As an intellectual property attorney, I too am surprised at times by the issues that arise in the context of social media and how they are reported. Here, according to the lawsuit allegations by PhoneDog, the novel legal issues appear to be who has rights in a Twitter account used by an employee in the course and scope of his employment, who has rights to claim value in the followers and just what lost value can be established in such followers. From a variety of perspectives this story has interest. However, even though the complaint by PhoneDog was filed months ago, it seems to have only caught fire this month. (See note below.)
According to the complaint filed in U.S. District Court, Northern District of California, since April 2006, Noah Kravitz worked for PhoneDog as a product reviewer and video blogger. He was given use and maintained the Twitter account “@PhoneDog_Noah.” Kravitz would submit written and video content to PhoneDog which was then transmitted to its users via a variety of mediums, including PhoneDog’s website and the subject Twitter account. PhoneDog also alleged that during the course of Kravitz’ employment, the subject Twitter account generated approximately 17,000 Twitter followers. According to PhoneDog, all @PhoneDog_Name Twitter accounts used by its employees, as well as the passwords to such accounts, constitute proprietary, confidential information.
After Kravitz ended his employment with PhoneDog in October 2010, PhoneDog requested that he relinquish the Twitter account. In response, Kravitz changed the Twitter account handle to “@noahkravitz” and he continues to use the account. As a result, PhoneDog alleges that it has suffered a loss of $340,000. This figure was calculated by multiplying 17,000 followers at $2.50 per follower per month “according to industry standards” and multiplied further by eight months, the time period alleged that Kravitz used the account at PhoneDog. The lawsuit was filed against Kravitz asserting claims under California law for: (1) misappropriation of trade secrets; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; and (4) conversion.
In ruling on Kravitz’ motion to dismiss the lawsuit, the court allowed much of the case to proceed at this early stage on the allegations made by PhoneDog and laid out what PhoneDog will likely need to prove. “[S]hould PhoneDog be able to establish that it has some property interest in the Twitter account or the password and follower list, the question becomes what is the proper valuation of such items.” [Order dated Nov. 8, 2011, granting in part and denying in part Kravitz’ Motion to Dismiss] We’ll have to see how this one plays out.
Note: PhoneDog’s complaint was filed in federal court on July 15, 2011 and has been available since July 20, 2011 to view on PACER, a website dedicated to making court filed documents available to the public. However, the story generated a flurry of media activity many months later. [NY Times article dated Dec. 25, 2011]; [CNN article dated Dec. 28, 2011]; [AP Story dated Dec. 29, 2011]; [TwinCitiesNews story dated Dec. 29, 2011]. PACER also shows that Kravitz has filed a motion to dismiss PhoneDog’s first amended complaint hearing on which is set for Jan. 26, 2012 at 10:00 AM in Courtroom B, 15th Floor, San Francisco before Magistrate Judge Maria-Elena James.