Federal Courts Determine That Social Networking Accounts Can Contain Trade Secrets


As more businesses take advantage of social networking sites to build their brands and expand their marketing efforts, the question arises: can such promotional tools include protectable trade secrets? In at least some circumstances they can, according to two federal courts considering misappropriation cases involving MySpace and Twitter accounts.

In one March 2012 decision, a federal court in Colorado held that a list of friends on a MySpace account was protectable under the Colorado Uniform Trade Secrets Act. In the case, Christou v. Beatport, the plaintiff, a club owner, alleged that an employee misappropriated MySpace profiles containing thousands of "friends." The employee had access to the site in order to promote his employer's club, but when he started his own venture he allegedly continued to access the list of friends to compete with his employer. The court held that, using the same logic for protection of customer lists, a friends list could be entitled to protection if it meets the traditional tests under which customer lists can constitute trade secrets. The court noted that the list could not readily be compiled from public sources, and that the plaintiff had limited access to the employer's login and password information.

In a separate case filed in a California federal court, the court allowed a trade secret misappropriation case to proceed in November 2011 and denied a motion to dismiss. In this case, PhoneDog v. Kravitz, the plaintiff alleged that the defendant, a former employee, continued to use a work-related Twitter feed after leaving the company. The plaintiff—a mobile-device reviews and news site—used social media tools such as Twitter, Facebook, and YouTube to market and promote its services. When the defendant refused to relinquish the work-related Twitter account after leaving the company, the plaintiff sued and alleged trade secret misappropriation, arguing that the Twitter password, account information, and followers constituted protectable trade secrets. The court held that the allegations stated a claim, and the lawsuit currently is pending.

Please see full alert below for more information

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wilson Sonsini Goodrich & Rosati | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.