Late yesterday UK time, it was reported that a lawyer for Twitter had sent a letter to Meta CEO Mark Zuckerberg complaining about Meta's new Threads app. Twitter claimed that it "has serious concerns that Meta Platforms (Meta) has engaged in systematic, wilful and unlawful misappropriation of Twitter's trade secrets and other intellectual property".
This is not the first time that claims of misuse of trade secrets have been raised in the tech industry. Back in 2018 Google-owned self-driving car company Waymo sued Uber claiming trade secrets theft, after a Waymo executive joined Uber's self-driving technology team.
Could such trade secrets claims be advanced in the UK?
Understanding Trade Secrets:
Trade secrets are confidential business information that give an enterprise a competitive advantage. In contrast to patents and trade marks, they do not require registration, and automatically enjoy protection under the law. In theory at least, as long as the trade secrets remain confidential, they are capable of protection in perpetuity.
The protection of trade secrets is considered essential for fostering innovation and encouraging businesses to invest in research and development and they are protected in the UK in two different ways.
European Trade Secrets Law:
At the European level, trade secrets are protected by the Trade Secrets Directive (EU) 2016/943. This legislation was implemented by all member states long before Brexit and in the case of the United Kingdom by the Trade Secrets (Enforcement, etc) Regulations 2018 (SI 2018/597). Therefore, this remains good UK law.
The Directive and Regulations define a trade secret as information that is secret, has commercial value, and is subject to reasonable steps to keep it confidential.
To establish an infringement under this legislation, Twitter would need to prove that Threads unlawfully acquired, used, or disclosed its trade secrets. However, it is important to note that the legislation does not provide absolute protection for trade secrets. It recognises that lawful acquisition, independent discovery, and reverse engineering do not constitute trade secret infringement.
UK Confidential Information Law:
In the United Kingdom, confidential information has also long been protected by common law principles, including the equitable duty of confidence. The courts recognize that parties owe a duty to maintain the confidentiality of information received in circumstances where it is reasonable to expect such confidentiality. This duty applies even in the absence of a formal confidentiality agreement, although frequently employees of a business will be asked to sign one. Similarly, when a company discloses confidential information to others (for example in discussions as to a possible collaboration) it is vital to get the recipient of that information to sign a "non-disclosure agreement" or "NDA".
To succeed in a claim for breach of confidence, Twitter would need to establish three key elements. Firstly, it must show that the information in question possesses the necessary quality of confidence. Secondly, it must demonstrate that the information was communicated in circumstances importing an obligation of confidence. Lastly, it needs to prove that unauthorised use or disclosure of the information has occurred, resulting in detriment.
Has Meta infringed?
As yet, we do not know enough of the underlying facts to form any view as to whether there has been trade secrets "infringement" in this case. We would need to know and analyse the nature of the information at issue and whether it was truly confidential, and understand how it was obtained, and whether reasonable steps were taken to maintain its confidentiality.
However, on Threads (obviously!), Meta spokesperson Andy Stone has already posted that "no one on the Threads engineering team is a former Twitter employee – that's just not a thing". So at the moment, it looks like a key Meta defence will be that Threads was independently developed without reference to any Twitter confidential information.
Conclusion:
Whatever its outcome, the Twitter and Threads clash underscores the potential importance of trade secrets for business and tech business in particular. Businesses should consider whether they need to put in place agreements with their employees and contractors covering the creation and use of trade secrets, and make sure where they disclose anything that may constitute confidential information outside of that business that a proper NDA has been put in place. And whether or not formal contracts exist, trade secrets claims may be a particularly useful weapon in a business' arsenal when it believes trade secrets have been taken and used by a competitor without permission.
Our London based solicitors have the expertise to deal with the legal issues that surround confidential information and trade secrets, with a particular focus on dealing with these issues in the tech sector. Our employment team, can assist with the wording of employment contracts and our commercial team regularly prepare NDA's for clients. Our intellectual property litigation specialists also have advanced and defended cases in the English courts involving confidential information and trade secrets claims.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
