Winklevoss Twins Still Trying To Get More Of Facebook

from the oh-come-on dept

There have been a whole series of claims from others that they had the “original idea” for Facebook, but as we’ve explained over and over again, the idea part was pretty meaningless. There were plenty of other, competing social networks at the time Facebook was founded. What made Facebook a success was not the original idea, but how the company executed and changed (quite a lot) over time, adapting to the market. And, yet, the lawsuits continue. The most famous, of course, was the one filed by the Winklevoss twins, which is at the heart of the recent fictionalized movie about Facebook. As we covered here, the twins sued, claiming that Zuckerberg took the idea from them and their company ConnectU. Over the years, more evidence has come out that suggests Zuckerberg may have been kind of slimey in dealing with the twins, but it still didn’t suggest that the twins actually deserved any part of Facebook. Even so, in 2008 (as is covered in the movie), the company settled the lawsuit, and dumped stock worth tens of millions on the twins… for not doing anything.

Given all that, we were amazed later that year when the twins sought to back out of the settlement, in what appears to be a clear case of “settlers’ remorse.” Joe Mullin has the latest on the twins’ attempt to go through this whole thing all over again, and notes how ridiculous the whole situation is:

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 Mullin points out, however, these kinds of cases have increased in recent years, as the culture and legal framework we’ve created, that overvalues ideas and undervalues execution, leads people to think that just because they had an idea — even if they had nothing to do with the execution — they deserve a cut from those who did execute. While we’ve already posted this before, now seems like a perfect time to repost the recent recent xkcd comic on this concept:

Business Idea

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Companies: connectu, facebook

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Comments on “Winklevoss Twins Still Trying To Get More Of Facebook”

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Jay (profile) says:

Personally I think its more a cultural development than a legal one. Sure the law allows people to do it, but the driver in behind the law is the cultural change.

Way back when the US economy was a production heavy one. It made physical stuff and that stuff was sold. The culture was you made money by executing on good ideas.

Then, recently, as a result of massive competition and a ‘I need’ consumer mentality, production moved to other economies. The US became a primarily consumption driven economy. The problem here is you could no longer make money off executing good ideas.

So you sit back and either accept you can no longer make lots of money (which has a seriously bad impact if you want to keep consuming stuff) or you look for new ways to make money.

The obvious choice is to change your focus from making money on the execution of ideas to the actual ideas themselves. Its a cultural shift driven by an increasingly free global market. It causes all sorts of problems, but if ideas are free then (internationally speaking) you are highly exposed.

cc (profile) says:

Re: Re:

I made a similar comment a few days ago. While consumerism is out of control, runaway capitalism is an even bigger problem (and in a sense, the latter is the cause of the former).

By letting companies like Microsoft, Google, Pfizer, Coca Cola, Shell, Exxon, etc etc get so fucking big you effectively reduce every market to a handful of companies, while the rest are grossly out-marketed and eventually assimilated. In doing that, you lose innovation, competition becomes a lobbying game, and the rich become richer while the poor become poorer.

IP is a trick those companies are using to live beyond their means, by competing and innovating as little and as slowly as possible (an unwanted side-effect of letting them have so much power). I expect the end consumer sees little gain from all the outsourcing that is involved in the creation of a product; very often the reason for outsourcing is probably not to push prices down, but to push the profit margins up…

So, we need to be asking ourselves: How big is too big? How much profit is too much profit? How can companies be forced to compete not only for the most money, but also for the most social benefit? How can competition be rekindled?

Jay (profile) says:

Re: Re: Re:

The reasons for outsourcing are very complicated, but if you boil it down its driven partly be a need to continually grow and partly by the need to stay in business by keeping up with (or ahead of) your competition. Basically if I can offer more features at a lower cost I’ll kick your butt.

Rather than try to define how much profit is enough, or how big is big enough (both of which are entirely subjective), perhaps we’d be better off in redefining how we measure success. The answer isn’t in telling people they cant be more successful than they are now, but redefining how we success – letting people be more successful in a more ways.

Anonymous Coward says:

What I have read, which is admittedly only a fraction of all articles on the subject, seems to suggest that the “innovator” insinuated himself into a project then in development, liked what he saw, and then appropriated major parts of the project for his benefit and to the exclusion of those with whom he was working.

If these suggestions are in fact accurate representations of what happened, I have a hard time viewing the “innovator” as having done something noble. Breach of a fiduciary obligation seems a more accurate descriptor.

Josef Anvil (profile) says:

buisness majors? NOT

If the Winklevoss twins thought they have a multibillion dollar idea they would have gone about protecting it with a contract. Im not sure of all the details, but from what Ive read, it would appear that the twins were trying to create an exclusive social network for their elite friends.

Zuckerberg was just trying to do the best work he could do and ended up with something far beyond the scope of the original undertaking. Im sure that there could be a case made for the twins putting Zuckerberg on his path, and the settlement they got should more than compensate them for that.

The additional litigation just serves to highlight the point that is made in TechDirt constantly. IP rights have the effect of HINDERING innovation. That causes a lot more damage to an economy than piracy.

At this point, I would bet that Facebook has a number of patents in the social networking space that would prevent others from entering the market without having to deal with Facebook. I would hope this isn’t the case.

People should be allowed to build a better mousetrap without having to pay the inventor of the mousetrap. Isn’t that what innovation is all about. In our current legal environment, Thomas Edison would have been sued by the inventor of the oil lamp or candle.

With the internet we can see from the creation of mobile apps that there are tons of ideas that are out there and people are struggling to execute them without having to worry about patent trolls.

One of the funniest bits about all of this is that the media companies have a HUGE advantage with all the copyrights they control. IF they would wake up and release that content in a free service, they would be able to make millions of dollars on ad revenue AND destroy the motivation for a lot of piracy and win loyal happy customers. I guess they would rather pay lawyers than make money.

Gene Cavanaugh (profile) says:

Copyright and ideas

Ideas don’t matter – RIGHT ON, and that applies to all IP, IMO!
Execution and value matter – SO TRUE!
Someone who buys (or finds) a guitar and strums on it should be compensated – WHAT? Is there intelligent life on this planet? Even if I like the music this is the lowest value of them all, even if some “artists” are showered with money.

Fact Monkey says:

The majority of the claims the Winklevoss twins asserted deal with common law fraud and breach of contract. Just because the lawsuit involves a technology company does not mean it revolves around IP.

I’m going to bet Mike Masnick has not read a single legal filing from the docket, rather used this case and the twins to stump about his agenda for IP.

Unless you have an informed opinion on whether or not Zuckerberg defrauded the twins, don’t make assertions that they did not have a valid claim or reason to pursue Zuckerberg. Don’t underestimate the inability of someone to execute if they are defrauded.

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