If a picture is worth a thousand words, and a disappearing picture is worth $800 million, what’s an idea worth?
Reggie Brown filed a motion on Thursday in a California court to disqualify Evan Spiegel, Bobby Murphy, and Snapchat’s attorneys, Quinn Emanuel. The documents also show evidence that may support Brown’s claim that he is a co-founder of Snapchat.
In February, Brown sued Spiegel, Murphy, and Snapchat, claiming he co-founded the popular photo messaging app, which just raised $80 million at an $800 million pre-money valuation, and was forced out by Spiegel and Murphy.
Spiegel called the lawsuit “utterly devoid of merit” in February. Brown’s filing on Thursday included some of the evidence that had been found by Brown’s lawyers during the discovery stage.
Keep in mind that during this stage Snapchat can say very little publicly; so while these documents are interesting, remember that this is one side of the case, and we aren’t seeing Snapchat’s supporting documents. For example, a source told me in March that there is a paper trail of Brown being willing to take a smaller share of the company. As I wrote then,
“A source says Brown, an English major, acknowledged that he “had a little less to contribute but was still working on what he could do” and that there were emails about Spiegel and Murphy taking equal cuts that were larger than Brown’s. Spiegel majored in product design and Murphy studied mathematical and computational science.”
Here’s what Brown’s lawyers divulged in court documents this past Thursday, and what each piece really means:
“• Contrary to public statements made before the litigation, Defendant Spiegel admits that Plaintiff came up with the idea for disappearing pictures messages;”
This corroborates what sources told me in March regarding the founding of the company, and obviously is a blow to Snapchat’s public image, as Spiegel and Murphy had previously denied Brown’s claims and said the idea was solely theirs.
“• After Plaintiff invited Defendant Spiegel to work on this project, they together tried to recruit a coder/programmer. After being turned down by other fellow fraternity brothers, Plaintiff and Defendant Spiegel settled on Defendant Murphy as the project’s coder;”
While it’s sort of interesting that Murphy wasn’t Spiegel and Brown’s first choice for their coder, sources say he has done a great job leading the technical aspects of the application and company. Bouncing ideas off friends and being rejected by busy classmates is also commonplace.
“• On June 9, 2011, in a text message to Plaintiff, Defendant Spiegel referred to his father’s house, where Plaintiff and Defendants Spiegel and Murphy were living and working on the Application as “startuphou5” (which means “startup house”);
• On June 28, 2011, Defendant Murphy sent a mass email to his friends asking them to try the beta test version of the Application that he, Spiegel and Plaintiff have been working on, and signed the email as “Bobby, Evan, Reggie;”
• On July 1, 2011, Defendant Spiegel’s father (an attorney) sent a text message to Plaintiff’s mother, and acknowledged that the three of them were equal collaborators on the startup: “thank you for your gracious note. It is delightful to have Reggie with us this summer as he, Evan and Bobby work on their startup. They are working hard, having fun and seem to be learning a lot […];”
“• On July 8, 2011, around the time the Application was launched on iTunes store, Defendant Murphy listed Plaintiff as the “CMO” (and Defendants Murphy and Spiegel as “CTO” and “CEO”, respectively) on Crunchbase, a database of tech companies;”
Nothing really new here — this is basic evidence showing that Brown worked with Spiegel and Murphy in the summer of 2011.
“• On July 17, 2011, the three of them took a picture together to celebrate the Application’s launch on iTunes store with a cake decorated with the start-up’s ghost logo (designed by Plaintiff). John Spiegel’s girlfriend emailed them the picture with the following note: “The launch of something great!!!;”
“• On July 21, 2011, Defendant Murphy tagged Plaintiff as an “employer” for Picaboo Facebook;”
The cake picture has circulated on all the blogs; nothing new here.
“• On July 23, 2011, several days after launching the Application, Defendant Spiegel texted Plaintiff to report on the increasing popularity of the Application and stated that “[t]his thing is a rocketship;”
• On July 27, 2011, Defendant Spiegel emailed a blogger about the Application, stating: “I just built an app with two friends of mine (certified bros our frat just got kicked off campus)”– referring to Plaintiff and Defendant Murphy;”
While Brown’s lawyers paint Spiegel as a mindless frat bro, the full email chain shows a much shrewder Spiegel managing the media and having a long-term vision for the product.
Sources told me Brown’s original idea for the app arose from a conversation about sexting; indeed, the blogger Nicole James immediately jumped to sexting when Spiegel pitched the idea to her.
“Ahh, okay. So it’s like, the best way to sext, basically. Cuz you can’t save the images?” James wrote.
