Misappropriation of Trade Secrets in the Digital Age

At this time, many modern organizations and companies are using the internet, social media and other forms of digital media to market their business. It is becoming ever more apparent that social media marketing can have a significant impact on the success, popularity, and growth of the business. Thus, social media accounts and social media marketing techniques have become an important part of the trade secrets of the business. Trade secrets contained in digital format include customer lists, business practices, price lists, scientific data, technical data, formulas, programs, codes, and financial data. In 2013, the State Legislature enacted the Texas Uniform Trade Secrets Act (TUTSA) to create a cause of action for the theft of trade secrets. The Defend Trade Secrets Act, passed in 2016, is the Federal version of TUTSA.  To expand upon the protections of digital accounts and secrets under TUTSA, the Texas House and Senate amended TUTSA under House Bill 1995, to offer clearer definitions and modernize the language of TUTSA. In recent years, there has been an uptick in the number of lawsuits that are filed against former employees for the alleged misappropriation of social media accounts which cause damage to the company’s reputation or bottom-line. Many of these lawsuits focus on the question of who has a superior right to the social media account. In all instances, businesses should install safeguards to ensure that the social media accounts are not solely controlled by one individual so that the company will have access to those sites upon termination of an employee. Safeguards include maintaining business emails linked to the social media accounts, retaining passwords, and crafting a social media policy which protects the company’s interests, outlines acceptable social media activities, and establishes ownership of accounts.

The information presented in this article should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.