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Snapchat in bitter legal war against ousted founder Reggie Brown

BusinessNews
by Damon Poeter, 10 Dec 2013News
Snapchat in bitter legal war against ousted founder Reggie Brown

Snapchat has asked a federal court for a temporary gag order against ousted founder Reggie Brown, who claims he came up with the idea for the "disappearing messages" app while attending college with co-founders Evan Spiegel and Bobby Murphy.

Brown is currently suing Snapchat and its two co-founders for a third of the company, which reportedly has been tendered acquisition offers of as high as $4 billion (£2.4 billion). Brown claims he was squeezed out of any stake in Snapchat by Spiegel and Murphy when they allegedly went behind his back and created a company without giving him any equity in it.

The startup's lawyers filed the motion last week with the California's Central District Court, alleging that Brown had divulged to the media confidential information pertaining to the lawsuit protected under court order.

Specifically, the Snapchat motion cited deposition videos from the case published by Business Insider last month.

"On December 2, 2013, after repeated inquiries, plaintiff's counsel finally admitted that they had knowingly provided members of the media with deposition testimony that Snapchat had designated as 'Confidential' under the Protective Order entered in this case. ... Plaintiff and his counsel boldly claimed they had a right to make such disclosures — despite the contrary terms of the Protective Order — because they unilaterally (and wrongly) determined that Snapchat had waived its rights under the Protective Order," according to the motion, a copy of which was published this week by TechCrunch.

Snapchat's legal counsel argued that a temporary restraining order against Brown was necessary to prevent him from divulging more protected information from the case, which includes "substantial amounts of commercially sensitive and private information ... including among other things highly confidential financial and investment information related to Snapchat's business, sensitive information regarding Snapchat's business plans, and private, personal communications of individual third parties subject to rights of privacy under the California Constitution."

The leaking of that information could result in "great or irreparable injury to Snapchat," the startup's lawyers argued.

Spiegel, now the CEO of Snapchat, and Murphy have reportedly attempted to settle with Brown for a sizable sum but are apparently unwilling to give him the amount of equity he's requested.

Spiegel reportedly holds a 60 per cent stake in Snapchat and Murphy owns 40 per cent.

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