April 25, 2012
MySpace Profile and Friends List May Be Trade Secrets (?)--Christou v. Beatport
By Eric Goldman
[I’ve mentioned before that sometimes blog posts get stuck. This is one of those posts. I initially drafted the post a month ago discussing only the court’s opinion, but the opinion is so opaque and confused that I wasn’t satisfied. I rewrote the post after reviewing the complaint, but I'm still not sure either the opinion or this post make much sense.]
Beatport is a leading online retailer of electronic dance music for DJs. Roulier is a principal of Beatport. Christou is a dance club entrepreneur in Denver. Roulier worked with Christou for a while, then Roulier split off and formed his own dance club in Denver. There are a variety of allegations of Roulier's bad dealings, but this opinion primarily focuses on Christou's antitrust allegations that Roulier leverages Beatport's market leadership in electronic dance music retailing to get top DJs to book at Roulier's dance club instead of Christou's dance clubs. Some more background on those allegations.
The antitrust discussion is pretty interesting, but I'm more interested in the trade secret claims over MySpace pages.
Now, I freely confess that I don't really understand how MySpace worked. I rarely went there, and when I did, I found it baffling. This opinion reflects that I'm not the only person baffled by MySpace's operations.
With respect to the MySpace profiles, the plaintiffs allege that they "secured the profiles through web profile login and passwords." This is a garbled allegation. I believe the plaintiffs are alleging that Roulier impermissibly logged into the MySpace profile management area after he left Christou’s employment; by doing so, presumably Roulier could see information that was only displayed to the accountholder, and Roulier could send messages to account followers. But because profiles are normally thought of as the public-facing side of a social media account, it’s confusing to talk about “securing profiles” through passwords, and the plaintiff’s unhelpful framing undermines the rest of the discussion.
Specifically with respect to the list of MySpace friends, two prima facie elements require the court to "look at whether the alleged misappropriator could have obtained the same information from a public directory or another source outside of the plaintiffs' business"--a key point of disagreement. The court says:
The names themselves, readily available to the public, are not the important factor. The ancillary information connected to those names cannot be obtained from public directories and is not readily ascertainable from outside sources, and thus this militates in favor of trade secret classification.
Well, if the public directory is the plaintiff's own MySpace page that anyone--including competitors--may freely browse and mine, doesn't that kind of end the trade secret analysis? See Sasqua v. Courtney, reaching that conclusion without the angst of this opinion. Assuming that Roulier logged into the profile information page, what "ancillary information" could he see, and why is it relevant here?
Also with respect to the friends list, another factor asks if the list is easily duplicated. The court doesn't understand the implications here either:
Given adequate time and effort, Mr. Roulier could most likely duplicate or nearly duplicate the list of MySpace friends that SOCO had developed. However, this would involve individually contacting thousands of individuals with friend requests, and it is by no means clear that all of those individuals would grant Beatport permission to contact them.
This appears to conflate two concepts: (1) is it possible to copy a MySpace profile's friends list without violating any trade secrets, where the answer apparently is clearly yes, and (2) is it possible to contact each person who follows the ex-employer’s MySpace profile without violating trade secrets, which depends on MySpace’s technical operation and anti-spam mechanisms. If Roulier can simply direct-message each follower to invite them to follow his new venture, then there’s not a trade secret problem; if MySpace only allowed direct messages to people who were already following a profile (as Twitter does), then the court’s assertion is clearer.
Finally, the misappropriation assertion is also ambiguous:
Plaintiffs have alleged a public use of the misappropriated trade secrets, i.e., the promotion of Beatport via plaintiffs' MySpace page and friends.
What the plaintiff apparently is trying to say is that Roulier allegedly logged into an account that was off-limits to him (his former employer’s account) and sent messages promoting his new venture to his ex-employer’s followers. But that’s hardly clear in the court’s odd characterization.
