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Is Your Twitter Account a Trade Secret?

Posted in Trade Secrets

As social media networks become part of the lives and daily routines of more and more people, the use of social media networks in the workplace has begun to highlight a number of issues where an employee’s use of a social media network may interfere with the rights of their employer. A recent case pending before the United States District Court for the Northern District of California presents a familiar problem from the realm of trade secrets, but casts it in a new social media oriented setting. The case is PhoneDog v. Noah Kravitz (N.D., Case No. C11-03474-MEJ).

Noah Kravitz worked for PhoneDog.com where he periodically would offer his opinions concerning new mobile phones as they were released for sale to the public. In order to drive traffic to the PhoneDog website, PhoneDog and Mr. Kravitz employed the use of a Twitter account. Using the Twitter handle of @PhoneDog_noah, Mr. Kravitz was able to attract approximately 17,000 followers, each of whom received real-time updates from Mr. Kravitz regarding his thoughts on various mobile phones, as well as some of his personal opinions on other topics. Upon his departure from PhoneDog.com in October 2010, Mr. Kravitz changed his Twitter handle to @noahkravitz, but continued to use the same Twitter account, effectively taking all 17,000 followers with him when he left. Obviously unhappy with this action, PhoneDog filed a lawsuit against Mr. Kravitz asserting (among other things) a claim for misappropriation of trade secrets. According to PhoneDog’s complaint, Mr. Kravitz’s Twitter account had been developed and maintained for the sole purpose of driving internet traffic to the PhoneDog website, for the sole benefit of PhoneDog. Therefore, according to PhoneDog, Mr. Kravitz’s Twitter account, as well as the password to that account, constitute proprietary, confidential information belonging to PhoneDog. PhoneDog alleged that each of Mr. Kravitz’s 17,000 Twitter followers was worth $2.50 for each month that Mr. Kravitz used the Twitter account after his departure from PhoneDog. Having conjured this $2.50 per user value, PhoneDog alleged that it had suffered $340,000 of damages as a result of Mr. Kravitz’s use of the disputed Twitter account for the eight months following his departure from PhoneDog.

Perhaps feeling hounded by PhoneDog’s lawsuit (and undoubtedly determined to demonstrate that his former employer was barking up the wrong tree), Mr. Kravitz filed a motion to dismiss PhoneDog’s complaint. Mr. Kravitz pointed out that “[t]he followers of the Account are not secret because they are and have been publicly available for all to see at all times.” Further, Mr. Kravitz contended that the password to his Twitter account could not constitute a trade secret as passwords to Twitter accounts “do not derive any actual or potential independent economic value under the [Uniform Trade Secrets Act] because they do not provide any substantial business advantage.” Ultimately, Magistrate Judge Maria-Elena James was not convinced. Noting that the standard on a motion to dismiss in federal court under Rule 12(b)(6) merely requires that a complaint contain enough facts to state a claim to relief that is plausible on its face, the judge determined that the facts alleged in PhoneDog’s complaint were adequate to state causes of action against Mr. Kravitz, and that the case therefore could not be dismissed on Mr. Kravitz’ motion to dismiss.

While this may be one of the first, if not the first, lawsuits asking a court to determine the rightful owner of Twitter followers, it is unlikely to be the last. Because Twitter gives individuals the ability to communicate with a potentially large audience and influence their decisions, it is likely that disputes over the ownership of Twitter followers will become as common as the more familiar cases involving “rolodexes” or customer contact lists which have been before the courts for years. Ultimately, because the PhoneDog ruling was not based on the substance of PhoneDog’s claims, the court has provided no significant guidance for use under similar circumstances. Since the ruling, however, Mr. Kravitz has added nearly 5,000 followers to his Twitter account, demonstrating that the publicity created by this case ultimately may generate more Twitter followers than his mobile phone reviews.