The Winklevoss twins, who claimed to have invented Facebook and then got swindled out of sharing in the company's successes, have lost their final appeal in the matter and must accept the terms of a previous settlement. As dramatized in the recent movie The Social Network, the twins feel they were deceived twice by purported Facebook founder Mark Zuckerberg—first when he stole their idea for Facebook, and later when they accepted a settlement based on what they say is an undervalued assessment of Facebook.
But a US appeals court judge ruled this week that the twins are simply suffering from "settlers' remorse" and cannot back out of the settlement they reached in 2008.
"For whatever reason, they now want to back out," the judge wrote in his ruling. "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."
“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," the judge continued. "And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook."
Assuming it's true, the Winklevoss story is one of epic betrayal and deception. They claim to have come up with the idea for a service called Harvard Connection (later renamed to ConnectU) while students alongside Zuckerberg at Harvard University. ConnectU was a social network, aimed at connecting students at Harvard and elsewhere. The twins hired Zuckerberg to join the team and help with the coding. Zuckerberg agreed but contributed little while making a long series of well documented promises to finish his work.
During this time, Zuckerberg registered the domain name thefacebook.com and started a rival service called The Facebook, and he quickly coded the site himself while ignoring his ConnectU obligations. The Winklevosses found out about The Facebook in a school newspaper—as well as its aim of duplicating all the functionality the three had previously discussed for ConnectU. The brothers fired off a cease-and-desist letter and lodged complaints with Harvard, which proved uninterested in overseeing the matter. The twins sued.
Meanwhile, The Facebook was renamed Facebook and quickly rocketed to fame and fortune. So in 2008, the Winklevoss twins settled their suit with Zuckerberg and Facebook, walking away with shares in Facebook worth about $65 million, based on the value of Facebook at that time. But the twins claimed later that Facebook had undervalued itself during the negotiations, and they appealed the settlement. A federal appeals court ruled this week that the original settlement was valid and enforceable. It made no ruling on the Winklevoss' various claims against Zuckerberg or Facebook.
But it's not all bad: With more than 500 million members, Facebook today is worth roughly $50 billion, so the twins' share in the company is now worth over $160 million.
