collecting the full fee it asked for, reportedly $13 million.)

By the middle of 2009, the twins had filed five separate appeals, which were eventually consolidated into one case. The Winklevosses also filed four separate emergency motions to stay various aspects of the settlement while the appeal was pending, all of which were rejected. A final appeals hearing is scheduled for Jan. 11 in San Francisco to determine whether the Facebook settlement will finally stand or the Winklevosses will be able to scuttle it, hitting the ultimate reset key on litigation they initiated more than six years ago.

While The Social Network paints Mark Zuckerberg as darker and more troubled than he likely is, the movie seems to be closer to reality in its depiction of the Winklevosses (or “Winklevii” as Jesse-Eisenberg-as-Mark-Zuckerberg calls them) as over-privileged whiners. In fact, anyone tracking the twins’ lawsuit against Zuckerberg and Facebook-drawn out now for an unbelievable two years after a settlement was signed-can only reach the conclusion that Hollywood was, if anything, kind to the two brothers.

Earlier this month, both the twins and Zuckerberg were featured on 60 Minutes. Zuckerberg handled questions about the lawsuit deftly, saying that it just wasn’t that big of a deal to him, and telling interviewer Leslie Stahl that he’d spent less than two weeks of his time, total, dealing with the brothers and their claims. The Winklevosses, meanwhile, seemed eager for another chance to re-litigate their accusations on camera. (Yes, that would be the same lawsuit they agreed to settle.)

Facebook begins its appeal brief by describing how the coming hearing is a result of a settlement that was meant to put an end to the “rancorous litigation on two coasts” between Zuckerberg and the Winklevosses and their partner Divya Narendra, who founded failed competitor ConnectU. “Surrounded by a bevy of lawyers, the CU Founders signed the deal,” write Zuckerberg’s lawyers. “Then they suffered a bout of settlers’ remorse. They ask this court to relieve them of the deal they struck to plunge back into scorched-earth litigation.” The CU founders say that “they and their lawyers were duped about the value of Facebook’s private stock,” even though “they acknowledge that Facebook never made any representation as to the value of its shares.”

Messages left with two of the Winklevosses’ lawyers weren’t returned; Facebook’s lawyer also didn’t respond to a request for comment.

What makes CU’s drawn-out litigation all the more remarkable is that Facebook has to be one of the most patently “unstealable” ideas out there. Facebook wasn’t the first internet social network and, at the time of the suit, wasn’t profoundly different than those that came before it. Facebook’s success isn’t due to the idea of a social network, but the skillful execution of that idea — combined, of course, with some hard work and some very lucky timing. As Eisenberg-turned-Zuckerberg says in the movie: Does “a guy who makes a really good chair owe money to anyone who ever made a chair?”

Lawsuits that claim, or at least imply, the theft of ideas have proliferated in recent years. Witness, for example, the 15 pending patent lawsuits filed against Facebook, or the nearly 50 suits filed against Google-none brought by true competitors. In The Social Network, Zuckerberg and Facebook overcome a major legal challenge by ConnectU, which the company’s lawyers describe as a mere “speed bump” on the road to internet dominance. The lawsuit against Facebook might be a “speed bump,” but such speed bumps seem to be sprouting all around Silicon Valley.

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