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Zuckerberg admits working for man claiming Facebook ownership

Claims of frivolity looking more frivolous

Internet Security Threat Report 2014

So it may not be "completely frivolous" after all.

A lawyer for Mark Zuckerberg has admitted he did have a contract with Paul Ceglia, a New York wood fuel salesman who claims he owns 84 per cent of Facebook as a result.

"Mr Zuckerberg did have a contract with Mr Ceglia," Facebook lawyer Lisa Simpson told a federal court yesterday, Bloomberg reports.

Ceglia, also a web designer, claims that he employed Zuckerberg via Craigslist in 2003 for $1,000 to code a project called "StreetFax", a photo database for insurers.

An 18-year-old Zuckerberg told Ceglia, it's alleged, that he was building a social network for Harvard students and asked him to invest in the development, which he says he did in the amount of another $1,000. The social network was the forerunner to Facebook, Ceglia says.

A copy of the contract in Ceglia's complaint refers to a site "designed to offer the students of Harvard university access to a wesite [sic] similar to a live functioning yearbook with the working title of 'The Face Book'". It appears to be signed by Mark Zuckerberg.

The contract, due for completion on 1 January 2004, granted Ceglia a 50 per cent stake. For every day past the due date he would be granted a further one per cent, leading to his 84 per cent ownership claim.

Despite admitting Zuckerberg had a contract with Ceglia, Facebook's lawyers disputed the authenticity of the document in the complaint. "Whether [Zuckerberg] signed this piece of paper, we're unsure at this moment," Simpson told the court.

"What the contract asserts is there is a relationship about Facebook and there isn't one."

Yesterday's hearing concerned a temporary restraining order obtained by Ceglia that would have prevented Facebook from transferring any assets. The sides agreed to let the injunction - which was stayed anyway - expire on Friday. Facebook will try to have the case thrown out.

The timing of the Ceglia case isn't great for Zuckerberg. His business practices while at Harvard are about to become widespread knowledge with the launch of the movie The Social Network. It covers his dispute with the Winklevoss twins, who alleged he stole code when they employed him to develop their site, ConnectU. Facebook paid them $65m to go away. ®

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