Man Claims One-Third Interest in Snapchat

LOS ANGELES (CN) - A man claims in court that his college buddies stole his idea for the Snapchat app, touted by Business Insider as "2013's most likely billion-dollar startup."

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Frank Reginald Brown IV sued Snapchat, Toyopa Group, Evan Thomas Spiegel, and Robert Cornelius Murphy, in Superior Court.

Brown claims he conceived of Snapchat in 2011 while he was an English major at Stanford.

The app allows users to send photos that delete automatically after a set period. Brown claims he shared the idea with Spiegel, who "acknowledged the commercial viability of Brown's idea, repeatedly exclaiming that Brown had indeed conceived of a 'million-dollar idea.'"

Brown claims that he and Spiegel enlisted fellow Stanford student Robert Murphy to develop code for the app.

Brown claims the three of them entered into an oral agreement on their joint venture - first known as Picaboo and then Snapchat.

"That explicit agreement was that their interests in the venture would be equally distributed, i.e., each of them would have one-third ownership and profit interests in the joint venture/partnership," the complaint states. "Brown and the individual defendants agreed also that Brown would serve as chief marketing officer, Spiegel would serve as chief executive officer and Murphy would serve as chief technology officer. Also, at this time Brown and the individual defendants agreed that each would have equal say in the control and management of the joint venture/partnership."

Brown claims that he came up with the original name for the app, Picaboo, and designed the logo, a cartoon figure of a ghost smiling and sticking its tongue out on the right side, which is Snapchat's logo. He says he also created Twitter and Facebook pages for Picaboo.

Brown says the three men spent the summer of 2011 living in the home of Spiegel's father, developing the app. While Murphy wrote code, Brown says, he wrote the terms of service, privacy policy, FAQs and marketing materials. He also claims to have come up with the partnership name - Toyopa Group -and managed the partnership's tax returns.

"Plaintiff Brown also contributed to the layout and design of the application's features, including the camera button, screen layout and the colors," the complaint states. "In July of 2011, plaintiff Brown and individual defendants publicly launched the application - by making it available for download by the public via the iTunes Store - under Brown's name for it, 'Picaboo.' At this time, Brown also undertook substantial efforts to market the application, in accordance with his role as chief marketing officer in the joint venture/partnership. Brown used popular social media websites to market the application, interfacing with his numerous contacts to promote use of the application. Brown's marketing efforts were successful, and were in large part responsible for creating the original groundswell of interest in the application that continues today."

Brown says he completed Picaboo's patent application in early August 2011, then went to his family home in South Carolina for a visit.

Weeks later, while planning to return to Los Angeles, Brown says, he and his partners had "a contentious telephone conversation regarding their startup" which ended with Spiegel hanging up on Brown.

"In the next few days, the individual defendants wrongfully and physically shut Brown out of the joint venture/partnership by, for example, changing the passwords for its computer servers and accounts to prevent Brown from doing any further work on the application for the joint venture/partnership. The individual defendants then cut off all communication with Brown and refused to respond to his requests to discuss the matter with them. The individual defendants subsequently changed the name of the application from 'Picaboo' to 'Snapchat,'" Brown says in the complaint.

Brown says he tried to contact Spiegel in 2012 to resolve the matter without litigation. He claims that Spiegel and Murphy responded by hiring lawyers to send him a threatening letter.

"Due in large part to plaintiff's contributions, Snapchat is now a wildly popular application. The Business Insider publication recently called Snapchat 'a threat to Facebook, and it is 2013's most likely billion dollar startup.' Other press articles reported that Snapchat users are now sending over 50 million pictures per day, more than Instagram, a startup that was reportedly acquired by Facebook in 2012 for $1 billion. By this action, plaintiff seeks to have his rights and interests restored to what they would have been but for defendants' improper and actionable conduct," Brown says in his complaint.

Brown seeks an accounting disgorgement, restitution and damages for breaches of joint venture and partnership agreements, breach of fiduciary duty, conversion, and unjust enrichment.

He is represented by K. Luan Tran, with Lee Tran & Liang, of Los Angeles.

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