Bill Gates and Mark Zuckerberg in nasty legal battles with former associates

Two of the true heavyweights of the tech world, Microsoft founder Bill Gates and Facebook founder Mark Zuckerberg, are facing bitter legal battles with former associates who claimed to have been duped by the pair.

Gates' fight relates to a start up company called Infoflows, run by former Microsoft employee Steve Stone.

In the late 1990s, Stone left Microsoft to start his own company, which focuses on providing the owners of photographs and videos a way to track the usage of their images and protect their copyright.

Infoflows eventually started talking about developments with Corbis, a big photo library and licensing company owned by Bill Gates and in June 2006 the two companies did a deal.

But four months later, the deal fell apart and a bitter legal battle ensued, with Infoflows suing Corbis for fraud, breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment and trade secret misappropriation.

Earlier this week, Infoflows announced that a court in Washington State had handed down its final judgement in the case, finding Corbis liable on two counts of fraud and for misappropriating Infoflows' trade secrets, breaching its contract obligations and acting in bad faith.

The jury originally awarded Infoflows $US36 million in damages, but this was later reduced to $US20 million in the final judgement.

Corbis has said it is disappointed with the judgement and is appealing. It has also tried to distance Gates from the case, claiming he was only present at one meeting between the two companies.

However, Steve Stone has taken the David and Goliath battle much more seriously.

"We thought we were working with friends," he told Seattle radio station.

"When we discovered they had improperly taken [the information], stabbed in the back is a perfect way of looking at it."

"To have a Bill Gates company basically claim that you stole their idea when in fact it was yours is just a horrible feeling. I just can't begin to explain it."

Over at Facebook, celebrations over hitting 500 million users have been tempered by a legal claim from a New York wood fuel salesman Paul Ceglia, who claims he owns 84% of Facebook as a result of a contract he signed with Zuckerberg back in 2003.

Ceglia claims that he employed a then 18-year-old Zuckerberg in 2003 to help build a photo database for insurers called StreetFax.

Ceglia claims Zuckerberg told him about a social networking project he was working on – which would later become Facebook – and asked Ceglia to invest $US1000. In return, Ceglia claims he signed a contract entitling him to 84% of Facebook.

Facebook has challenged the validity of the contract and is trying to have the case thrown out, although the company's lawyers concede Zuckerbeg did work for Ceglia.

The case is continuing.

Related Items :
Companies : Microsoft, Facebook, APA, AMP


Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.

busy
 

50 gems from Australia's top SME entrepreneursFREE eBOOK: 50 gems from Australia's top SME entrepreneurs

In this eBook you’ll read tips and advice from some of SmartCompany's favourite entrepreneurs

Register for the SmartCompany Newsletter and receive '50 gems from Australia's top SME entrepreneurs'.

Please enter a valid email address. For example fred@domain.com .

By submitting your email you are agreeing to our Terms & Conditions.

Free Daily Newsletter
SmartCompany Newsletter Please enter a valid email address. For example fred@domain.com .
Follow us:

By submitting your email you are agreeing to our Terms & Conditions.

Sponsored Links

Business Resources

Our Partners

 

Private Media Publications

Crikey

loading...

Crikey Blogs

loading...

StartupSmart

loading...

Property Observer

loading...

Leading Company

loading...
Smartco

DIRECT LINKS

TOPICS

OUR PARTNERS

NETWORK PARTNERS

 

SmartCompany.com.au is Australia's leading website for SMEs featuring business news, business information and business blogs. SmartCompany's archive of news, feature articles, entrepreneur interviews and business webinars cover topics such as advertising and marketing, buying or selling a business, starting a business, growing a business, franchising, SEO, superannuation and tax.
SmartCompany is a Private Media website

Online Solution by Valegro

Download SmartCompany eBooks: 10 quick sales and marketing wins | Steve Jobs: Lessons from a legend50 tips from Australia's top SME entrepreneurs

Popular on Partner sites: Small business awards | Property Investment Tips | How to Write a Business Plan | Technology in Business | Business MentorsBusiness to Business | Small Business | How to Write a Marketing Plan | Federal Budget 2012 | Federal Budget 2012 webinar25 start up ideas