Cases from Maria-Elena James

United States District Court for the Northern District of California
Tech company’s suit against former employee for misappropriation of trade secrets related to Twitter account survives motion to dismiss

PhoneDog is a company that delivers news about mobile phones, and provides information about them for consumers to use when comparison shopping. The company had employed Noah Kravitz to write online reviews of phone products using a variety of online mediums; one such medium was Twitter, where Kravtiz’s handle was “@PhoneDog_Noah.” However, after Kravitz left the company, he refused relinquish use of the Twitter account, and instead changed the handle to “@noahkravitz,” and installed a new password. Whether an exiting employee can take his Twitter followers with him, and the potential trade secret implications involved, is a case of first impression.

PhoneDog sued Kravitz in the United States District Court for the Northern District of California on July 15, 2011. The suit claimed misappropriation of trade secrets, interference with economic advantage, and conversion. On November 8, 2011, the court denied Kravitz’s motion to dismiss the trade secrets and conversion claims, noting that PhoneDog had described the elements of trade secrecy in sufficient detail. The case received publicity for potentially determining “ownership” of an employees Twitter account and followers. However, the alleged trade secrets at issue is actually the Twitter account password itself. Although PhoneDog’s conversion claim explicitly asserted ownership of the Twitter account, courts have interpreted the California Uniform Trade Secrets Act to preempt common law claims (such as conversion) if they are based on the same nucleus of facts as a concurrent trade secret misappropriation claim. Thus, the court can decide the case without analyzing the parties’ competing ownership claims. Moreover, even if the court finds in favor of PhoneDog, the specific remedy and calculation of damages could influence whether it would be cost-effective for parties to bring these types of claims moving forward.

The case exemplifies the complex challenges companies face when trying to protect their confidential information in the digital era, and more specifically, the dangers of not instituting explicit internal policies for employees and their social media accounts.

On or around December 19, 2012, the parties settled. Although the actual details of the settlement were confidential, it appears Kravitz has been permitted to retain ownership of the Twitter account.