News of $65 million Facebook settlement with ConnectU leaked

A law firm is claiming Palo Alto-based social networking site Facebook Inc. paid $65 million to settle a suit accusing Facebook founder Mark Zuckerberg of stealing the concept for his social network.

The law firm that represented ConnectU, a smaller social network, included the settlement amount Facebook purportedly paid ConnectU's founders in a newsletter.

The litigation was settled last summer with ConnectU standing to receive an award of cash and Facebook stock, but the actual value of the deal was supposed to be confidential. Zuckerberg was challenged by the Winklevoss twins, Cameron and Tyler, and their partner Divya Narendra, who claimed they had enlisted Zuckerberg to work on their ConnectU Harvard dating service. Zuckerberg and Facebook denied any wrongdoing and filed unfair business practices litigation against ConnectU.(See: US judge rules settlement between Facebook and ConnectU founders valid)

The settlement was supposed to be confidential. Attorney Peter Calamari of Quinn Emanuel Urquhart Oliver & Hedges told the Los Angeles Times the information was included by public relations employees and didn't get caught before it was released. He says the firm had a policy not to discuss the case.

The Recorder, a legal publication, broke the news. It also published the firm's marketing brochure, which lists recent court victories above the tagline: "It's Our Opponents Who Needed a Bailout." Facebook was valued at $15 billion after a 2007 investment by Microsoft Corp. Its valuation has dropped since, which makes the settlement less lucrative for ConnectU. (See: Microsoft looks at Facebook after losing Yahoo!)

Peter Calamari, a lawyer representing ConnectU, said the release was inadvertent. "Our PR people released something, and it didn't get caught by the people who knew," he said. "We had a policy against commenting or talking publicly about this case."