The Facebook lawsuit that hasn’t gone away

connectu.jpgBefore he launched Facebook at Harvard, Mark Zuckerberg worked for two brothers on a project called HarvardConnect.com that also wanted to connect students and alumni.

Zuckerberg later left that project, and showed up with Facebook. The brothers claim Zuckerberg stole their code, and sued him three years ago. The brothers later changed their company’s name to ConnectU.

They’ve been fighting ever since, and all the while Zuckerberg and Facebook have maintained the suit isn’t going anywhere. This month, however, there’s a federal court hearing on the case. Portfolio has a good summary.

The lawsuit, filed by brothers Cameron and Tyler Winklevoss, and Divya Narendra, accuses Zuckerberg, Facebook’s 23-year-old C.E.O, of stealing the source code, design, and business plan for Facebook in 2003 when he briefly worked in the Harvard dorms as a programmer for their own fledgling social-networking site, now known as ConnectU.

The plaintiffs have demanded that Facebook be shut down and that full control of the site – and its profits – be turned over to them.

Here’s an early summary of the case, after it was filed three years ago.

What’s surprising is that this case hasn’t gone away. The stakes have only increased, now that Facebook is widely considered worth more than $1 billion, and as much as $8 billion depending on who you listen to.

Three years later, we’re still no closer to knowing whether he stole code or not. What code did write for them, and was he paid for? How much were these agreements in writing, how much of it was simply oral agreements?

The most likely worst case for Facebook: Zuckerberg and his investors will agree to settle this for many millions of dollars.