On Facebook and Intellectual Property Theft

As the non-film press reviews The Social Network, their gloss on the film is driven, not surprisingly, by their philosophy of business. For example, in The New Republic, Lawrence Lessig focuses on how net neutrality enabled Facebook to thrive, because he is a fiend for net neutrality. [Sidebar: his argument makes no sense (typical of Lessig), because Facebook is a low bandwidth application, and net neutrality issues are all about bandwidth intensive applications.] The Wall Street Journal aims more at the lawsuits against Facebook founder Mark Zuckerberg, because it hates anti-business lawsuits (tort reform is one of the Journal’s pet causes; of course, lawsuits by businesses against regulatory agencies are fine) and loves the free market, and nothing is more free market than a successful entrepreneur. TechCrunch also criticizes the lawsuits, not so much from a tort reform perspective but from the Silicon Valley perspective of the heroic entrepreneur who works harder and succeeds; the money quote from this review is when it criticizes the Winklevoss twins because they “spend the majority of the movie demanding compensation over a site that they didn’t build.”

Both the Journal and TechCrunch minimize the lawsuit aspect and emphasis Zuckerberg’s execution of the idea. And to be sure, he executed brilliantly. There were already social networks out there – Friendster and MySpace – and yet it’s Facebook that’s the big winner. Facebook had superior technology, design and social elements, all of which helped it succeed. But to dismiss the Winklevoss claim as a mere “contract dispute” as the Journal does is to slant the story to make a political point. If the claim is true (obviously, I don’t know the facts, but Facebook did pay the twins over $60 million to settle the claim), Zuckerberg signed a contract to build a site for the twins, but instead of working on that site, he stalled the twins while he built a competing site. That is much closer to theft than to a contract dispute. Again, Zuckerberg won on execution, not on theft, but let’s not let that execution disguise or obviate any devious behavior that led to Facebook’s creation.

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