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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Denver Club Owner Fails to Bounce His Partner’s Trade Secrets Lawsuit for Alleged MySpace Friends Theft

Posted in Trade Secrets

On March 14th, a federal court in Denver, Colorado kept alive an electronic dance club owner’s trade secret theft and antitrust lawsuit against one of his former partners, alleging his partner stole his clubs’ MySpace “friends” and tried to drive the owner out of the Denver electronic dance market. In Christou v. Beatport, LLC, No. 10-cv-02912-RBJ-KMT, 2012 WL 872574 (D. Colo. Mar. 14, 2012), the court ruled that plaintiff, Christou, who owned a group of dance clubs in the Denver area popularly referred as the “SOCO” clubs, could maintain a trade secrets misappropriation lawsuit against his former partner, Bradley Roulier, who owned a competing club (“Beta”) and operated an electronic dance music e-commerce site (“Beatport”), for his alleged theft of Christou’s compilation of MySpace friends’ profiles and contact information. The court rejected Roulier’s argument that Christou’s MySpace friends were fair game because they were available on the internet.

Key to the court’s decision was that Christou did not claim his online list of friends was a trade secret, but rather his relationships with those friends. That is, Christou’s efforts and expense in “friending” thousands of potential dance club patrons, and thus having their contact information and permission to contact them, were enough to make his MySpace friendships trade secrets, at least at the early stages of the case. Roulier’s use of those friendships to market his Beatport site and draw people to Beta, the court further held, could constitute theft of those secrets. Though the court noted that Roulier might be able, with enough time and effort, to duplicate Christou’s friends list, this would involve making thousands of friend requests, and it was uncertain that those people would accept the requests as they did with Christou.

Christou also sufficiently protected its friend relationships, as required by the Colorado Trade Secrets Act, by securing SOCO’s profile with a confidential login and password, and distributing that information only to a limited number of his employees (including Roulier) for the purpose of maintaining and updating SOCO’s profile.

This decision is not unlike other court decisions allowing companies to sue its employees for alleged theft of online social networking profiles and related information. Seyfarth’s trade secrets team also blogged about a December 2011 federal court decision in Philadelphia where the court allowed a former employee to maintain a claim for theft of its LinkedIn profiles, as well as a November 2011 Northern District of California decision allowing an employer to sue a former employee for his unauthorized, post-employment use of its Twitter account. I also recently gave a Skype interview to LexBlog regarding a February 2012 decision allowing a lawsuit to proceed against the operator of Facebook’s Farmville app for alleged theft of concepts and features. These decisions appear careful to protect a company’s sweat equity in its online networking profiles, so long as the information is not readily available.