Social media has led to some new forms of intellectual property, including the “Twitter follower” (a registered user of microblogging site Twitter that is interested in the postings of another user and that other user permits him/her to receive those postings automatically). A case that might have brought some clarity to the question of the value of the Twitter follower has just settled. PhoneDog v. Kravitz., No. C 11-03474 MEJ (N.D. Cal. Nov. 8, 2011, settlement announced Dec. 3, 2012).

The case involved a company employee whose job included preparing written and video content that his employer transmitted to customers in a variety of ways, including Twitter. The employee also accessed the employer Twitter account via a password in order to disseminate information and promote the company’s services. That employer account had 17,000 Twitter followers.

The employee then left to work for a competitor, changing the account name to his personal name, and taking all 17,000 followers with him. The former employer claimed: misappropriation of trade secrets; intentional interference with prospective economic advantage; negligent interference with prospective economic advantage; and conversion. In the lawsuit, the former employer claimed that the value of each Twitter follower was $2.50/month, so the total damage was $340,000 for the 8 months that had passed since the employee left.

In November of 2011, the court ruled that the former employer’s allegations survived a motion to dismiss on the misappropriation of trade secrets and conversion claims, but open questions remained, such as whether the followers actually were customers and whether the followers are trade secrets since they are to some extent visible. The court dismissed the tortious interference claims, because the former employer failed to allege facts regarding how his conduct disrupted relationships with customers or advertisers and any economic harm it caused. The parties then went to mediation, and reported the case settled on December 3, 2012. Although the parties have not disclosed the terms of the settlement, the Associated Press reported that the employee maintained control of the Twitter account that bears his name and the now 23,000 followers. See Meg Kinnard, Suit Settled Over Value of Twitter Followers, Associated  Press, Dec. 4., 2012.

Does your social media policy address this issue? Do your policies relating to departing employees address it?

Sue Ross ( / +1 212 318 3280) is a lawyer in Norton Rose Fulbright’s US intellectual property practice.