In 2011, InfoLawGroup began its "Legal Implications" series for social media by posting Part One (The Basics) and Part Two (Privacy). In this post (Part Three), we explore how security concerns and legal risk arise and interact in the social media environment.There are three main security-related issues that pose potential security-related legal risk. First, to the extent that employees are accessing and using social media sites from company computers (or increasingly from personal computers connected to company networks or storing sensitive company data), malware, phishing and social engineering attacks could result in security breaches and legal liability. Second, spoofing and impersonation attacks on social networks could pose legal risks. In this case, the risk includes fake fan pages or fraudulent social media personas that appear to be legitimately operated. Third, information leakage is a risk in the social media context that could result in an adverse business and legal impact when confidential information is compromised.
Phonedog v. Kravitz, currently pending in the Northern District of California, raises unprecedented issues regarding social media. Is a list of Twitter followers protected as trade secret under California law? What is the value of a Twitter follower? $2.50 per month? I discussed these questions today with Fox News.
One issue still bobbing below the social networking surface is disclosure of trade secrets, such as a client/customer list, through use of social networking. With seemingly everyone, including us here at the Info Law Group, connecting to business associates and potential and actual clients, the question is not academic.
In business or technical discussions with potential investors, customers, suppliers, licensors, franchisees, or joint venture partners, it is often very difficult to determine how much needs to be disclosed and exactly who "owns" which information and ideas. Were the parties just brainstorming? Did they independently develop a similar approach to a problem? Litigation over NDAs can be costly, public, and ultimately unsatisfactory to the party claiming a breach, especially if it is hard to prove the intended scope of the agreement and the actual source of information. When is it worthwhile using NDAs, and how can they be made more effective?