Twitter’s accusation that Meta Platforms stole trade secrets to develop its new microblogging site may initiate a potential legal showdown between these social media giants. However, experts suggest that Twitter would face significant obstacles if it decides to sue.
In a letter sent on Wednesday, Twitter alleged that Meta employed its trade secrets to create its social media platform, Threads, and demanded a cessation of its use. Twitter claimed that Meta hired numerous former Twitter employees who had “improperly retained” devices and documents from the company, and deliberately assigned them to work on Threads.
It remains unclear whether Twitter will file a lawsuit, as their spokesperson has not responded to requests for comment. On the other hand, Meta spokesperson Andy Stone stated in a Threads post on Thursday that no members of their engineering team are former Twitter employees.
Legal experts explain that while many companies have accused their competitors of stealing trade secrets by hiring former employees and creating similar products, these cases are challenging to prove. To succeed, a company must demonstrate that their competitor acquired economically valuable information and that they had taken “reasonable efforts” to keep it confidential, according to Polk Wagner, a law professor at the University of Pennsylvania. However, determining what qualifies as “reasonable efforts” can be complex.
When assessing these cases, courts also consider whether a company made it clear to their employees that specific information was classified as a trade secret. Professor Sharon Sandeen from Mitchell Hamline School of Law noted that companies have lost trade secret cases when they wrongly claimed that all company information was confidential, without providing clear distinctions. The courts assert that employees cannot determine what is and isn’t confidential based on such broad language.
Experts state that companies often bring trade-secret cases only to realize that their claims aren’t as substantial as initially thought. They cite the legal battle between Alphabet’s Waymo self-driving vehicle unit and Uber Technologies as an example. The case initially involved accusations of thousands of stolen documents but ultimately revolved around a select few, leading Uber to settle on the eve of trial for $245 million worth of its shares.
While trials in trade-secret cases are rare, settlements are common due to the strong incentive to limit public discussion of the secrets involved, according to Wagner.
In summary, the dispute between Twitter and Meta Platforms regarding trade secret theft represents a potentially significant legal confrontation. However, proving such allegations can be challenging, and settling the dispute outside of court may be the preferred outcome for both parties.
© Thomson Reuters 2023
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