If you haven’t already seen The Social Network, you need to. It took best picture at the Golden Globes and is in a tight race with The King’s Speech for best picture at the Oscars. It’s hard to think of a better reflection of the time, given Facebook’s incredible surge in popularity and recent overtaking of Google as the most viewed site on the web. But after watching the film, some real legal questions may linger: Was there further litigation by the Winklevoss twins and Divya Narenda against Facebook? Did the film accurately portray Mark Zuckerberg and Sean Parker and might either have a case against their film portrayal?
Full-court press for the twins
As told in the final scene of the film, Zuckerberg and Facebook settled with the Winklevoss twins and Divya Narenda in 2008 for $65 million. What was not disclosed in the movie: The twins subsequently filed suit, questioning the legitimacy of their prior settlement agreement. Their argument: Facebook’s board of directors failed to accurately represent the company’s value during negotiations that led to a signed agreement. As a result, they should have received four times the number of Facebook shares, which would make any new settlement worth more than $600 million, based on a recent valuation of Facebook at more than $50 billion.
But in June, 2008, U.S. District Judge James Ware granted Zuckerberg’s motion to enforce the settlement agreement: in part because the twins failed to establish that a misrepresentation occurred during the negotiation; in part, because they failed to tender sufficient evidence of fraud. The court noted the parties were in roughly equal bargaining position and that the language of the agreement clearly conveyed the parties’ intent to release all claims. While there were rumors late in 2010 of renewed litigation by the twins against Facebook, the site’s official response has been this.
“There is no new litigation between Facebook and the Winklevosses. The only recent litigation activity is when the Winklevosses recently lost their malpractice action against their former law firm, Quinn Emmanuel. The filings referred to here are simply the filings by Facebook and the Winklevosses in the Winklevosses’ now two-year old (see above), thus far unsuccessful, attempt to undo their 2008 agreement to settle the parties’ dispute.”
Not so fast, Facebook. The rumors are, indeed, true. The Los Angeles Times has reported that the Winklevosses’ are undeterred in their push to overturn what they call the “artificially cheap” 2008 settlement agreement, this despite Facebook’s multiple court victories on the issue. Last month, the twins asked a federal appeals court in San Francisco to overturn the 2008 settlement. Do they have a shot this time?
It looks unlikely. At a January hearing, U.S. Court of Appeals Chief Judge Alex Kozinski said, “to me, it looks like it’s got everything you would want in a contract.”
Don’t weep for the twins, though: Even if they lose, they still get to keep their current settlement, the stock portion of which has been rising in value to a reported $160 million.
They spelled the names right
A certain school of belief about publicity is that the only thing that matters is that it occurs (Just spell my name right, please, goes the saw …) So while Zuckerberg and Parker, the Napster founder, both publicly have shrugged off their on-screen characterizations as pure fiction, would they have legal avenues to pursue over their unflattering depiction in Aaron Sorkin’s Oscar-nominated screenplay? That issue got taken up in an excellent article by Mark Fischer and Franklin Levy of Duane Morris LLP, who conclude that the courts would likely rule against Zuckerberg if he were to take legal action. Plaintiffs face a high burden of proof in false-light privacy actions and right of publicity actions: They must prove with clear, convincing evidence not only major misrepresentations of character but also that those were made with actual malice. If Zuckerberg got into such a wrangle, he could expect brutal discovery on his entire life.
The normally reclusive billionaire, media analysts noted at the time, took into account the negative effects his bracing movie portrayal might have, making two high-profile public appearances before the film opened: in July, 2010, he appeared on ABC’s World News with Diane Sawyer, describing the film as a fictional Hollywood portrayal that jazzed up what was, in truth, a boring story; in September, 2010, Zuckerberg announced live on Oprah Winfrey’s TV show his $100 million donation to the Newark, N.J., public school system. And though Zuckerberg received an enigmatic, lonely, reserved portrayal in the film, he reportedly has a net worth of $6.9 billion (in September ,2010) to console himself.
As for his take on the film, it’s also worth noting he and 1,200 Facebook staffers went on a company field trip to see the film in a theater.
A rakish portrayal vs. real life
As for Parker? Justin Timberlake portrays him as a charismatic charmer who takes advantage of Zuckerberg to acquire a piece of Facebook. Parker is shown as a womanizer, a party animal, and, the film hints that he persuaded Zuckerberg to betray his best collegiate pal and Facebook co-founder, Eduardo Saverin. Would a court find this portrayal a major misrepresentation? Parker has called the character Timberlake created a “morally reprehensible human being”. Was this misrepresentation made with actual malice? As the Duane Morris LLP article points out, this would be difficult to prove and courts would be loathe to circumscribe filmmakers’ freedom of artistic expression.
Ultimately, as Parker said at a recent conference in Europe: In the movie, Timberlake’s high-life hijinks, including dates with Victoria’s Secret models, appear cooler than what occurred in real life. Sorkin has put a high-brow spin on it saying: “Aristotle and the classics were my roadmap for this, this is simply one that takes place against the backdrop of Harvard and a very modern invention”.
But the Winklevoss twins believe the film is spot on, especially in capturing dark deeds done to them. When asked if he would disclose a new business plan, Cameron Winklevoss replied to his interviewer: “I’d tell you about it, but you know, I don’t want to get Zuckerberged and someone run off with my idea”.