Entertainment & Intellectual Property Law

Protecting the Value of Your Company’s Social Media Accounts

You’ve spent countless hours building the social media brand of your company.  You’re on Twitter.  Facebook.  LinkedIn.  But what if one day the employee assigned to manage those accounts leaves?  And, takes all of that information and good will with him?

In 2011, PhoneDog (a mobile phone site) sued its former employee, Noah Kravitz, alleging that he had misappropriated company trade secrets, intentionally and negligently interfered with PhoneDog’s business relations and converted company property to his own use.  Why the bad blood?

During Kravitz’s stint as a PhoneDog employee he had compiled 17,000 Twitter follows on the account @PhoneDog_Noah.  When he left the company, he changed that account to @noahkravitz and instantly “flipped” those followers to the new account.

PhoneDog complained that it helped establish Kravitz’s ability to develop an identity on Twitter and other social media accounts and that those followers belonged to PhoneDog, not Kravitz.  Unfortunately, there was no written documentation in place setting out who “owned” the followers.

In the lawsuit, PhoneDog sought damages in the amount of $2.50 per month, per Twitter follower Kravitz took with him.  Yep, you read that right.  That’s $42,500 per month for these followers.

The Northern District of California rejected Kravitz’s early attempts to dismiss the lawsuit, but the parties later settled on undisclosed terms leaving us to wonder exactly how much the parties ultimately valued those Twitter followers.

In Christou v. Beatport, LLC, a case out of the District of Colorado, a DJ booking agent left the employ of plaintiff’s nightclub and opened a competing nightclub.  When he left he took with him the login information and friends list of the nightclub’s Myspace account.  He then began to use the Myspace page for his new competing business, Beatport, LLC.  His former boss filed suit alleging trade secret misappropriation among other claims.

The court rejected defendant’s motion to dismiss and allowed to go forward the claim that a Myspace page and the associated friend list can constitute protectable trade secrets.  The case went to trial in July 2013, but it does not appear that the trade secret claim was submitted to the jury.

These and other cases illustrate the vulnerabilities companies face when it comes to retaining their social media interests.  Here are some suggested best practices aimed at helping companies ensure that their social media accounts are protected:

  • Establish ownership in any social media account or “handle” with the company
  • Don’t allow employees to create a personalized handle using part of the company’s name (like in the PhoneDog case) as that can lead to confusion or require that such account be turned over to the company upon employee’s departure from the company
  • Assign more than one employee to maintain company profiles
  • Consider adding a clause to any employment agreement that requires former employees to unlink/defriend LinkedIn, Facebook, and other social network contacts connected with the company.

For more information or if you have any questions contact Stacey Davis at The Law Firm of Stacey A. Davis, LLC, 205.777.9906 or sdavis@staceydavislaw.com.