Facebook calls ownership contract a 'forgery'

Social network amps up rhetoric in lawsuit over company ownership

Facebook is going one step further in its verbal battle against the man who says the company's founder and CEO Mark Zuckerberg signed away ownership of 84% of the social networking site seven years ago.

A spokesman for Facebook said in an email to Computerworld Friday morning that the company "strongly" believes any contract that would be produced for the courts would be a forgery.

Questions over who really owns Facebook cropped up after Paul D. Ceglia of Wellsville, N.Y. filed a lawsuit June 30, alleging that he signed a pact with Zuckerberg in 2003 that entitles him to 84% ownership of the company. According to court documents, Ceglia claims he had a written agreement with Zuckerberg to design and build a Web site that eventually turned into the wildly successful site.

He also alleges that he was paid $1,000 for the work and for a 50% stake in the site, along with an extra 1% for every day until the Web site was completed.

Facebook has called the lawsuit "frivolous" all along and has vowed to fight it in court.

Earlier this week, though, in an interview with Diane Sawyer of ABC News, Zuckerberg said he is "quite sure" he didn't sign a contract giving a former Web designer ownership of the company. Zuckerberg, however, didn't say he absolutely did not sign any contract, and stayed just this side of fully rebutting the allegation.

Today's statement seems to have amped up the company's assault on the claim.

"Mark [Zuckerberg] has made it clear that Ceglia's claims are absurd and we strongly suspect the contract is forged," said Andrew Noyes in an email. "However, we have not seen the original (no one has, including the court). Thus, we're focusing on the things that are not open to interpretation and are indisputable. Mark could not have given interest in a company that didn't exist or an idea he had not thought of yet. And, even if he could, the statute of limitations has expired."

An 84% stake in Facebook would turn into a sizable fortune.

Just this week, the company, which has become the dominant social networking site in the world, announced that it has grabbed its 500 millionth user.

While the lawsuit winds its way through the legal system, Ceglia faces other legal challenges.

Late last year, New York Attorney General Andrew Cuomo obtained a temporary restraining order against a western New York wood-pellet fuel company, Allegany Pellets LLC, owned by Ceglia and his wife, Iasia. The company allegedly took more than $200,000 from consumers and then failed to deliver products or refunds.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

Copyright © 2010 IDG Communications, Inc.

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