In Illinois federal court, a plaintiff alleged aspects of their LinkedIn group were trade secrets misappropriated by the defendant. The defendant moved to dismiss for failure to state a claim. The court denied the motion in part and granted in part, ruling that portions of social media groups may be protectable under the state’s trade secret law. CDM Media USA, Inc. v. Simms, Case No. 14-cv-9111 (N.D. Il., Mar. 25, 2015) (Shah, J.).
Summary of the case. This case concerns the ownership rights to private social media groups. The plaintiff, CDM Media USA, created a private LinkedIn group for CIOs and other IT executives interested in CDM events. The defendant, Robert Simms, was the point person for this group while he was employed at CDM. When Simms resigned from CDM, he allegedly refused to return the group’s membership list and communications to CDM and later allegedly used the materials to compete against CDM by attempting to solicit CDM’s current and potential customers and vendors. CDM filed suit alleging, among other things, violation of the Illinois Trade Secrets Act. Simms filed a motion to dismiss for failure to state a claim. The court denied the motion with respect to the group’s membership list but granted the motion with respect to “confidential information” contained in the group.
Legal standards under the Illinois Trade Secrets Act. A claim under the Illinois Trade Secrets Act requires the plaintiff allege (1) they have a trade secret (2) that was misappropriated (3) using the defendant’s business. “Trade secret” under the act requires the information sought to be protection derive economic value from its secrecy and that the information be subject to reasonable efforts of secrecy and confidentiality.
The Court’s ruling. Regarding the group’s membership list, the Court denied the motion to dismiss stating there was too little known about the contents, etc. of the group at the present stage of litigation to rule on the issue as a matter of law, without further factual inquiry. However, the Court granted the motion to dismiss regarding the “confidential information” contained in the group stating CDM’s blanket allegations, i.e., that the LinkedIn group contained confidential information, were insufficient. According to the Court, the plaintiff must allege certain messages or classes of messages contain trade secrets and what it is about the messages that satisfy the trade secrets definition.
Takeaways. Whether or not membership lists of private social media groups are protectable under Illinois trade secret law will likely depend on the privacy/confidentiality measures employed to protect to information and whether the information economic value from its secrecy. Regardless, it is safe to say that in no circumstances will a public group’s membership list be protectable because they lack a fundamental tenet of trade secret law, i.e., the information must be “secret.” Moreover, information contained within a private social media group, such as messages, may be protectable. However, for protection to exist, information within the group desired to be protected must be identified with some specificity and have independent economic value. For more on this topic, please join us for today’s webinar Employee Social Networking: Protecting Your Trade Secrets in Social Media