In the wake of Meta's rollout of the Threads app – a
direct competitor to Twitter1 – Elon Musk's
attorney sent Meta a cease and desist letter. The letter alleges
that Meta hired former Twitter employees who misappropriated
Twitter's trade secrets and other intellectual
property.
This post examines claims made by Twitter's legal team in
the letter and analyzes potential legal implications under
California law. A copy of the cease and desist letter is reprinted
below:
July 5, 2023
VIA ELECTRONIC MAIL AND FEDERAL EXPRESS
Mark Zuckerberg
Chairman and Chief Executive Officer
Meta Platforms
1 Meta Way
Menlo Park, CA 94025
zuckerberg@fb.com
Re: Threads
Dear Mr. Zuckerberg:
I write on behalf of X Corp., as successor in interest to
Twitter, Inc. ("Twitter"). Based on recent reports
regarding your recently launched "Threads" app, Twitter
has serious concerns that Meta Platforms ("Meta") has
engaged in systematic, willful, and unlawful misappropriation of
Twitter's trade secrets and other intellectual property.
Over the past year, Meta has hired dozens of former Twitter
employees. Twitter knows that these employees previously worked at
Twitter; that these employees had and continue to have access to
Twitter's trade secrets and other highly confidential
information; that these employees owe ongoing obligations to
Twitter; and that many of these employees have improperly retained
Twitter documents and electronic devices. With that knowledge, Meta
deliberately assigned these employees to develop, in a matter of
months, Meta's copycat "Threads" app with the
specific intent that they use Twitter's trade secrets and other
intellectual property in order to accelerate the development of
Meta's competing app, in violation of both state and federal
law as well as those employees' ongoing obligations to
Twitter.
Twitter intends to strictly enforce its intellectual property
rights, and demands that Meta take immediate steps to stop using
any Twitter trade secrets or other highly confidential information.
Twitter reserves all rights, including, but not limited to, the
right to seek both civil remedies and injunctive relief without
further notice to prevent any further retention, disclosure, or use
of its intellectual property by Meta.
Further, Meta is expressly prohibited from engaging in any
crawling or scraping of Twitter's followers or following data.
As set forth in Twitter's Terms of Service, crawling any
Twitter services – including, but not limited to, any Twitter
websites, SMS, APIs, email notifications, applications, buttons,
widgets, ads, and commerce services – is permissible only
"if done in accordance with the provisions of the robots.txt
file" available at https://twitter.corn/robots.txt. The
robots.txt file specifically disallows crawling of Twitter's
followers or following data. Scraping any Twitter services is
expressly prohibited for any reason without Twitter's prior
consent. Twitter reserves all rights, including, but not limited
to, the right to seek both civil remedies or injunctive relief
without further notice.
Please consider this letter a formal notice that Meta must
preserve any documents that could be relevant to a dispute between
Twitter, Meta, and/or former Twitter employees who now work for
Meta. That includes, but is not limited to, all documents related
to the recruitment, hiring, and onboarding of these former Twitter
employees, the development of Meta's competing Threads app, and
any communications between these former Twitter employees and any
agent, representative, or employee or Meta.
Very truly yours,
Alex Spiro
cc:
Elon Musk
Jennifer Newstead
jnewstead@fb.com
UNRAVELING THE ALLEGATIONS
Unquestionably, Twitter and Meta are competitors. Both companies
operate social media networks and Meta designed the new Threads
product to compete with Twitter. The letter generically alleges
that Meta hired "dozens" of former Twitter employees.
Further, Twitter alleges that the former employees had access to
Twitter's trade secrets and they improperly retained Twitter
documents and electronic devices. Finally, Twitter alleges that
Meta assigned the former Twitter employees to develop the Threads
app.
Twitter did not provide any specific evidence in its letter,
such as the names of the former Twitter employees or any actual
evidence that the unnamed employees retained documents or devices.
In response, Meta has categorically denied that any former Twitter
employees worked on the Threads engineering team.
THREADING THE NEEDLE: CALIFORNIA LAW ON TRADE SECRET THEFT
Both Twitter and Meta are currently headquartered in California.
Under California law, noncompete agreements are unenforceable.
Practically speaking, that means Twitter cannot forbid its former
employees from working for a competitor.
However, Twitter still has the right to protect its intellectual
property, including its trade secrets. Twitter's employees
likely signed agreements in which they agreed that they will
maintain the confidentiality of Twitter's trade secrets, even
after they are no longer employed by Twitter.
California has adopted a version of the Uniform Trade Secrets
Act ("CUTSA"). The Act prohibits misappropriation of
trade secrets and provides certain remedies.
In CUTSA, a trade secret is defined as "information,
including a formula, pattern, compilation, program, device, method,
technique, or process, that:
(1) Derives independent economic value, actual or potential, from
not being generally known to the public or to other persons who can
obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy."
Twitter's letter does not specifically identify what
information the former employees allegedly took. If Twitter were to
file suit, it would bear the burden of proving that the former
employees misappropriated information that legally constitutes a
trade secret.
Assuming Twitter could prove that the former employees
misappropriated trade secrets, to succeed on claims against Meta,
Twitter would then need to prove that those trade secrets were
actually shared with Meta.
Viewing the situation through a cynical lens, one could
speculate that Twitter's threat is actually an effort to get
access to Meta's confidential information. By accusing Meta of
misappropriating trade secrets, Twitter creates an avenue through
which it would need to review Meta's code to verify that the
code was not derived from Twitter's confidential
information.
Due to the competitive and highly confidential nature of the
subject matter, the court would likely appoint a special master or
other neutral party to review and compare the code for this exact
reason.
SEWING UP META'S DEFENSE
Meta has already fired back by challenging the foundation of
Twitter's claims. If Meta can prove that it has not hired any
former Twitter employees to work on the Threads app, Twitter will
have a tough time proving that the app was derived from
Twitter's confidential information. At the time of this blog
post, Twitter has not filed a lawsuit against Meta based on these
threatened claims. Until that happens, it is unlikely that Meta
will take any additional steps to address the allegations.
Footnote
1. Although Twitter recently changed its name to
"X," for clarity, this blog post will continue to refer
to the social media network as Twitter.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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