“Some people use it for that..but it’s also the best way to quickly share an ephemeral moment with a friend - think celebs (blake lively?), cute guy on the street, where you are…it makes the images you send special the most exclusive photos in the world haha,” Spiegel replied.
“I like it,” she shot back.
“Blog target #1 acquired,” Spiegel wrote to Murphy and Brown.
A few months later, in September, James wrote about the app on her Tumblr blog:
“My internet friend Evan [Spiegel] created this app called Picaboo whereby you can send a photo to anyone else who has the app, but you set a time limit on the photo, and it’s only from one to ten seconds. There is NO WAY for the person to save the photo. Imagine all the n00dz you’d get cuz people would feel so safe about it!!!!
Evan emailed me one day asking me to check out his app…
For Evan’s sake, as he’s probs reading this, I should mention he is not my sexting partner — he sends me photos of like, the beach and tacos and other stuff people do in California, while I send him photos of Times Square and taxis and a woman handing out coupons dressed up as a busted-ass Mickey Mouse getting cited by a cop (for real). You know, New York shit. Now we are photo friends! It’s neat.”
Even though James still thought the app was for sexting and pitched it to her readers as a sexting app, she herself was using it in the same way as most current Snapchat users: as a personal photo sharing tool, just as Spiegel envisioned.
“• On August 11, 2011, Plaintiff filed a provisional patent application for the Application listing him and Defendants Spiegel and Murphy as “co-inventors;”
• On August 11, 2011, Defendant Spiegel told Plaintiff the following after Plaintiff (who was visiting his family in South Carolina) suggested that Defendants Spiegel and Murphy celebrate the filing of a patent application: “No chance were celebrating wo you bro;”
• On August 16, 2011, the three of them had a blow-up on the phone when Defendant Spiegel got offended over the order of the names listed as co-inventors in the patent application (his name was listed last). After the call, Defendant Spiegel sent a text message to Plaintiff to apologize and acknowledge that Plaintiff came up with the idea for the Application: “I want to make sure you feel like you are given credit for the idea of disappearing messages…”
This also corroborates what sources told me in March — that a patent argument caused Spiegel and Murphy to shut Brown out of the company. However, the patent was not the one for single touch photo/press and hold video, which Spiegel and Murphy filed in August 2012.
The patent discussed here was much broader, essentially for an app for disappearing photos. A letter from Cooley LLP, representing Snapchat, to Brown in May 2012 alleges that Brown’s ownership claims were tied to this patent.
The letter explains that the patent was unlikely to be approved and that Snapchat was “confident that the subject matter of the application falls under ‘prior art.'” The letter cites a patent held by TigerText that covers the handling of impermanent message content, and argues that Brown’s contribution was the “unremarkable observation that impermanent transmitted messages would be desirable.”
In the Cooley letter, the firm argues that “unless and until a patent issues…your claim is to 1/3 of nothing.” The patent has not yet been approved, and has likely been removed by Spiegel, Murphy, or Brown. A representative from the United States Patent Office previously told me an “inventor can ask for an application not to be published at all until the patent is actually issued.” The patent is eventually abandoned if it is never issued, and if an application has multiple inventors, any of them can file a non-publication request.
“Of course, the Company has developed proprietary technical solutions for the handling of impermanent message content, but you had no role in developing such proprietary technical solutions,” the Cooley letter continues. “Accordingly, the Company is confident that you are not the owner of any Company intellectual property.”
Meanwhile, Brown’s lawyers are pushing for Brown to receive a full third of the company — not an equal share to Spiegel and Murphy.
“Our position is that it would not and should not be diluted because each subsequent investor knew or should have known about Reggie’s interest in the company,” James Lee tells me. “If we were to take this all the way to trial our position would be Reggie is entitled to the full 1/3…we would not be asking the jury for parity with what Evan and Bobby have today as a result of their improperly ousting Reggie.”
The two sides will meet in court on August 1 to address the motion to disqualify Snapchat’s lawyers.
Disclosure: I am currently a rising senior at Stanford and the president of the Stanford chapter of Kappa Sigma. Brown, Spiegel, and Murphy were all members of Kappa Sigma at some point during their time at Stanford. By the time I joined the fraternity, in the spring of 2011 (my freshman year), Murphy had graduated from Stanford, and Spiegel and Brown had left the fraternity.
I have never met Brown. I’ve met Murphy once. I have gotten to know Spiegel since the spring of 2012, mostly through interviews for TechCrunch. This in no way affects my objectivity or ability to report on this lawsuit or the company.