Trade Secrets in the “Social” World

Many companies use social media to promote their business, but in doing so they may be putting their trade secrets at risk. In the last year, several lawsuits involving trade secret misuse through LinkedIn, Twitter and MySpace have been filed. More are likely to follow.

The most widely publicized of these cases, PhoneDog v. Kravitz, involved the alleged misappropriation of a Twitter account and its followers. PhoneDog sued its former employee, Noah Kravitz, for misappropriating its Twitter followers. The court found the trade secret allegations sufficient to survive a Rule 12 motion, but the case settled before the court weighed in as to whether Twitter followers could be protected as trade secrets. Interestingly, although the settlement was confidential, it appears that Kravitz retained those 17,000 followers and has since then added more.

Although social media encourage the kind of information sharing that could be at odds with the protection of trade secrets, using social media and maintaining trade secrets do not have to be incompatible. To avoid problems, implementing consistent policies that define the appropriate use of social media and protect confidential information is critical. Also, taking steps to assert corporate control over social media sites, rather than allowing individual employees to take firsthand responsibility, will ensure “friends” and “connections” are more easily protected as trade secrets. The author suggests several concrete steps to realize the benefits of social media without jeopardizing valuable trade secrets.