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

Q&A Concerning IP Protection and Social Media Issues in the Workplace

Posted in Social Media, Trade Secrets


The explosion of digital and social media enables companies to work more efficiently and to easily and creatively promote their products and services to large audiences across the globe. Modern technological developments in the workplace, however, come with modern issues – one such challenge for companies is protecting intellectual property (IP) and confidential information in today’s dynamic, digital and mobile environment.

On January 19, the State Bar of California is bringing together leading IP and employment attorneys from private industry, public agencies, private law firms and law schools for a conference in San Francisco on these issues: “Intellectual Property Protection and Social Media Issues in the Workplace.” Seyfarth Shaw is a proud sponsor of the conference and I have the honor of serving as the conference chair.

In this Q&A, I  was interviewed by CREATe.org President and CEO Pamela Passman about the conference and these important issues.

1)    The issue of social media and IP protection is a daunting one for companies. As you were putting together topic areas for the conference, how did you decide what to focus on?

Indeed, companies are challenged today with a broad range of issues related to IP protection in today’s digital and social media environment. For this conference, we considered the top areas of concern and information that would be most practical for participants.

For example, the session “Ownership of IP in the Workplace,” looks at the types of agreements you should and can have employees sign. The “IP Issues You Didn’t Know you Had” panel takes a look at emerging challenges stemming from hackers, third-party hosted sites, open source software, unscrupulous partners who claim your IP as their own, and users of torrents and the Darknet, to name a few. The luncheon program – “Testimonials and Endorsements: How to Properly Involve Employees” – will provide an overview of the restrictions on the use of testimonials and endorsements and will offer general and specific approaches to staying out of trouble when navigating new advertising media. Closing the day is the session featuring Ms. Passman – “IP Theft in the Workplace.” It looks at insider threats – both malicious and unintentional – to confidential information and provides practical steps for improving the protection of IP, including trade secrets.

2)    Why should companies be more proactive when it comes to social media in the workplace?

First, companies need to be aware of the legal risks related to the use of social media in the workplace. These include:

  • Document retention and electronic discovery issues
  • Exposure of confidential information and trade secrets and cybersecurity concerns
  • Securities law concerns, including insider trading
  • Vicarious liability for discrimination, retaliation, defamation, invasion of privacy, trademark & copyright infringement, obscene material and otherwise illegal content

A 2013 Ponemon study, while a bit dated, illustrates some of the scenarios that can get companies in trouble. They interviewed 3317 individuals in six countries (United States, United Kingdom, Brazil, France, China, and Korea) and found that of those surveyed:

  • Over half e-mail business documents from their workplace to their personal e-mail accounts (41 percent say they do it at least once a week);
  • 41 percent download intellectual property to their personally owned smart phones or tablets; and
  • 37 percent use file-sharing applications (e.g., Dropbox™ or Google Docs™) without company permission.

3)    Where should companies start? Is it necessary for your company to have a social media policy in place and, if so, what should your policy include?

Social media platforms attract large audiences worldwide: Facebook has over 1.4 billion account holders and over 936 million daily active users. LinkedIn has over 364 million members in over 200 countries in territories. Given these statistics, it is more than likely that some of your employees are active social media users. It is absolutely necessary for your company to have a social media policy in place, one which should address:

  • Proper Use: acknowledging your company provides its employees internet access, that it is a useful business tool and that employees must use it properly
  • Use During Work Hours While Using Company Provided Equipment/Systems: no or limited use of social media by your employees unless directly related or necessary to perform the job
  • Limitations on Social Media Activity to Those Impacting The Company: acknowledging that social media may be a personal activity and that your company will only seek to impose limitations on its use when it impacts your company, co-workers, clients or third parties who deal with your company

4)    Are there any legal issues for your company to consider regarding employee social media activity?

If your company decides to implement a social media policy or agreement, there are legal implications to take into consideration. Most states have limits on what you can ask an employee regarding social media accounts. Other implications include (but are not limited to):

  • First Amendment: protects free speech
  • Fourth Amendment: protects against unreasonable searches and seizures
  • National Labor Relations Act (NLRA): An employee is protected under the National Labor Relations Act (NLRA) when engaging in a discussion of work conditions with other co-workers on social media, including sharing information about wages, complaining about policies or managers and expressing union support. Section 7 of the NLRA prohibits employers from enacting policies that stifle or prevent employees from engaging in “concerted activity” for “mutual aid and protection”

You should always consult with your company’s legal department to determine the limitations you can impose on employee social media activity.

5)    You have mentioned trade secrets as one type of IP that is particularly vulnerable. What are trade secrets and how can employees access company trade secrets in the workplace?

Because trade secrets can be central to your company’s competitive edge, these company ‘crown jewels’ must be properly protected in the workplace. There are six factors to determine whether information constitutes a trade secret:

  • Extent known outside company
  • Extent known by employees and others inside company
  • Measures taken by company to protect secrecy
  • Value of trade secret to company and competitors
  • Time, effort and money expended in development
  • Ease of difficulty which it can be properly acquired or duplicated by others

Examples of trade secrets include: product launches and designs, formulas, processes, business plans and customer lists. Rogue employees and business partners account for 90% of trade secret misappropriation, the vast majority of this misappropriation occurring by electronic means.

For more information about the conference, please click here. There is still time to register.