Twitter has accused Meta Platforms of stealing trade secrets to create its newly launched microblogging platform, Threads, potentially igniting a legal confrontation between the two social media giants. However, experts indicate that Twitter would face significant challenges if it decides to pursue litigation.
In a letter dated Wednesday, Twitter asserted that Meta misappropriated its trade secrets in developing Threads and demanded cessation of any such use. The company claimed that Meta hired numerous former Twitter employees who allegedly kept devices and documents from their previous jobs, suggesting that Meta specifically assigned these employees to assist in the development of Threads.
The possibility of a lawsuit remains uncertain.
A request for comments from Twitter’s spokesperson was not answered immediately. In contrast, Meta spokesperson Andy Stone stated in a post on Threads on Thursday that none of the individuals working on the platform’s engineering team previously worked for Twitter.
Legal professionals note that accusations of trade secret theft are not uncommon, particularly when companies contend that competitors hired former employees who possess similar products. Such cases can be challenging to substantiate.
To succeed in court, a company must demonstrate that its competitor gained access to valuable economic information that had been kept secret through “reasonable efforts,” explained Polk Wagner, a law professor at the University of Pennsylvania.
Determining what qualifies as “reasonable efforts” is often complex, according to Wagner.
“Courts indicate that merely claiming something is a trade secret is insufficient. However, one is not required to implement so many barriers that no one can engage with the information,” he elaborated.
Defining Confidential Information
Meta’s launch of Threads on Wednesday marks a significant potential challenge for Twitter, which has faced growing disconnection with users and advertisers since billionaire Elon Musk acquired the platform last year.
Threads resembles Twitter in several ways, along with various other emerging social media platforms in recent months.
One factor courts assess is whether companies clearly conveyed which specific information was designated as a trade secret to their employees.
Sharon Sandeen, a professor at Mitchell Hamline School of Law, noted that companies have struggled in trade-secret cases when they impose broad confidentiality agreements. Such sweeping language often leaves employees unclear about what information is truly confidential.
Experts emphasize that companies frequently overestimate the strength of their trade-secret claims when they pursue litigation.
Sandeen cited the notable legal conflict between Alphabet’s Waymo, focused on self-driving technology, and Uber Technologies, which began with claims of thousands of stolen documents but ultimately revolved around a smaller set of materials. The case concluded with Uber settling for $245 million in company shares shortly before the trial.
While trials in trade secret cases are uncommon, settlements are prevalent, according to Wagner.
“The motivations to settle are particularly strong in these situations, as neither party wants sensitive information to be publicly disclosed more than necessary,” he remarked.
© Thomson Reuters 2023
