Is Social Networking Disclosing Your Trade Secret Customer Lists?

It was inevitable. First came social networks, then came the lawsuits: In the e-discovery context, in impeachment situations (Ledbetter v Wal-Mart Stores Inc.(06-cv-01958-WYD-MJW) (D Colo April 21, 2009); Mackelprang v. Fidelity Nat’l Title Agency of Nevada, Inc. (D. Nev. 2007); and Beye v. Horizon Blue Cross Blue Shield (D. N.J. 2006)), in the tort context (Wolfe v. Fayetteville, Arkansas School, 600 F.Supp.2d 1011 (W.D. Arkansas 2009)), as to how much privacy settings matter, on passwords and access, and this list represents merely the proverbial tip of the issues iceberg.

One issue still bobbing below the surface, as it appears there are no fully tried cases on the matter as of this writing, is disclosure of trade secrets, such as a client/customer list, through use of social media and social networking.

The Uniform Trade Secrets Act (“UTSA”) has served as a model for the enacted Trade Secret Acts of 46 states and the District of Columbia. Massachusetts, New Jersey, New York, and Texas have not enacted a UTSA-model act – although the legislatures of Massachusetts, New York and New Jersey each introduced UTSA-based legislation in 2010. Under the UTSA a "trade secret" is defined as:

“information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (emphasis added).

See also Trade Secrets: A State-by-State Survey, Third Ed., with 2010 Cumulative Supplement; 18 U.S.C. 1839 (defining trade secrets for purposes of the Economic Espionage Act of 1996, which makes theft or misappropriation of a trade secret to benefit a foreign power or related to a product that is placed in interstate or foreign commerce a federal crime).

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Source: infolawgroup.com
By: Richard L. Santalesa