Facebook 2012 Annual Report Download - page 41

Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
As of December 31, 2012, we leased office and data center facilities around the world totaling
approximately 2.2 million square feet, including one million square feet for our corporate headquarters in Menlo
Park, California. We have data centers in the United States, including data center facilities that we own in North
Carolina and Oregon and leased data center facilities in California and Virginia. We believe that our facilities are
adequate for our current needs. To support our continuing growth, we are currently constructing a new data
center in Luleå, Sweden.
Item 3. Legal Proceedings
Paul D. Ceglia filed suit against us and Mark Zuckerberg on or about June 30, 2010, in the Supreme Court
of the State of New York for the County of Allegheny, claiming substantial ownership of our company based on
a purported contract between Mr. Ceglia and Mr. Zuckerberg allegedly entered into in April 2003. We removed
the case to the U.S. District Court for the Western District of New York, where the case is now pending. In his
first amended complaint, filed on April 11, 2011, Mr. Ceglia revised his claims to include an alleged partnership
with Mr. Zuckerberg, he revised his claims for relief to seek a substantial share of Mr. Zuckerberg’s ownership in
us, and he included quotations from supposed emails that he claims to have exchanged with Mr. Zuckerberg in
2003 and 2004. On June 2, 2011, we filed a motion for expedited discovery based on evidence we submitted to
the court showing that the alleged contract and emails upon which Mr. Ceglia bases his complaint are fraudulent.
On July 1, 2011, the court granted our motion and ordered Mr. Ceglia to produce, among other things, all hard
copy and electronic versions of the purported contract and emails. On January 10, 2012, the court granted our
request for sanctions against Mr. Ceglia for his delay in compliance with that order. On March 26, 2012, we filed
a motion to dismiss Mr. Ceglia’s complaint and a motion for judgment on the pleadings. We continue to believe
that Mr. Ceglia is attempting to perpetrate a fraud on the court and we intend to continue to defend the case
vigorously.
Beginning on May 22, 2012, multiple putative class actions, derivative actions, and individual actions were
filed in state and federal courts in the United States and in other jurisdictions against us, our directors, and/or
certain of our officers alleging violation of securities laws or breach of fiduciary duties in connection with our
IPO and seeking unspecified damages. We believe these lawsuits are without merit, and we intend to continue to
vigorously defend them. On October 4, 2012, on our motion, the vast majority of the cases in the United States,
along with multiple cases filed against The NASDAQ OMX Group, Inc. and The Nasdaq Stock Market LLC
(collectively referred to herein as NASDAQ) alleging technical and other trading-related errors by NASDAQ in
connection with our IPO, were ordered centralized for coordinated or consolidated pre-trial proceedings in the
United States District Court for the Southern District of New York. In addition, the events surrounding our IPO
have become the subject of various government inquiries, and we are cooperating with those inquiries. Any such
inquiries could subject us to substantial costs, divert resources and the attention of management from our
business, and adversely affect our business.
We are also party to various legal proceedings and claims which arise in the ordinary course of business.
Among these pending legal matters, two cases are currently scheduled for trial in the near future: Summit 6 LLC
v. Research in Motion Corporation et al., Case No. 3:11cv00367, is scheduled to begin trial as early as
February 19, 2013, in the U.S. District Court for the Northern District of Texas, and Timelines, Inc. v. Facebook,
Inc., Case No. 1:2011cv06867, is scheduled to begin trial on April 22, 2013, in the U.S. District Court for the
Northern District of Illinois. In the Summit 6 case, the plaintiffs allege that Facebook infringes certain patents
held by the plaintiffs. In the Timelines case, the plaintiffs allege that Facebook infringes a trademark held by the
plaintiffs. In both cases, the plaintiffs are seeking significant monetary damages and equitable relief.
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