Wednesday, July 14, 2010

Last month, Paul D. Ceglia filed suit against Facebook, the world’s largest social network, claiming that he rightfully owns 84 percent of the company. The lawsuit, filed in the Supreme Court of the State of New York, bases its claims on a 2003 contract between Ceglia and Facebook founder and CEO Mark Zuckerberg. The contract reportedly states that Zuckerberg would give Ceglia 50 percent ownership in the company in exchange for designing a website “similar to a live functioning yearbook with the working title of ‘The Face Book’,” and paying a US$1000 fee. Ceglia would also get an extra percentage point every day after January 1, 2004 until the work was completed.

Earlier this month, Judge Thomas Brown issued a temporary restraining order that prevents transfer of Facebook’s assets in light of the ongoing lawsuit. According to Victor P. Goldberg, who teaches at Columbia University’s Law School, the lawsuit may get tripped up by the statute of limitations, which is six years in New York. PC World says that one problem with Ceglia’s claim is that the contract was purportedly signed in 2003, while Zuckerberg didn’t register the domain name thefacebook.com until January 2004.

This is not the first time Ceglia has appeared in court. In 2009, New York’s Attorney General Andrew Cuomo accused Ceglia of fraud. The state claims that Ceglia took more than $200,000 from customers of a wood-pellet fuel company, and failed to deliver any products or refunds; this case is still ongoing. A Facebook spokesman has stated that they believe this suit is completely frivolous and will fight it vigorously.