Fresh legal woes for ConnectU founders

Remember file-sharing site I2hub? Its creator claims that due to a partnership with social network ConnectU, he's entitled to part of ConnectU's Facebook settlement money.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
5 min read

It must have been quite the unwanted holiday gift: CNET has learned that there's a new lawsuit on the table against Cameron and Tyler Winklevoss, the identical twins who alleged that Facebook founder Mark Zuckerberg stole their code and business plan--and who will be prominent supporting characters in the forthcoming film "The Social Network."

Now, a former partner of the twins claims in the suit that he was shut out of ConnectU's own business and is owed a part of the settlement it recovered from the Facebook suit.

The court complaint obtained by CNET, filed December 21 in Superior Court in Suffolk County, Mass., names as defendants ConnectU, the Winklevoss twins, their father and investor Howard Winklevoss, their business partner Divya Narendra, and their attorney Scott Mosko along with his firm Finnegan, Henderson, Farabow, Garrett, & Dunner. The suit attempts to recover damages for the denial of plaintiff Wayne Chang's alleged ownership rights in ConnectU, as well as to charge the legal team with negligence and a failure to represent Chang adequately in court.

He states in the complaint that he retains a 15 percent stake in ConnectU, held a 50 percent stake in the now-dissolved joint venture he formed with the twins, and therefore is entitled to part of the ConnectU vs. Facebook case--a $65 million mixture of cash and Facebook stock.

"All litigation was ultimately settled without Chang's knowledge of the terms," explained a statement provided upon request by Chang's law firm, the Boston-based Rose Chinitz & Rose LLP. "In fact, ConnectU was sold to Facebook for millions of dollars in cash and Facebook stock. That settlement benefited the Winklevosses--not Chang. Through this litigation, Chang asserts his ownership interest in The Winklevoss Chang Group and ConnectU, including the settlement proceeds."

Cameron and Tyler Winklevoss were not immediately available for comment. The argument in their favor, however, would likely be that they had already sued Zuckerberg over ConnectU's intellectual property long before Chang had partnered with them.

Chang may be a familiar figure to those who followed the brutal legal battles over peer-to-peer file sharing in the middle of the 2000s. He was a former University of Massachusetts, Amherst student who'd created a file-sharing program for college students called I2hub in late 2003, right around the same time that Facebook itself emerged. The peer-to-peer software relied on Internet2 networks, supercharged connections available at many universities and research institutions. In August 2004, I2hub's administrators said students at 226 universities around the world were using it, chalking up 344,000 hours on the network in the previous month alone.

This popularity brought I2hub to the attention of the Winklevoss twins, by that point recent graduates of Harvard. They had already filed their original suit against Zuckerberg and the nascent but fast-growing Facebook, the details of which form much of the plot of "The Social Network" and the book that it's based on, Ben Mezrich's "The Accidental Billionaires." According to Chang's court complaint, the twins approached him and proposed going into business together; Chang agreed and the team formed The Winklevoss Chang Group. The complaint explains that the integration "(provided) ConnectU with I2hub's assets, including thousands of its users, its technology, its publicity, and its reputation." It adds that Chang helped build new ConnectU technologies, including a textbook resale site called Jungalu.com and an aggregator called "Social Butterfly" that pulled in data from external social-networking sites, including Facebook.

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The I2hub.com Web site now redirects to Waynechang.com, which is also Wayne Chung's LinkedIn profile. The top of that profile is shown here. Waynechang.com

Very little has been made of the relationship between I2hub and ConnectU. A 2005 article from University of Massachusetts student publication Daily Collegian, no longer publicly available but cached in Google, covered the I2hub phenomenon and noted that "The I2hub has created a partnership with ConnectU, an online social network, to allow users to share personal online profiles that may be accessed through the I2hub. Students will be allowed to use their existing profiles from sites such as ConnectU, TheFacebook, and Friendster, and import them to the hub."

But in April 2005, the court complaint alleged, Cameron and Tyler Winklevoss severed ties with Wayne Chang. An instant message conversation between Chang and Tyler Winklevoss, included in the court documents, reveals that the Winklevosses staked a claim to a bigger share of The Winklevoss Chang Group because they had contributed more financial backing. Shortly thereafter, the complaint says that the Winklevosses "informed Chang that they were ceasing any further funding and were terminating their relationship with Chang."

"Through this litigation, Chang asserts his ownership interest in The Winklevoss Chang Group and ConnectU, including the settlement proceeds."
--Lawsuit filed by Wayne Chang against Winklevosses in Suffolk County, Mass.

Also in the spring of 2005, the RIAA began targeting students whom it had flagged for using I2hub to engage in music and video piracy. In November 2005, slightly more than a year after the business partnership was formed, I2hub closed its doors in the wake of heavy pressure from the entertainment industry's legal muscle. According to the court complaint, though, Chang remains in control of the company and its intellectual property.

Though no longer in partnership with the Winklevosses, Chang was regardless named as one of the plaintiffs in the 2007 countersuit filed by Facebook in which the social network accused ConnectU of scraping Facebook users' e-mail addresses and spamming them with ConnectU invites. This, according to the Chang vs. Winklevoss et al. complaint, was the result of Chang's Social Butterfly product; Chang alleges that he was insufficiently represented by ConnectU's attorneys in this case.

Meanwhile, ConnectU faded away--the company has long alleged that this was because Zuckerberg, under ConnectU's employ as a programmer, worked on Facebook as a side project and launched that first instead--and the suit against Facebook was eventually settled in August 2008.

It's nothing extraordinary for there to be legal battles over the early intellectual property of a start-up that eventually gets huge, particularly when board rooms are replaced with dorm rooms and contracts take the form of instant-message conversations. But the ConnectU-Facebook saga has been an unusually alluring one: centered on Zuckerberg, widely considered to be the youngest self-made billionaire ever, the tale gets more colorful when you consider the photogenic Winklevosses, natives of upscale Greenwich, Conn., who were members of the U.S. Olympic rowing team in 2008. Cameron Winklevoss is now the publisher of Guest of a Guest, an upstart New York society blog; both twins are currently in business school at Oxford University in the U.K.

The legal battle will be thrust even more into the mainstream when "The Social Network," directed by David Fincher ("Fight Club") with a screenplay penned by "West Wing" creator Aaron Sorkin, hits theaters this fall. Twenty-three-year-old actor Armie Hammer is playing both Winklevoss twins with the help of some computer wizardry and camera tricks.

Chang and I2hub are not depicted in the screenplay.