Winklevoss Twins Told To Accept The Millions Facebook Has Already Given Them And To Stop Complaining

from the this-ends-now dept

Could it finally be over? The Winklevoss twins, Cameron and Tyler, along with Divya Narendra, famously sued Mark Zuckerberg, claiming he “stole” the idea of Facebook from them. They eventually sued him and then settled, getting (at the time) $65 million in cash and Facebook stock. You may have heard about it, considering there was a big Hollywood movie based loosely on all of this. Of course, the whole concept was preposterous. There were tons of other social networks at the time, and you can’t “steal” an idea. But, in the grand scheme of things, paying off those guys was easier than continuing to fight it. Yet, after the settlement was done, the twins tried to back out of the settlement, claiming their share should have been much higher. Despite a court shutting them down, the twins kept fighting. Hopefully, that’s now over. Judge Alex Kozinski is is trying to put an end to the whole thing, saying that the original settlement stands.

The full ruling from Kozinski is, in typical Kozinski fashion, an entertaining read. He points out that the point of the original settlement was so that everyone could “get on with their lives.” Kozinski is particularly harsh on the Winklevosses for trying to back out of the agreement over a claim of valuation issues when they clearly knew what they were getting into:

The Winklevosses are sophisticated parties who were locked in a contentious struggle over ownership rights in one of the world?s fastest-growing companies. They engaged in discovery, which gave them access to a good deal of information about their opponents. They brought half-a-dozen lawyers to the mediation. Howard Winklevoss–father of Cameron and Tyler, former accounting professor at Wharton School of Business and an expert in valuation–also participated.

Kozinski also knocks the Winklevi for being marketplace losers resorting to the courts to sue those who beat them in the market:

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. 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 favorable in light of recent market activity.

As Kozinski notes, while they’ve been arguing about all of this, Facebook has continued to appreciate in value, and their “settlement” is now worth much more than they even thought they would get originally. He concludes it simply:

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.

And so, they “lose.” Of course, it’s hard to see how getting $160 million for totally failing in the marketplace can be considered “losing.”

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Companies: connectu, facebook

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Comments on “Winklevoss Twins Told To Accept The Millions Facebook Has Already Given Them And To Stop Complaining”

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26 Comments
Prashanth (profile) says:

Here is my take on the movie and the original case, though I am not a legal scholar by any means — I’m just an avid TechDirt reader:
The movie was pretty good, pretty entertaining, and never boring. Most mainstream publications have said after interviewing many of the real people portrayed in the movie that the characters’ personalities are often quite different from the corresponding real personalities. Other than that, it’s good at illustrating what the cases were about and what each side had to say about them. I don’t think the Winklevoss twins were made to be tragic heroes of any kind; I think the movie did a good job of making at least me think that they are whiny rich brats who can’t give good ideas proper execution. For that same reason, I think the only thing that they could ethically and reasonably charge against Mark Zuckerberg is breach of contract; through their face-to-face and electronic communications, Zuckerberg had agreed to contribute work to the Winklevoss twins’ project, and he instead diverted that work to form his own competing project. Other than that, they don’t really have much of a case. And this? Give me a break. They aren’t happy with $160 million for not being able to properly execute an idea? If I had a penny for every time that I was wrong, I would be quite a rich person by now. (Oh, and I thought the dispute between Narendra and the Winklevosses about how “suing is not gentlemanly and unbefitting of Harvard students” was hilarious, and I totally agreed with character Larry Summers’s words.)

Jay (profile) says:

Re: Re:

I do want to stress that the movie is based on the book, where the author is Aaron Sorkin. This is pure Hollywood BS which is used to hype up the ideals of each person and tell a tale. Yes, there are a few parts that are real but that movie is based on a lot of fictionalized parts such as making Mark a distant loner, the twins somewhat tragic in their conflict, and Mark’s best friend (name escapes me) as the “hero” of the flick while JT makes Sean Parker look like a wild child (though, that may be the only accurate part of the movie)

Take it as a story and understand the gist of it, just don’t take it as gospel.

Prashanth (profile) says:

Re: Re: Re:

I know I didn’t stress it quite enough (I always think I stress a point enough but I never do), but I understand that the character portrayals are pretty inaccurate. The accuracy comes with the chronicling of the events, though again the details are probably embellished; the point is, the lawsuits and their results actually happened, as did the communiques between Mark Zuckerberg and the Winklevosses/Eduardo Saverin (his friend).

Anonymous Coward says:

Re: Lawyers Share

I truly don’t understand this logic. Its like when someone wins the lottery and the state takes their half (or so… whatever) in taxes and the people are like I got cheated! This isn’t really a ridiculous amount of money, I -deserve- to keep more! It’s more than you had though isn’t it? If someone offered you what you ended up with “tax free” you would be super excited right? Why is it that when someone offers you double and takes half you put on the frowning face?

klaypigeon says:

seriously

OMG, these twits are tthe biggest whiners ever. They already rode his coat tails to 160 million and they think they are entitled to more? Give me a break. Even if Zuck had done their site he would have never taken it to the heights he has taken Facebook, he is smarter than that. These to should take this money and go buy some balls, chest hair, and a seriously huge cup of gratitude.

misterdoug (profile) says:

It's not hard to see...

it’s hard to see how getting $160 million for totally failing in the marketplace can be considered “losing.”

But it’s not hard to see how this is a symptom that our legal system is mind-bogglingly broken beyond repair, when attorneys can use it to extort a vast fortune for themselves and two utter twits. When you look at how the system works today, it should be legal to just beat the crap out of someone and take their money. Why only give that privilege to people with law degrees?

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Gene Cavanaugh (profile) says:

"Pegging" on one extreme or the other

If one party is successful, we assume the other party would have been (or was) totally unsuccessful, whether they had a chance to try or not.
True, Zuckerberg, who seems to be completely amoral (he understands moral behavior, he just doesn’t seem to have any), was very successful – does that mean that the twins, who were, granted, moving a little slower (and more ethically) would have failed completely?
I think a better answer is, “we don’t know”.

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