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Snapchat Founders Duking It Out Over Ownership Interests

By Gabriella Khorasanee, JD on August 16, 2013 | Last updated on March 21, 2019

You'd think frat boys across America would have learned from the mistakes of the Winklevoss twins, but in the latest "you stole my idea" claim, the founders of Snapchat are duking it out in court to see who maintains an ownership interest.

Frank "Reggie" Brown IV, Evan Spiegel and Bobby Murphy all attended Stanford University and were members of the Kappa Sigma fraternity. Brown and Spiegel brought Murphy on to help them build Snapchat, an app that would allow users to send messages and photos that would delete after a few seconds. Brown was cut out of the deal, and is now suing Spiegel and Murphy.

What went wrong, bro?

The Idea

Brown claims that he had the initial idea for the app, and directed the design of the logo, The Guardian reports. While Murphy and Spiegel argue that "ideas are worthless without execution," early communications about the app indicate that there were three founders.

Before Snapchat, Spiegel and Murphy had worked together, unsuccessfully, in a venture called FutureFreshmen. Rather than start a new company, Spiegel and Murphy merely changed the name of FutureFreshmen to Toyopa Group, with Brown not having any ownership interest. Brown claims he thought that a new company was founded and didn't know he was not listed as an owner.

The Patent

After learning of the alleged betrayal, Brown submitted a UPSTO patent application, as he was tasked to do, and listed himself, along with Murphy and Spiegel, as a co-creator, reports Business Insider.

The Stakes

Here's an interesting tidbit that might make the importance of all this clear: Business Insider reports that Snapchat has been downloaded onto 19 percent of iPhones, is valued at $800 million, is one of the fastest growing Internet services and is likely to be purchased for a hefty sum (à la Facebook).

With so much at stake, The Guardian reports that Brown is now suing for a 20 percent ownership interest in Toyopa Group.

There's conflicting evidence, but given the huge risks and costs, we'd be surprised if this went to trial. Taking a lesson from Mark Zuckerberg, Murphy and Spiegel may be better off settling. We bet Murphy and Spiegel wish they had sent some of the messages indicating Brown was a founder through Snapchat -- Poof! They'd be gone by now.

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