Social media provides business the opportunity to stay in contact with customers, reach out to prospects, spread news, and keep tabs on competitors. Indeed, chances are many of you reading this post were alerted to it as a Henderson Franklin Twitter follower, Facebook friend or LinkedIn connection. The heart and soul of social media accounts (SMA) are their contacts. The more contacts a user has, the wider it can spread information. In any social media platform, a user’s profile page generally displays all of its friends, followers and connections. Building those contacts takes time and effort and represents valuable assets to the SMA owner. Many businesses have policies in place addressing SMA use by employees. But, when there are no policies in place, some interesting questions arise, namely: Who owns those contact lists and can a business claim proprietary trade secret rights in same? Only a few courts have looked at these questions and while the law is not settled, the decisions shed light on how these assets can be protected.

Trade Secret Baseline

Florida, like most other states, follows the Uniform Trade Secret Act (UTSA). Under this statute, a trade secret is “information, including a formula, pattern, compilation, program, device, method, technique, or process that:

(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

One of the archetype trade secrets is a business’ customer list. Who a company conducts business with is, in most cases, considered proprietary and protectable information. Do SMA contacts rise to this level?

Court Determinations

In Eagle v. Morgan, decided under Pennsylvania’s UTSA, the court looked at LinkedIn contacts. While employed by the defendant, the plaintiff created a LinkedIn account and amassed a significant following. After she was terminated, the company changed passwords and took over the account. The plaintiff ultimately regained access to the account, continued using it and refused to relinquish it to the defendant. Among the many claims and counterclaims in the litigation was the defendant’s claim that the list of LinkedIn followers constituted a protectable trade secret misappropriated by the plaintiff. Without much analysis, the court noted that LinkedIn is a publicly available database and listings of followers are readily ascertainable, not proprietary, and thus could not constitute trade secrets. Additionally, the court noted that the defendant could not claim ownership of the LinkedIn account where there was no corporate policy addressing the issue or indicating such business accounts were property of the company.

Phonedog v. Kravitz explored this issue further in the context of Twitter. There, while employed by Phonedog, Defendant Kravitz created a Twitter account for business use and built over 17,000 followers. Kravitz left Phonedog to work with a competitor but kept the Twitter account and followers. Phonedog sued claiming this was a theft of trade secrets. Interpreting the California UTSA, the court issued a ruling that intimated the Twitter followers could be the property of Phonedog because Phonedog encouraged Kravitz to use Twitter and build a following. While the Phonedog case settled before trial, this seems to indicate there are instances where SMA follower identities can be protected trade secrets.

Finally, Christou v. Beatport involved ownership and use of a MySpace profile and friends list. Here, the plaintiff, a nightclub owner, brought suit against an ex-employee contending theft of the plaintiff’s MySpace profile and friends list. The defendant argued these items were not protectable trade secrets because all of the information and identity of contacts was readily available. The court, applying Colorado’s UTSA, disagreed finding that while the simple identity of contacts might be readily ascertainable, the real value in that list is the access it provides to personal information, contact information and preferences of the contacts, knowable only by accessing their profiles. Because this information was not be easily found outside the friends list, the court viewed it as a potentially protectable trade secret.

Takeaways

The law is still unsettled as to who “owns” social media account information and the extent to which the information and contacts in those accounts is protectable. Because of the open and public nature of social media, a user’s contacts, followers and friends are usually easily ascertainable. However, it appears that in some instances traditional notions of trade secret law may apply to ownership and confidentiality of lists of SMA followers. The more closely a business guards its SMA information the more likely it might be considered a protectable trade secret. This could include taking steps such as maintaining privacy of follower lists. Likewise businesses who utilize SMAs and encourage their employees to do so should consider putting policies in place that clearly define ownership and confidentiality of business-related SMA information.

If you would like to discuss your own particular concerns regarding social media and how it impacts your business, please contact us.

 

Image courtesy of Gavin Llewellyn under Flickr Creative Common License