Summary
This post examines a California case where an employee's LinkedIn contacts became the focal point of a trade secret dispute. The employer argued that the compiled list of LinkedIn connections constituted a trade secret, while the employee contended that such contacts were publicly accessible. The court recognised the customer list as a trade secret but left the status of LinkedIn contacts for jury determination, noting the complexity involved in identifying and leveraging such contacts. The analysis extends to the Indian context, highlighting the significance of well-drafted employment contracts and effective information security measures. The discussion underscores that legally valid secret safekeeping is crucial in confidential information disputes in India.
This question came up in an Employer-Employee trade secret dispute before a California Court. David Oakes was working in a sales position with a company called Cellular Accessories under an Employment Agreement with a clause to safeguard the company’s trade secrets. As a part of his employment with Cellular Accessories, David established more than nine hundred contacts on LinkedIn and maintained the list on his computer. The list was updated whenever a new contact was made.
On leaving the company, David retained his LinkedIn account, and obviously, its contacts, and started a competing company called Trinitas. Cellular Accessories sued David and his company for breach of post-termination obligations of the employment agreement, and confidential information misappropriation. Among others things, Cellular Accessories claimed that David’s use of the compiled prospective customer list and LinkedIn contacts established during employment were trade secrets of Cellular Accessories and could not be used by him. David argued that LinkedIn contacts were publicly accessible contacts, compiled from public information and could not avail of trade secret protection.
The Court decided that the customer list is a trade secret, but left the question of LinkedIn connections for Jury determination. The Court observed during its proceedings that the contacts may be publicly accessible, but the effort required to identify each contact, scrape their requirements, and other information to make a business pitch, might draw them into the ambit of trade secret protection. The decision on protecting LinkedIn contacts as trade secrets rests, among other facts, on LinkedIn’s predictive technology and its ability to propose prospective contacts based on pre-existing contacts.
This will be an interesting decision to watch out for. With the rise in start up activity, Employer-Employee disputes are expected to rise, and Indian courts will soon have to deal with such questions. Two factors would prove determinative when a trade secret dispute arises in India:
1. A well drafted employment contract and 2. Measures taken by the Employer – Policy, Physical/Information Security steps, marking etc.
Legally valid secret safe keeping is the key to succeed in a confidential information dispute in India.
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