Snapchat has settled what could have been a nasty co-founder lawsuit filed by Frank Reginald "Reggie" Brown, a Stanford University student who claimed to have come up with the idea to create an app that deletes images and videos moments after it is sent.

Possibly hoping to be overshadowed by the announcement of Apple's iPhone 6, Snapchat released on Tuesday a statement saying it has settled - out of court - an ownership claim hounding Snapchat chief executive Evan Spiegel and chief technology officer Bobby Murphy. Brown, their old Sigma Kappa fraternity brother, said he owns the idea of disappearing photos and videos, an idea that was first used for an app called Picaboo, which later became Snapchat.

Brown's claim was supported by several documents showing his involvement in the original Snapchat, including a patent filing that includes his name on it. On the other hand, his former frat brothers argue that Brown was not directly involved in the actual development of the App. In leaked videos of an April deposition, Spiegel is seen as saying: "Reggie may deserve something for some of his contributions."

Snapchat declined to mention how much Brown received to drop his charges, but his lawyers said Brown was demanding a 33 percent share in the company's stocks, a figure which he later dropped to 20 percent. The company has recently received $20 million in funding invested by legendary venture capitalist Kleiner Perkins Caufield & Byers, giving Snapchat a valuation of $10 billion.

Given this valuation, Brown likely received a huge amount akin to what brothers Cameron and Tyler Winklevoss received from Facebook to settle the dispute about the social network's origins. The Winklevoss brothers were awarded Facebook stocks valued at $65 million, but that value soared as Facebook's valuation went up.

"We are pleased that we have been able to resolve this matter in a manner that is satisfactory to Mr. Brown and the Company," says Spiegel in a news release. "We acknowledge Reggie's contribution to the creation of Snapchat and appreciate his work in getting the application off the ground."

Brown filed the lawsuit in February 2013, months before Snapchat was taking over the headlines hailed as the next Facebook, with Spiegel doing a Mark Zuckerberg and being touted as "the boy who turned down a billion dollars."

In November last year, Snapchat rejected billion-dollar offers from Facebook and Google, who wanted to snap up the start-up for its disappearing messages technology. But with Snapchat now the third most popular app for users aged 18 to 34, only next to Facebook and Instagram, it appears Spiegel was on the right track when he turned down the acquisition offers.