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Facebook fights ownership claim

| Tuesday, March 27, 2012

BUFFALO -- Attorneys for Facebook sought the dismissal Monday of what they called an "opportunistic and fraudulent" lawsuit by a New York man claiming half-ownership of the social networking site.

The attorneys asserted that Paul Ceglia of Wellsville had forged documents, fabricated emails and destroyed evidence, and said he had waited too long -- six years -- to file it and the statute of limitations had expired.

Ceglia's attorneys say their client deserves his day in court.

In his 2010 lawsuit, Ceglia claimed that a 2003 contract he and Facebook founder Mark Zuckerberg signed entitled Ceglia to 50 percent of Facebook, which debuted the next year.

Ceglia said the contract showed that when he hired Zuckerberg, then a Harvard University freshman, to help him develop a street-mapping database, he gave Zuckerberg $1,000 in start-up money for his fledgling Facebook idea in exchange for half-ownership of the company if it grew.

Zuckerberg countered that he hadn't even conceived of Facebook at the time. His lawyers accused Ceglia of doctoring the original "work-for-hire" contract to insert Facebook references and making up a series of email exchanges between Ceglia and Zuckerberg to try to bolster the claim.

"Verifiably genuine emails" between Zuckerberg and Ceglia from Zuckerberg's old Harvard account contained no mention of Facebook, according to the court filing by the Washington firm Gibson, Dunn & Crutcher LLP.

"This is an untimely, opportunistic and fraudulent lawsuit," began one of several long and detailed documents Facebook filed yesterday in support of dismissal. "The purported contract is a forgery, the so-called 'emails' that Ceglia quotes ... are fabrications and Ceglia is a convicted felon and well-known scam artist."

A Facebook private investigator's report on Ceglia found a 1997 conviction in Texas for possession of hallucinogenic mushrooms, a 2005 no-contest plea to trespassing in Florida and a 2009 petition by the New York Attorney General's Office accusing Ceglia and his wife of defrauding customers of their wood pellet business by accepting upfront payment for pellets they never delivered.

Ceglia's lead attorney, Dean Boland of Lakewood, Ohio, said the lawsuit can't be dismissed just because the findings of Facebook's experts contradict those of Ceglia's experts. He accused Facebook of trying to end the case before being required by the court to provide any evidence or have it heard by a jury.

"Mr. Ceglia deserves his day in court, where the jury will resolve this dispute over the ownership of Facebook," a statement from Ceglia's legal team said.

Facebook, based in Menlo Park, Calif., has 800 million active users and employs more than 3,200 people, the company said, adding that users spend more than 10.5 billion minutes per day on the site.

An upcoming initial public offering of stock could value Facebook at as much as $100 billion.

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