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Facebook foes lose appeal

Cameron and Tyler Winklevoss, who accused Mark Zuckerberg of stealing the idea for Facebook, lost their latest appeal to contest a 2008 $65 settlement between the parties.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
2 min read

The real-life drama between Cameron and Tyler Winklevoss and Facebook founder Mark Zuckerberg appears to be over, as a federal appeals court judge tells the twin brothers to accept their $65 million settlement with Facebook and move on.

Facebook founder and CEO Mark Zuckerberg

On Monday the U.S. Court of Appeals for the Ninth District ruled in favor of Facebook, and upheld the 2008 settlement agreed to by Facebook co-founder and CEO Mark Zuckerberg and Cameron and Tyler Winklevoss and their partner Divya Narendra (See the ruling here (PDF)).

In that settlement, the Winklevosses and Narendra agreed to accept $65 million in exchange for dropping their lawsuit against Zuckerberg. They also freed Facebook from any further litigation. In their original suit, the Winklevosses and Narendra accused Zuckerberg of stealing their idea for a social-networking site called ConnectU. Zuckerberg denied the allegations, but settled the case in 2008. The conflict was depicted in the Academy Award-winning film The Social Network, released in 2010.

Later, the Winklevosses and Narendra claimed that the 2008 $65 million settlement was not valid because Facebook did not disclose an accurate valuation of the company. Facebook is the largest social-networking site in the world and is worth more than $50 billion. The stake in the company that was agreed upon three years ago is now worth more than $160 million.

"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," wrote Chief Judge Alex Kozinski. "And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook."

The judge continued in his ruling: "For whatever reason, they [the Winklevosses] now want to back out. Like the district court, 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."

In a statement Monday, Facebook's deputy general counsel, Colin Stretch, said: "We appreciate the Ninth Circuit's careful consideration of this case and are pleased the court has ruled in Facebook's favor."