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Facebook close to putting ConnectU behind it

Facebook founder's legal dispute with former college buddies may be winding down, but CNET still wants to see some of the sealed documents in the case.

The legal spat is winding down between Mark Zuckerberg and the former college classmates who accused him of stealing Facebook's business plan from them.

The two sides will be in U.S. District Court in San Jose, Calif., on Wednesday to iron out the details of a settlement between Facebook and ConnectU, founded by Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra.

The three ConnectU founders claimed in a lawsuit filed in 2004 that Zuckerberg, Facebook's founder, stole ConnectU's code and business plan while all four were students at Harvard University.

ConnectU tried to back out of the settlement after a computer-forensics expert it hired discovered some of Zuckerberg's instant-messaging logs that the company claims is relevant to the case.

Once it obtained the logs, ConnectU accused Facebook of fraud and asked the judge to throw out the settlement. One of the reasons ConnectU gave was that Facebook never disclosed that it had altered the value of its common stock not long before February's settlement was reached.

Facebook, which is not publicly traded, did not deny that it had altered its valuation, and the judge in the case found nothing in Facebook's actions to be fraudulent.

As for what was revealed in Zuckerberg's IM logs, we don't know because the court has prevented the public from gaining access to much of the information in the case.

Indeed, the only fireworks left in the dispute might come from a third party: CNET Networks, parent company of CNET objected to U.S. District Judge James Ware's decision to close the courtroom for a June 23 hearing between Facebook and ConnectU and is pursuing a request to have the court unseal documents related to the proceedings. (CNET Networks has since been acquired by CBS in a deal that closed Monday.)

The reason for barring the public appears clear. Facebook doesn't want to reveal financial information, the content of Zuckerberg's IM logs, and the terms of the settlement. case. As my colleague Declan McCullagh wrote in a recent blog, the term "under seal" appears at least 234 times in the official court docket.

McCullagh wrote: "Not only should the courtroom not have been closed, but any audio recording or transcript of the proceedings should be released."