Social media accounts have evolved into a forum for companies to use to recruit and interact with clients and prospective customers. As a result, the ownership rights over social network tools such as Twitterand Facebook accounts have triggered previously unrealized legal significance. Specifically, who bears a property interest in a social media account that was used by an employee of a Limited Liability Company (LLC) for that corporate entity’s business purpose, when that employee departs from the company?
The U.S. District Court of Northern California faces this issue in PhoneDog v. Kravitz, a case where Phonedog Media LLC (“Phonedog”), a mobile phone retailer, sued Mr. Noah Kravitz, a former employee of Phonedog, over ownership rights of a Twitter account after he left the company. Central to Phonedog’s allegations stand two issues: i.) Who bears a property interest in a social media account that was managed by an employee of an LLC, but was used for business purposes? ii) Do social media account assets such as Twitter followers constitute a trade secret?
II. Ownership Rights Over Social Media Accounts
The underlying purpose for which the social media account was created is the determinative factor for resolving the ownership question. Accordingly, since the Twitter account was opened for the purpose of furthering the business objectives of Phonedog LLC, Phonedog is the bona fide owner of the account.
Ultimately, Mr. Kravitz responds to the “purpose” argument by stating that he used the Twitter account for both business as well as personal uses. As logic dictates, however, subsequent use of a tool (here, a social media account) cannot alter the purpose for which that tool was originally created. To do so would mean conflating “purpose” with “use.”
III. Trade Secrets
Phonedog also alleges that Twitter followers are trade secrets, which Mr. Kravitz misappropriated by continuing to use the account following his departure from the company. In order for information to constitute a trade secret, it must derive independent economic value by virtue of not being known by the general public.
Similar to client lists, Twitter followers can bear value in the sense that they give rise to business opportunities. However, unlike client contacts which are tucked safely away in rolodexes, Twitter followers are available for Twitter users to casually view. In other words, Mr. Kravtiz’s Twitter followers are made known to the general public, and thus cannot be trade secrets.
For the reasons stated, Phonedog stands likely to be awarded ownership rights over the Twitter account since it was created for the purpose of advancing the company’s interests. Nevertheless, the followers on that Account do not constitute trade secrets because they are made knowable to the general public. Most importantly, for the corporate onlookers hoping to avoid such legal disputes, companies should establish corporate policies that clearly state that any social media accounts used at the workplace on behalf of the company are property of the business, not its user.