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[S1,E10 Expert] You will be surprised what Facebook’s former attorney says is true in The Social Network movie

Experts, Interviews, Season 1

We’ve all heard about The Social Network movie, which portrays the founding of Facebook and the resulting lawsuits. In the movie, as well as in reality, Winklevoss brothers claimed that the idea behind Facebook was theirs, and Facebook’s co-founder Eduardo Saverin claimed that he was purposely induced to sign an agreement that led to significant dilution of his shares.

The issues leading to the above lawsuits are not an uncommon thing in the startup world. I invited Mark Howitson, former Deputy General Counsel at Facebook, who was actually leading the famous cases, to join me on the show and share his thoughts about whether similar problems can be avoided by startup founders, and how. Mark also comments on how much truth about the Facebook’s lawsuits is conveyed in the movie and published on the Internet.

I feel very honored that Mark accepted my invitation, since he doesn’t appear much in the media, and until now he hadn’t publicly commented on Facebook’s cases. Watch the interview carefully, as we refer to the lawsuits throughout our talk.

Here are some highlights:

  • It’s important to carefully think about what we say when sharing our ideas:

    “You’ve got to make a judgement about what are you going to disclose to people you are talking to.”

  • Did Winklevoss brothers sign NDA with Mark Zuckerberg?:

    “They had no agreement whatsoever to prove that there was an agreement to keep anything undisclosed, quiet or confidential. Above and beyond, whether or not there was any copying of anything. Which, there wasn’t.”

  • When someone is doing some work for a startup, it’s necessary to sign the agreement saying that what they create becomes owned by the company:

    “Like the NDA, the agreement that you often have for people who perform services for you, is a Proprietary Information Agreement. It’s an NDA, but it also adds language related to who owns intellectual property that the person creates while he or she is working for you.”

  • “I’ll sue you!” is pretty common in America:

    “One of the beautiful and problematic things in United States is that people sue each other constantly.”

  • You can protect yourself from being fired from the company for unfair reasons:

    “It’s not uncommon in an employment arrangement for the Executives or senior people in a startup to have a provision in their employment agreement saying, that they can only be fired for cause.”

  • Here is the main accusation of Mark Zuckerberg’s co-founder:

    “Mr. Saverin was saying that he was fraudently induced to sign an agreement, because he wasn’t told about all the different dilutions were going to happen to the company. That issue was never resolved in court about who was right.”

  • The accusations that Mark Zuckerberg faced became so controversial because of Facebook success.

    “The disputes in the situations that Facebook faced are not terribly unusual, they were just magnified by the success of the company and public position that Mark holds. Then and now.”

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