On Wednesday, Meta-owned Instagram officially launched “Threads,” an application for sharing text updates and joining public conversations aimed to rival Elon Musk’s, Twitter. Threads quickly became one of the fastest-downloaded apps, amassing thirty-million users within hours of its initial launch. ChatGPT was downloaded one-million times within its first five days. Shortly after Threads’ launch, counsel for Twitter sent a letter to the CEO of Meta, Mark Zuckerburg, referring to Threads as a “copycat” app and expressing concerns that Meta engaged in “systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property in violation of state and federal law.” While Twitter threatened legal action, no suit has been filed.
Before the enactment of the Defend Trade Secrets Act in 2016, companies seeking relief for trade-secret misappropriation were forced to file suit in state court. This presented potential challenges for victims of trade-secret theft because the definition of “trade-secret,” in many cases, differs from state to state.
Today, while victims of trade-secret theft may still file suit in state court, an owner of a misappropriated trade-secret may also bring a civil action in federal court so long as the trade-secret is related to a product or service used in interstate commerce. Twitter would not have an issue showing its platform is used in interstate commerce.
The company’s largest hurdle in a federal trade-secret action against Meta would be proving that Meta actually misappropriated trade secrets. The Defend Trade Secret Act defines a “trade secret” as all forms and types of financial, business, scientific, technical, economic, or engineering information, whether tangible or intangible, and whether stored physically, electronically, graphically, photographically, or in writing if: (1) the owner of the trade secret has taken reasonable measures to keep such information secret; and (2) the information derives independent economic value from not being generally known or ascertainable. Twitter undoubtedly possesses a myriad of trade secrets; however, whether the secrets were misappropriated is a separate question. Generally, trade-secret misappropriation occurs when someone acquires a trade- secret of another and has reason to know that the trade secret was acquired by improper means, or someone discloses a trade secret of another without express or implied consent.
In its letter to Mr. Zuckerburg, Twitter stated that “Twitter knows [Threads] employees previously worked at Twitter; that these employees had and continue to have access to Twitter’s trade secrets and other highly confidential information; and that many of the employees have improperly retained Twitter documents and electronic devices.” However, Meta’s Communications Director posted on Threads, “To be clear: No one on the Threads engineering team is a former Twitter employee — that’s just not a thing.” If Twitter can show that the Threads team includes ex-Twitter employees who used Twitter trade-secrets to develop the app, Meta will likely be exposed to liability. But if Meta developed Threads independently of any ex-Twitter employees or Twitter confidential information, any federal trade secret action brought by Twitter might run up against a wall. For now, there is still much to be uncovered, but it looks like this dispute between Meta and Twitter will be fought in the courtroom, not the octagon.