In the end, the court finds the plaintiff’s trade secret misappropriation allegations survive a motion to dismiss. If Roulier did in fact log into his ex-employer’s account to post messages promoting Beatport, then perhaps some trade secret violation did occur. However, I don’t think that violation is either a misappropriation of the "profile," the “account” or the “friends list.” Instead, the case would be so much clearer if the plaintiffs had treated the login credentials as the trade secret rather than the MySpace account associated with those credentials. Protecting a social media account as a trade secret, especially the friends list, is goofy at best; it’s a much more natural fit for trade secret law to protect the keys that control access to a social media account—and the keys' concomitant ability to communicate with followers of that account. So I think this ruling is unnecessarily garbled because the court was presented with a clumsily-framed issue. I’m keeping my fingers crossed that any subsequent rulings will do a better job dividing between the unauthorized post-employment account access and claiming trade secrets in things like publicly available lists of social media friends.
FWIW, I tested on a very similar fact pattern in last year’s Internet Law exam. The exam and answer outline. Interestingly, the plaintiffs didn’t appear to allege any Computer Fraud & Abuse Act claim or analogous state computer crime claim. Perhaps such a claim would be futile after Nosal, but those doctrines played a central role on my exam.
One last point: like many of the other lawsuits over social media accounts or friends lists, I wonder how this lawsuit makes financial sense. It's probable that the litigation is being driven more by bad blood than economics. Consider, for example, this subsequent order by the judge (emphasis added):
ORDER granting 152 Motion to Clarify/Reconsideration Re: Order Dated March 23, 2012 151 . The Court grants an extension for defendants to reply to #144 to April 13, 2012. On review of the pending motions, the Court finds that the length of briefs filed by the parties, particularly by the defendants, is unreasonable to an extreme. For example, the one pending dispositive motion, defendant's motion for summary judgment [#148] is 82 pages long and is supported by 676 pages of exhibits. The mere volume makes it likely that the motion will be denied. The Court requests that plaintiffs' response be short and focus solely on whether there is a genuine issue of material fact in dispute that requires a trial. If that can be shown, motion #148 will be denied. Defendants' motion to exclude Phillips is 62 pages long. Defendants' motion to exclude Freedberg is 51 pages long. The supplemental motion for sanctions is 44 pages long. Plaintiffs too have been unable to avoid this verbose jousting. For example, plaintiffs' response to #122 is 39 pages long, and their response to #137 is 42 pages long. That is no way to persuade a court, and I now see that my attempt in my practice standards to let lawyers alone and to avoid artificial restrictions on briefs does not work with these parties and lawyers. I do not have the time to devote hours upon hours sorting through the reams of paper being exchanged in this nasty fight between Mr. Christou and Mr. Roulier. Henceforth, neither party may file a motion or a brief longer than 20 pages, with the exception of defendants' reply to #144 which is limited to 10 pages. No more extensions absent very good cause. No more motions unless the lead counsel for the parties have met, face to face, and made a good faith attempt to resolve the dispute.
When a judge issues a public bitchout like this to the lawyers, it's a pretty good sign they're doing something wrong. In my experience, a "win at any cost" approach almost always results in a big loss for everyone.
* "Social Media and Trademark Law" Talk Notes
* Court Denies Kravitz’s Motion to Dismiss PhoneDog’s Amended Claims -- PhoneDog v. Kravitz
* An Update on PhoneDog v. Kravitz, the Employee Twitter Account Case
* Another Set of Parties Duel Over Social Media Contacts -- Eagle v. Sawabeh
* Employee's Claims Against Employer for Unauthorized Use of Social Media Accounts Move Forward--Maremont v. SF Design Group
* Courts Says Employer's Lawsuit Against Ex-Employee Over Retention and Use of Twitter Account can Proceed--PhoneDog v. Kravitz
* Ex-Employee Converted Social Media/Website Passwords by Keeping Them From Her Employer--Ardis Health v. Nankivell
* Court Declines to Dismiss or Transfer Lawsuit Over @OMGFacts Twitter Account -- Deck v. Spartz, Inc.
* Employee's Twitter and Facebook Impersonation Claims Against Employer Move Forward -- Maremont v. Fredman Design Group
Posted by Eric at April 25, 2012 09:25 AM | Trade Secrets
TrackBack URL for this entry: