An attorney for Facebook Inc. said she was “unsure” whether company founder Mark Zuckerberg signed a contract that purportedly entitles a New York man to 84 percent of the world’s biggest socialnetworking service.
Paul Ceglia filed a complaint against Facebook and Zuckerberg in state court in New York’s Allegany County on June 30. Ceglia claims that a contract he and Zuckerberg signed in April 2003 entitles him to ownership of most of the closely held company. Ceglia’s lawyer produced the document Tuesday at a hearing in federal court in Buffalo, N.Y.
“Whether he signed this piece of paper, we’re unsure at this moment,” Facebook lawyer Lisa Simpson told U.S. District Judge Richard Arcara.
Ceglia isn’t the first to cast doubt on the origins of Facebook, which is worth $24.6 billion, according to SharePost. com, a marketplace for closely held firms. Its paternity was questioned by Zuckerberg’sformer Harvard University schoolmates, who claimed he used code developed on their ConnectU project to start Facebook. They settled in 2008.
Facebook has “serious questions” about the authenticity of Ceglia’s contract claim, Simpson said.
“Mr. Zuckerberg did have a contract with Mr. Ceglia,” Simpson said. Zuckerberg, 26, worked for Ceglia as a computer coder, she said.
Ceglia has asked the federal court to extend a state judge’s order barring the transfer of ownership interests in the Palo Alto, Calif.-based company.
Facebook said Ceglia remained silent for more than six years and his claim is probably too old to pursue. Also, Ceglia claims his purported contract, which refers to “The Face Book,” was signed about nine months before the company was founded, Facebook said.
Tuesday in court, Ceglia’s attorney, Terrence Connors, produced the two-page “work for hire” contract that his client said entitles him to control of the social-networking service.
Connors told the judge that Ceglia was a Web designer trying to develop a project called “StreetFax” in the spring of 2003. Ceglia’s plan was to put millions of photos of streets into a database and charge insurers money to access it.
“What he needed was a coder,” Connors told the judge.
Ceglia solicited bids to do the work. The lowest bidder was Zuckerberg, then a freshman at Harvard University. Zuckerberg said he would do the job for $1,000, Connors said.
“But I’ve got a project of my own,” Connors said Zuckerberg told his client. “I’m developing an online yearbook for Harvard kids now, but I’m thinking of expanding it.”
The contract was intended to cover the coding work onStreetFax and Ceglia’s investment in Zuckerberg’s “fledgling project,” Connors said. “Who knew then that it would turn into what it is today?”
The case is Ceglia v. Zuckerberg, 10-CV-00569, U.S. District Court, Western District of New York (Buffalo).
Business, Pages 20 on 07/21/2010