• Financial Times, Tuesday, July 17, 2007 11 AM

It's not often referred to amid all the hoopla, but Michael Zuckerberg and Facebook have been embroiled in a three-year court battle with a smaller rival that seeks an injunction that would shut the social network down. ConnectU claims that Zuckerberg created Facebook using code and other ideas stolen from the rival site, which was started by three of his Harvard classmates. (Zuckerberg later dropped out of the university to run Facebook full-time.) The social networking phenom, which has some 30 million users, will attempt to convince a U.S. judge to throw out ConnectU's claims later this week.

ConnectU, for its part, seeks an injunction to shut down Facebook, plus the transfer of many of its assets to Zuckerberg's former classmates. The legal battle is receiving renewed interest in the wake of a fresh valuation of Facebook as being worth $8 billion. The Tsuit "underscores the difficulty entrepreneurs can face while working on a new idea before it's been formalized as a startup company." Indeed, make sure you have your non-disclosure agreement in hand next time you share an idea.

Meanwhile, Santa Clara University law school professor Eric Goldman cited numerous examples of companies forced to cease operations because of similar intellectual-property claims, adding, "you generally have people emerging from the woodwork" when you launch a company that enjoys a great deal of success.

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