BFV Perspectives, Noncompete & Trade Secrets, | Aug 03, 2023

Tangled Web: Meta’s Alleged Trade Secret Theft From Twitter

In the wake of Meta’s rollout of the Threads app – a direct competitor to Twitter[1] – Elon Musk’s attorney sent Meta a cease and desist letter. The letter alleges that Meta hired former Twitter employees who misappropriated Twitter’s trade secrets and other intellectual property.

This post examines claims made by Twitter’s legal team in the letter and analyzes potential legal implications under California law. A copy of the cease and desist letter is reprinted below:

July 5, 2023


Mark Zuckerberg
Chairman and Chief Executive Officer
Meta Platforms
1 Meta Way
Menlo Park, CA 94025

Re: Threads

Dear Mr. Zuckerberg:

I write on behalf of X Corp., as successor in interest to Twitter, Inc. (“Twitter”). Based on recent reports regarding your recently launched “Threads” app, Twitter has serious concerns that Meta Platforms (“Meta”) has engaged in systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.

Over the past year, Meta has hired dozens of former Twitter employees. Twitter knows that these employees previously worked at Twitter; that these employees had and continue to have access to Twitter’s trade secrets and other highly confidential information; that these employees owe ongoing obligations to Twitter; and that many of these employees have improperly retained Twitter documents and electronic devices. With that knowledge, Meta deliberately assigned these employees to develop, in a matter of months, Meta’s copycat “Threads” app with the specific intent that they use Twitter’s trade secrets and other intellectual property in order to accelerate the development of Meta’s competing app, in violation of both state and federal law as well as those employees’ ongoing obligations to Twitter.

Twitter intends to strictly enforce its intellectual property rights, and demands that Meta take immediate steps to stop using any Twitter trade secrets or other highly confidential information. Twitter reserves all rights, including, but not limited to, the right to seek both civil remedies and injunctive relief without further notice to prevent any further retention, disclosure, or use of its intellectual property by Meta.

Further, Meta is expressly prohibited from engaging in any crawling or scraping of Twitter’s followers or following data. As set forth in Twitter’s Terms of Service, crawling any Twitter services – including, but not limited to, any Twitter websites, SMS, APIs, email notifications, applications, buttons, widgets, ads, and commerce services – is permissible only “if done in accordance with the provisions of the robots.txt file” available at https://twitter.corn/robots.txt. The robots.txt file specifically disallows crawling of Twitter’s followers or following data. Scraping any Twitter services is expressly prohibited for any reason without Twitter’s prior consent. Twitter reserves all rights, including, but not limited to, the right to seek both civil remedies or injunctive relief without further notice.

Please consider this letter a formal notice that Meta must preserve any documents that could be relevant to a dispute between Twitter, Meta, and/or former Twitter employees who now work for Meta. That includes, but is not limited to, all documents related to the recruitment, hiring, and onboarding of these former Twitter employees, the development of Meta’s competing Threads app, and any communications between these former Twitter employees and any agent, representative, or employee or Meta.

Very truly yours,

Alex Spiro

Elon Musk
Jennifer Newstead


Unraveling the Allegations

Unquestionably, Twitter and Meta are competitors. Both companies operate social media networks and Meta designed the new Threads product to compete with Twitter. The letter generically alleges that Meta hired “dozens” of former Twitter employees.

Further, Twitter alleges that the former employees had access to Twitter’s trade secrets and they improperly retained Twitter documents and electronic devices. Finally, Twitter alleges that Meta assigned the former Twitter employees to develop the Threads app.

Twitter did not provide any specific evidence in its letter, such as the names of the former Twitter employees or any actual evidence that the unnamed employees retained documents or devices. In response, Meta has categorically denied that any former Twitter employees worked on the Threads engineering team.


Threading the Needle: California Law on Trade Secret Theft

Both Twitter and Meta are currently headquartered in California. Under California law, noncompete agreements are unenforceable. Practically speaking, that means Twitter cannot forbid its former employees from working for a competitor.

However, Twitter still has the right to protect its intellectual property, including its trade secrets. Twitter’s employees likely signed agreements in which they agreed that they will maintain the confidentiality of Twitter’s trade secrets, even after they are no longer employed by Twitter.

California has adopted a version of the Uniform Trade Secrets Act (“CUTSA”). The Act prohibits misappropriation of trade secrets and provides certain remedies.

In CUTSA, a trade secret is defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and

(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Twitter’s letter does not specifically identify what information the former employees allegedly took. If Twitter were to file suit, it would bear the burden of proving that the former employees misappropriated information that legally constitutes a trade secret.

Assuming Twitter could prove that the former employees misappropriated trade secrets, to succeed on claims against Meta, Twitter would then need to prove that those trade secrets were actually shared with Meta.

Viewing the situation through a cynical lens, one could speculate that Twitter’s threat is actually an effort to get access to Meta’s confidential information. By accusing Meta of misappropriating trade secrets, Twitter creates an avenue through which it would need to review Meta’s code to verify that the code was not derived from Twitter’s confidential information.

Due to the competitive and highly confidential nature of the subject matter, the court would likely appoint a special master or other neutral party to review and compare the code for this exact reason.


Sewing Up Meta’s Defense

Meta has already fired back by challenging the foundation of Twitter’s claims. If Meta can prove that it has not hired any former Twitter employees to work on the Threads app, Twitter will have a tough time proving that the app was derived from Twitter’s confidential information. At the time of this blog post, Twitter has not filed a lawsuit against Meta based on these threatened claims. Until that happens, it is unlikely that Meta will take any additional steps to address the allegations.


In Stitches? How Can We Help?

If you are a business owner and you are concerned about a potential theft of your trade secrets – or if you want to know what you can do to discourage and prevent trade secret theft within your organization, please reach out to me.


[1] Although Twitter recently changed its name to “X,” for clarity, this blog post will continue to refer to the social media network as Twitter.

BFV Perspectives, Noncompete & Trade Secrets, | Aug 03, 2023
Katherine M. Silverman
Katherine M. Silverman

Katherine Silverman is a business litigator with a unique depth of experience in handling commercial real estate disputes.