Aug 13, 2013 -- It seems like only a year ago we watched Jesse Eisenberg (he of the floppy hair and moody expression) rise to fame playing the troubled but brilliant Mark Zuckerberg in The Social Network. Actually, the movie came out in 2010, and now it seems there’s another real life drama in the works, all in the name of sexy social media. Oh yeah, and there are millions of dollars at stake.
To recap, The Social Network saga showed Zuckerberg facing off against two bullies (a.k.a. betrayed co-conspirators) who had worked on “Facebook: The Prototype,” with him at Harvard. The movie echoed the real life drama which ended with Zuckerberg being taken to court by his former team, and settling for $65 million – a payout to the Winklevoss brothers and Divya Narendra.
Now we have a replay of this story, but this time it is king of the sext-ing app SnapChat. Launched in 2011 by Stanford students Evan Spiegel and Bobby Murphy, the app has amassed huge popularity for allowing the transmission of photos and videos that vanish in a set period of time, with no record stored on your cellphone. This has lead to a lot of venture capital investment and a recent report that values SnapChat at approximately $800 million. (Sums differ on different reports.) That’s a pretty sweet piece of pie, and has lead to a semi-identical Facebook lawsuit from an aggrieved ex-friend of Murphy and Spiegel.
Frank ‘Reggie’ Brown IV, a 23-year-old, claims he was part of the initial development team and wants his cut of the SnapLoot. He says he was doublecrossed by Speigel and Murphy and that he should have equity.
Brown was a student with Murphy and Spiegel at Stanford, and they lived in the same dorm.
They started work together on SnapChat – first called Pictaboo and Picaboo - however, somehow relations went south and their partnership dissolved. The company was first called Future Freshman LLC and was then renamed the Toyopa Group with no mention of Brown on the Crunchbase filing.
On the SnapChat blog there is zero mention of Brown.
“My co-founder Bobby and I met at Stanford in 2009. I was a freshman studying Product Design and Bobby was a junior working on his B.S. in Mathematical and Computational Science,” wrote Spiegel. “In April 2011 we moved into the not yet lucrative world of mobile photo sharing. We thought there was an opportunity to do something different. We wanted a place to share awkward selfie’s and funny photos with our friends.”
Further details have surfaced, making their wicked way across the web. This week new evidence has arisen on Business Insider which shows alleged text messages between Brown and Spiegel that gives Brown’s claim of ownership a lot more weight.
Supposed emails, texts exchanges, and group photos all suggest that Brown was pretty involved in the startup. Sure, Brown might not have filed a lawsuit till he saw the company was starting to make waves, but does that mean he should forfeit his rights - and did he have any to begin with?
In February 2013 Brown filed a lawsuit stating “that he originally conceived of the Snapchat concept, designed the logo, and came up with the app's original name”.The documents list seven complaints, which start with “betraying a fellow partner” and finish with “asking for relief (a.k.a money)”.
So far SnapChat have not been very responsive to these questions. There is no denying that Brown was involved in some way at the start of the business, but the level of his involvement is a tale of he said, and uh, he said.
This is the big question and so far all we really have is lots of conjecture. Well, that and some murky dealings. For instance, SnapChat’s current lawyer formerly consulted for Brown.
SnapChat is staying silent, releasing this statement to TechCrunch in February: "We are aware of the allegations, believe them to be utterly devoid of merit, and will vigorously defend ourselves against this frivolous suit. It would be inappropriate to comment further on this pending legal matter."
Two questions remain to be answered. Was Brown a key player in SnapChat creation, or was he an ideas man who didn’t do any work? Does that matter? Well, it depends on whether you think there’s value in an idea without the product to back it up. Then, there’s what patent law says in regards to conceptualizing ideas.
For instance, I have a lot of ideas a day. They range from genius (McDonald’s should sell McFlurry’s as a dipping sauce) to the mundane (I’d like two sidewalks, one to be the ‘fast’ lane). I’m pretty free with sharing these with everyone I meet. However, I have made zero attempts to actually instigate these concepts.
What if one of the many people I have told about these ideas were to act on it? First of all, that would be awesome, and secondly, what are my rights? Should I be entitled to any money even if I did zero work, spent zero time on it, but basically just had the brainwave?
A quick Google shows that in 2010, a London company was considering ‘tourist lanes’ for the slow-paced which is clearly a blatant copycatting of my own brain. However, just having an idea doesn’t actually entitle me to any payout at all.
U.S. Patent Attorney Gene Quinn says on his website, IP Watchdog that that “despite what these advertisements say, you cannot patent or protect an idea. You will need to move from idea to invention and ultimately to a patent application.” Whether or not Brown has a case will ultimately depend on how much work he put into SnapChat.
Another issue is whether SnapChat actually HAS any money to payout. Considering the valuation, you have to remember that this is all venture capitalist money and projected values, and that the company itself has no revenue model at all. Brown is asking for around 20-30% equity, and that could well be a percentage of nothing if SnapChat goes under.
For now, we’re going to have to wait and watch the SnapChat suit, and I have a feeling it’s going to be a long case, filled with awkward selfie’s.