PhoneDog v. Kravitz, No. 11-03474 (N.D. Cal. November 8, 2011), was a case in the United States District Court for the Northern District of California about whether Twitter accounts and their passwords could be company property or trade secrets. In this case a mobile device news website PhoneDog sued Noah Kravitz, its former employee, after Kravitz refused to turn over password information for the Twitter account he developed and cultivated during his employment. When Kravitz asked the court to dismiss this case, the court held that Twitter accounts and their passwords (as described by PhoneDog) could constitute trade secrets and that failure on behalf of the employee to relinquish an account could constitute misuse of a trade secret or "trade secret misappropriation." This case is often cited in arguments for the importance of including clauses about social media account ownership in employment contracts.
Background
PhoneDog is a mobile device news and reviews website that employed Noah Kravitz as a product reviewer and video blogger. Working as a writer for PhoneDog, Noah Kravitz amassed 17,000 followers under the Twitter username @Phonedog_Noah. When he quit his job in October 2010 Kravitz kept his Twitter account and changed its handle to @noahkravitz. PhoneDog ran a farewell video post in which viewers are directed to follow Kravitz via the new @noahkravitz handle. In January 2011, Kravitz began working for a PhoneDog competitor, Technobuffalo, and used his Twitter account as part of his work.
Claims
Kravitz initially filed breach of contract and related claims against PhoneDog in a separate case, claiming his former employer had neglected to pay out his contract after he left. PhoneDog then brought suit with four claims against Kravitz: 1) Misappropriated Trade Secrets; 2) Intentional Interference with Prospective Economic Advantage; 3) Negligent Interference with Prospective Economic Advantage and 4) Conversion. Kravitz responded by asking the court to dismiss the case. Claims (2) and (3) were dismissed then later revised and accepted by the court.
District Court's opinion
Misappropriation of trade secrets
In 2011, PhoneDog sued Kravitz for trade secret misappropriation or misuse of a company trade secret. PhoneDog claimed that Kravitz's Twitter account, particularly the password to the account, was a trade secret, and that his continued use of the account to connect followers to a PhoneDog competitor was misappropriation.
The claim for misappropriation of trade secrets is governed by the California Uniform Trade Secrets Act (CUTSA). CUTSA defines a trade secret as "information, including a formula, pattern, compilation, program, device, method, technique, or process, that: 1) Derives independent economic value ... from not being generally known to the public ... and 2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." in accordance with these definitions, PhoneDog identified its trade secret as the passwords and other information associated with all @Phonedog_NAME Twitter accounts. The court did not dismiss PhoneDog's trade secret claims, holding that the Twitter account and its password could constitute a trade secret under California law.
CUTSA defines misappropriation as "[a]cquisition of a trade secret of another by a person who knows or has reason to know [it] was acquired by improper means" or unauthorized "[d]isclosure or use of a [another's] trade secret." The district court held that Kravitz's refusal to relinquish his access to his Twitter account could constitute misappropriation.
Interference with prospective economic advantage
In the initial filing PhoneDog failed to establish the relationships allegedly compromised by the defendant, as well as the duty owed to PhoneDog by Kravitz; as a result the court did not find merit in these claims and on November 8, 2011, they were dismissed from suit No. C 11-03474 MEJ and PhoneDog was offered an opportunity to revise their claims. On January 8, 2012, PhoneDog submitted a revised set of claims establish that the harmed relationships were: 1) 17,000 Twitter users as well as the merchants; and 2) Kravitz was operating as an agent of PhoneDog in operating the Twitter account and thus had a duty that was not met and thus resulted in negligent interference. The court accepted these revised claims.