Snapchat and founders’ friend settle lawsuit over ownership

Snapchat Inc., the Venice start-up that makes a mobile application for sending disappearing photo messages, settled a lawsuit by a former Stanford University student who helped create the program and claimed ownership in the company.

The terms of Frank Reginald “Reggie” Brown’s settlement with Snapchat, Chief Executive Evan Spiegel and Chief Technology Officer Robert Murphy are confidential, Brown’s lawyer and the company said in a joint statement.

Brown came up with the idea of creating an application for sending disappearing picture messages when he was at Stanford, according to the statement. He collaborated with Spiegel and Murphy to develop the application during its early days.

The settlement comes as the value of a stake in Snapchat is rising. The company has been raising money that values it at $10 billion, more than three times what Facebook Inc. Chief Executive Mark Zuckerberg offered to pay to acquire the start-up last year.

Snapchat makes the third-most-popular app among millennials, after Facebook and its Instagram photo app. The app is used by 33% of 18- to 34-year-olds in the U.S., according to ComScore Inc.

“We acknowledge Reggie’s contribution to the creation of Snapchat and appreciate his work in getting the application off the ground,” Spiegel said in the statement.

A joint agreement to dismiss the lawsuit was filed in state court in Los Angeles on Tuesday, said Keith Hummel, Brown’s attorney.

Snapchat, born in 2011 in Spiegel’s fraternity house, has raised funding from investors including Institutional Venture Partners, General Catalyst, Benchmark, Lightspeed Venture Partners and SV Angel.