July 25, 2007 9:00 PM PDT
Judge unimpressed by ConnectU's case against Facebook
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ConnectU, which accuses Facebook of stealing its ideas, has been in legal pursuit of its rival, Facebook founder and CEO Mark Zuckerberg, and early employees Eduardo Saverin, Dustin Moskovitz, Andrew McCollum and Christopher Hughes for nearly three years, and there still isn't an end in sight.
Massachusetts Federal Judge Douglas P. Woodlock repeatedly stressed that there was simply not enough evidence to back up allegations that Zuckerberg, who had performed programming work for ConnectU while it was in development, had pilfered the start-up's business model and code. Facebook now boasts more than 30 million members worldwide, while ConnectU stands at well under 100,000.
Woodlock asked ConnectU's counsel, led by John F. Hornick of the Washington, D.C.-based firm Finnegan, Henderson, Farabow, Garrett & Dunner, to revise its court complaint before the case could go forward. "Claims must have a factual basis," the judge said. The allegations, which ranged from breach of confidence to fraud to misappropriation of trade secrets, comprised a "most evanescent of explanations," Woodlock said. He gave ConnectU's founders--Divya Narendra and twin brothers Cameron and Tyler Winklevoss--until August 8 to provide a revised complaint. He also gave Facebook two weeks after that date to respond.
Consequently, anyone who was hoping for a definitive answer from Wednesday's dismissal hearing for the ongoing legal tussle was likely left disappointed, as the case will probably not see much further development until the fall.
Woodlock also indicated that even the strongest of ConnectU's claims, the count of copyright infringement, is still on a shaky foundation. The reason, he said, is that the majority of the allegations date back to the days before either Facebook or ConnectU was a formal corporation, when all the founders of both companies were students at Harvard.
"It's gossamer thin on the question of contract," Woodlock said. Indeed, no formal deals were signed between Zuckerberg and the ConnectU founders, and the "paper trail" is limited to e-mails and telephone voice-mail messages that Woodlock recommended the plaintiffs spell out more effectively in their revised complaint.
Accusations of media grandstanding
Both the defense and the judge took issue with the plaintiffs arranging a press conference shortly following the hearing, indicating that it was an inappropriate and unprofessional move that turned the small legal hearing into a media spectacle. Hornick attributed the decision to hold the press conference to the unusual lifestyles of the twin Winklevoss brothers, who are rowers with Olympic aspirations. "(The Winklevosses) are training for the world championships in rowing in Munich (this summer)," the plaintiffs' counsel explained. "They are deeply and intensely involved in training."
"Until now, ConnectU has received very few requests from the press," Tyler Winklevoss said in a prepared statement. "We have recently received so much press in the past couple weeks that a press conference seemed a good way to provide information and not interfere with our daily lives." Additionally, Tyler Winklevoss said they wanted to clear up some of the speculation. "We have seen some inaccuracies in the media reports," he said. "We would like to correct them. For example, the media has reported that ConnectU wants to shut down Facebook; that is not true."
But while ConnectU insisted that its small press conference was a matter of logistical practicality rather than a grab for attention, it certainly didn't come across that way. Held at the posh Boston Harbor Hotel, the event was attended by newspaper reporters as well as broadcast journalists from network and cable television stations.
Facebook's legal team, on the other hand, wants to keep the case a quiet affair. Company representatives had made it clear to the media early in the week that no one from Facebook would be present at the hearing. Lead defense counsel I. Neel Chatterjee told the judge that the case had grown excessively bloated since ConnectU's founders made their initial allegations nearly three years ago, both in terms of the number of claims laid out by the plaintiffs and the media attention. "This case has kind of spun in a lot of directions and somewhat out of control," Chatterjee said.
Chatterjee represented Facebook and all of the individuals named as defendants, except for former chief financial officer Eduardo Saverin, who is no longer on the company's payroll and is represented by a separate lawyer.
The defense counsel, meanwhile, also accused ConnectU of reaching out for media attention in an attempt to raise its own profile. "ConnectU is trying to litigate this case through the press," he charged. And the judge seemed to be in agreement. "There is the aroma of the use of publicity about the case to gain an unfair advantage, and perhaps capitalize," Woodlock said.
It's going to be hard for Facebook to keep the press away. As a 23-year-old with an astonishing level of self-made wealth, Zuckerberg is an alluring figure indeed. And ConnectU's Winklevoss twins, who arrived at the hearing clad in matching navy blue pinstripe suits, have all the ingredients of a publicity magnet, too: they recently brought home gold and silver medals from the Pan American Games in Rio de Janeiro as members of the U.S. rowing team.
Facebook's attempts to cool down the press buzz may lead only to more speculation and gossip about the red-hot Silicon Valley company. The legal team's eagerness to lower the profile of the lawsuit, after all, may be interpreted as yet another indicator that the company is headed for either a multibillion-dollar buyout or an initial public offering. Because, as commentators have already pointed out, no company wants a lawsuit hanging over its head when there's a massive financial deal in the works--regardless of how shaky the plaintiff's allegations may seem.
CNET News.com's Zoë Slocum contributed to this report.
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