United States: Whose Social Network Account: A Trade Secret Approach To Allocating Rights


Imagine that you work for a law firm, focusing on a discrete practice area, say music law. One of your many non-billable responsibilities is to contribute to an industry newsletter. However, the law is changing so rapidly in your area that your articles are typically out of date the moment they are published. One day, you decide that your time would be better spent opening a Twitter account and simply tweeting the latest developments. In the casual spirit of Twitter, you write tweets that not only inform, but also entertain your clients and yourself. You make wry comments about judicial opinions and the antics of the outsized personalities in the industry. You write a little about your personal life, in part because you use the same account to keep in touch with friends and family. Within a few months, several thousand people in your industry have become followers of your Twitter stream. You and your law firm are delighted. The firm even adds a link to your account on the firm web page.

A few years later, you leave your employer to go to a different firm. To your surprise, a week after you leave, your old firm demands that you return "their" Twitter account. What to do? Who "owns" the account?

This is, of course, not a problem unique to law firms. In many industries, workers maintain popular social network accounts followed by thousands, even millions, of people. How do we figure out when the account belongs to the employer and when it belongs to the worker? Who gets the account when the parties part ways? This question has recently arisen in a spate of cases. In PhoneDog v. Kravitz, a company that provides cell phone reviews sued a reviewer for taking his Twitter account with him after he left the job.1 In Eagle v. Morgan, a former employee sued a financial service company for changing the password on her LinkedIn account and transferring it to another employee the day she was fired.2 In Christou v. Beatport, LLC, a night-club owner sued a former employee for using the password to the plaintiffs MySpace pages to advertise his new club.3

The cases have aroused intense interest.4 Approximately one billion people participate in online social networking5. In addition, more than 70 percent of companies maintain a social network presence, and the number is rapidly increasing.6 Cumulatively, employers and individuals have enormous investments in social network platforms at stake. The precedents set will affect not only these investments but also the public interest in preserving the immense benefits of social network use.

These disputes are likely the harbingers of many more to come for two principal reasons. First, social network accounts can be quite valuable. A social network account may provide the means to transmit a message to thousands of people. In the PhoneDog case, for example, 17,000 people followed the Twitter account at issue.7 However, a social network account provides much more than a means to make a one-way broadcast. A popular account offers access to an engaged audience, a means to crowdsource ideas and feedback, a self-reinforcing community of people connected by their shared interests, and, finally, a way to reach into the network of each person linked to the account.

Take Lady Gaga's Facebook page, for example. The pop star has fifty million Facebook users linked to her account.8 She uses her Facebook page to promote her music, products, and charities by sending messages which appear automatically in the newsfeeds of her followers.9 Meanwhile, her followers can both respond to Lady Gaga and communicate with each other by posting on her page, giving Lady Gaga direct feedback and strengthening her community of fans, the so-called "little monsters."10 Moreover, each fan may pass on Lady Gaga's comments and other postings to their friends. As a result, Lady Gaga's messages are distributed to an even larger circle than the fifty million Facebook users linked to her account." Unsurprisingly, not only individuals, but a broad range of organizations, have created social network accounts to take advantage of these opportunities.

Second, the blurring of personal and professional roles on social network platforms leads to confusion over who has the superior rights to account. Because the account is in some ways a proxy for a person, people tend to use one account on a given platform to represent themselves for all purposes, including both personal and professional types of use. And because users participating in social network platforms expect interaction with people, organizations have found that using real people to "converse" on their behalf in a personal manner leads to success on social network platforms. Therefore, the features that make social network platforms effective as a means of communication lead to competing claims to an account.11

Individuals tend to blur personal and professional use at the same time that employers ask their workersl2 to represent them in a personal manner. Where there is no express agreement on the issue, the question of who has superior rights to the account becomes blurry indeed.

This is a new area with no clear legal framework. The problem of legal framing is this: a social network account can be shorn of all content that gives rise to clear legal rights. The name of the account may be changed to avoid a trademark claim. Copyrighted and private content can be deleted. The account may be reduced to a node to which other people have linked their accounts. No clear legal rights inhere in the links to the account, yet, by providing automatic access to an audience, the links are what give the account value.

This Article argues that trade secret law provides the best legal framework for resolving these disputes. The secret of access to the social network account-the password-should be protectable as a trade secret.13 A password's secrecy confers independent economic value by giving the account holder exclusive access to the links in the account.14 This trade secret protection, however, would be highly limited. It would protect only access to the account, but not any content otherwise available to the public. Crucially, any other user could still contact the account's followers through other accounts. Although narrow, trade secret protection would protect the interest at the heart of these disputes: the right to retain exclusive access to the account's followers.

Similar trade secret claims have survived motions to dismiss in two cases on the issue.15 This Article expands on the cursory reasoning in these cases and argues that protecting the account's password as a trade secret best balances the interests at stake in these disputes. The investment of time and effort to build up links to a social network account appears to yield significant social benefits in the form of improved dissemination of information, economic efficiency, and labor mobility. The bluffing of professional and personal roles while building up the links to accounts only appears to add to these benefits.

