"We believe this suit is completely frivolous and we will fight it vigorously," a Facebook spokesman said in a statement. Facebook and Zuckerberg have 30 days to respond, according to court documents.
On July 9, Allegany Court judge Thomas P. Brown; Ceglia's attorney, Paul Argentieri of Hornell, N.Y.; and Facebook attorney Lisa T. Simpson of New York, spoke via conference call, according to the local newspaper the Wellsville Daily. During that conversation, Judge Brown continued a temporary restraining order that prevents Facebook from transferring assets while the case continues.
Simpson filed a "notice of intent" to move the case away from the U.S. District Court for the Western District of New York in Buffalo, according to the Wellsville Daily.
Under the seven-year-old contract signed by Zuckerberg and Ceglia, the designer received $1,000 and a 50% stake in the site which eventually became Thefacebook.com, according to the suit. The lawsuit also says Ceglia is entitled to "an additional 1% interest in the business for every day after Jan. 1, 2004, until it was completed."
Terms of the work for hire contract state, "It is agreed that Purchaser [Ceglia] will own a half interest (50%) in the software, programming language, and business interests derived from the expansion of the service to a larger audience."
In papers filed with the Allegany, N.Y., County Court on June 30, Ceglia seeks a declaratory judgment and relief in the form of monetary damages and 84% ownership -- worth between $5.6 billion and $9.24 billion -- of the social networking giant, based on Facebook's estimated value of between $6.5 billion and $11 billion. Zuckerberg's personal fortune is worth between $4 billion and $5 billion, according to published reports.
After registering thefacebook.com domain in January 2004, Zuckerberg launched TheFacebook site a month later, signing up 1,200 Harvard students within about 24 hours, legend goes. In August 2005, the site officially became Facebook.com after the URL was purchased for $200,000, and 13 months later it expanded beyond educational institutions into a more general audience, accepting anyone older than 13 with a legitimate e-mail address.
This is not the first time Zuckerberg and Facebook have come under legal attack. In 2007, Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra, co-founders of ConnectU, took on their former Harvard classmate, claiming Zuckerberg took Facebook's software code and business plan from them. The parties reached a confidential agreement in 2008, although after a subsequent series of legal actions based on questions regarding the value of Facebook, a new agreement was reached, granting ConnectU $65 million in Facebook stock and cash.
Nor is it the first time Ceglia has dealt with the court system. Last year, New York attorney general Andrew Cuomo obtained a temporary restraining order against Ceglia and his wife Iasia, and accused them of defrauding customers of Allegany Pellets, their wood-pellet fuel company, according to the attorney general's office. The company took more than $200,000 from customers but failed to deliver products or refunds, the state said in a statement. That case is ongoing.
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