'The Winkelvi' Take Another Hit In Epic Battle With Zuckerberg Over Who Really Thought Up Facebook

Those who saw the movie 'The Social Network' will recall that a key element of the plot hinged on the question of whether young Harvard student Mark Zuckerberg stole from two older student athletes, the Winkelvoss twins (to whom Zuckerberg referred as 'the Winkelvi'), the core idea for what became Facebook. The Winkelvoss' and Facebook eventually settled for @$65 million, but the twins then had sellers' remorse and sued to get out of the deal so they could try to get even more. The judge has just ruled that they cant get out of their original deal. What's a deci-millionaire to do? Scott Morrison reports in the Wall Street Journal:

"A U.S. appeals court ruled Monday that the Winklevoss twins cannot back out of a settlement they struck with Facebook Inc. to resolve claims that founder Mark Zuckerberg stole their idea for the social network.

In a 2008 settlement, dramatized last year by the Hollywood film "The Social Network," Cameron and Tyler Winklevoss got $20 million in cash and $45 million in Facebook stock to drop their suit claiming that Mr. Zuckerberg deceived them when he agreed to work for their company, called ConnectU, on a similar website.

However, the Winklevoss twins, along with ConnectU co-founder Divya Narendra, tried to back out of the settlement, claiming they were duped about the valuation of the company. The ConnectU founders accepted their $45 million worth of stock at a price that valued Facebook at $15 billion--the same value that Microsoft Corp. had given Facebook in an investment in the company several months earlier.

Yet after they signed the settlement, the Winklevosses said they learned that Facebook's board had adopted an internal valuation of just $3.7 billion.

Goldman Sachs recently led a $500 million funding round in Facebook that values the Palo Alto, Calif., company at $50 billion. That gives the Winklevoss shares from the original settlement a value of about $150 million.

Facebook argued that the ConnectU founders were simply suffering from "settlers' remorse" in trying to back out of the settlement.

The U.S. Court of Appeals for the 9th Circuit agreed, saying the twins were not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace.

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

"For whatever reason, they now want to back out," the judge wrote. "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."

Facebook faces another suit over its origins in New York state, where wood pellet salesman Paul Ceglia claims he has a 2003 contract with Mr. Zuckerberg that entitles him to an 84% stake in the company. That case is making its way through the courts.

Facebook did not respond to a request for comment.