Trade secret law preserves incentives to invest in the account while protecting access to the account from misappropriation. Further, the hired-toinvent doctrine would allocate rights in social network accounts between employers and workers at the moment of creation in a manner that not only maximizes incentives to invest in social networking, but also preserves workers' incentives to invest in themselves.16 As a result, the trade secret approach promotes the public interest in online social network use without unduly hampering workers' rights. Moreover, this approach would, except in a few rare cases, work in concert with the resolution of other legal interests implicated in these disputes, such as privacy, copyright, and trademark concerns.

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1. PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 WL 5415612 (N.D. Cal. Nov. 8, 2011).

2. Eagle v. Morgan, No. I1-4303, 2011 WL 6739448 (E.D. Pa. Dec. 22, 2011).

3. Christou v. Beatport, LLC, 849 F. Supp. 2d 1055 (D. Colo. 2012); see also Maremont v. Susan Fredman Design Grp., Ltd., No. 10 C 7811, 2011 WL 6101949 (N.D. Ill. Dec. 7, 2011) (involving an employee suing an employer for accessing and posting messages through her personal Twitter and Facebook accounts); Ardis Health, LLC v. Nankivell, I I CIV. 5013, 2011 WL 4965172 (S.D.N.Y. Oct. 19, 2011) (involving a plaintiff who claimed that a former employee took social network accounts she had maintained as an employee when she left plaintiffs employment); Complaint, TEKsystems, Inc. v. Hammemick, No. 10-cv- 00819 (D. Minn. Mar. 16, 2010), available at http://op.bna.com/pen.nsf/id/jmer-86fq5g/$File/ linkedin-hammernick.pdf (alleging that a former employee contacted former clients through her Linkedin account in violation of her noncompete agreement).

4. See, e.g., John Biggs, A Dispute Over Who Owns a Twitter Account Goes to Court, N.Y. Timos, Dec. 26, 2011, at Bl; Elise Bloom & John Barry, The Role of Social Media in Workplace Disputes, CORP. COUNS., Mar. 20, 2012, at 22; Melissa Maleske, Companies Sue Employees Over Linkedn, Twitter Accounts, INs]oiDCouNsmEL, Mar. 2012, at 19; Joe Palazzolo, Before Dispute over Twitter Account, a Fight over LinkedIn, WAL Sr. J. BiLoG (Jan. 10, 2012, 12:12 PM), http://blogs.wsj.com/law/2012/01/10.

5. See infra note 19.

6. The Overlooked Side of Social Media, BusINESs WEEK (Sept. 11, 2009), http:// www.businessweek.com/stories/2009-09-ll/the-overlooked-side-of-social-mediabusiness week-business-news-stock-market-and-financial-advice; Doug Gross, Employers, Workers Navigate Pitfalls of Social Media, CNN (Feb. 7, 2012), http://www.cnn.com/2012/02/07/tech/ social-medialcompanies-social-medialindex.html ("In 2012, it is nearly impossible to imagine any company engaging with the public without using Facebook, Twitter, LinkedIn or other social networks.").

7. PhoneDog v. Kravitz, No. C 11-03474 ME1, 2011 WL 5415612, at *1 (N.D. Cal. Nov. 8, 2011).

8. Courteney Palis, Facebook's 15 Most Popular People: Celebrity Pages with the Most Likes, TM HUFFINGTON Posr (Mar. 14, 2012), http://www.huffingtonpost.com/2012/03/ 14/facebook-popular-people-pages-likesn1341726.html?view=print&comm ref=false.

9. Lady Gaga, FACEBOOK, https://www.facebook.com/ladygaga (last visited Feb. 9, 2013).

10. Id.

11. Id.

12. This Article uses the term "worker," because the worker could be either an employee or an independent contractor.

13. As required for trade secret protection, the password to the account is generally secret. See UNwP. TRAD SEcRETs ACr § 1(4), 14 U.L.A. 433 (1985); infra Part Ill.A.

14. This is true to the extent that the people linked to the account are potential customers. See UNIP. TRADE SecMv1rs Acr § 1(4), 14 U.L.A. 433 (1985); infra Part II.A.

15. Christou v. Beatport, LLC, 849 F. Supp. 2d 1055, 1076 (D. Colo. 2012); PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 WL 5415612, at *7 (N.D. Cal. Nov. 8, 2011).

16. In trade secret law, the default rule is that, at the moment of creation, ownership of the trade secret vests in the party that created the trade secret. See Ingersoll-Rand Co. v. Ciavatta, 542 A.2d 879, 885 (N.J. 1988); RESTATEMENT (THIRD) OF UNFAIR COMPFTIfON § 42 cmt. e (1995). Under the hired-to-invent doctrine, however, ownership in the trade secret vests in the employer at the moment of creation if the employer and worker had an implied-in-fact agreement that the worker would develop the trade secret for the employer. Teets v. Chromalloy Gas Turbine Corp., 83 F.3d 403, 407 (Fed. Cir. 1996); RESTATEMENT (THIRD) OF UNFAIR COMPIrIION § 42 cmt. e (1995). These rules are discussed in more detail in Part 11.

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Originally published in Michigan Telecommunications and Technology Law Review, Spring 2013.

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.

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