Monday, April 7, 2014

With social media, your trade and business secrets can zip around the planet instantly. As usual, the technology is outpacing the law.

By Mark Helfen

Protecting your business’ valuable trade secrets may be more difficult than you think. In a social media world, there are lots of new ways for secrets to be quickly and widely shared, and valuable new information to be created that never existed before.

As usual, the technology is moving faster than the law can keep up.

At next week’s SVForum Marketing and Social Media SIG meeting, Paul Cowie will be speaking on the topic Not So Fast! Employment, Ownership & Privacy Concerns When Using Social Media. Our meeting will be Monday, April 14 at our very nice new location, Detati Communications.

Cowie is a partner in the Labor and Employment Practice Group at the firm Sheppard Mullin, in their Palo Alto office. His focus is on helping companies protect their valuable data in a world where LinkedIn, Facebook, and other social venues allow information to be widely and instantly shared, sometimes without considering their value and importance to the company.

What kind of valuable information? Maybe your customer list. Or possibly your pipeline of current prospects and (hopefully) future customers. Maybe the features being planned for you next release. Or a planned price change. As your employees form connections to the broader world using LinkedIn, or Facebook, or Twitter, who owns the connections, and how do you control what information gets shared? To further complicate the situation, more and more social network communication is done with mobile devices owned by the employee.

As an example of where the law is today, Cowie writes about a recent court decision. The company involved had encouraged employees to connect with customers.  “In the first trial of its kind, the court in Eagle v. Morgan held that absent a social media policy, a LinkedIn profile - and all of its connections – belonged to the individual and not the employer.”  You can read the article here.

If you’ve been in the social media and marketing world for a while, have probably heard stories of companies losing valuable connections and information when an employee leaves a company, for example taking all of their Twitter followers with them. Cowie’s view is that you need to think about these problems in advance.

A company would be “crazy” to not protect their technology with patents, said Cowie.  But trade secret information, customer lists, etc... are also valuable. The law isn’t very clear here, and you might be surprised by how little control you have over what employees do with their personal social network. But the first step is a policy, in advance of when you need it.

Another place where employee and employer interests collide are devices like cell phones or pad computers. BYOD, or bring your own device, is popular with both employers and employees. But if you build a list of contacts on your personal phone and then leave the company, who owns the list?

When I interviewed Cowie, I asked who owned the cell phone he was talking on. It was his personal phone, though it can be erased by his law firm if it was lost, or presumably if he left the firm. He predicted that “black phones” the emerging products that are supposedly secure from interception, will be the phones of choice for executives in the future, particularly those that travel outside the U.S. 

So do you need an attorney sitting in on your marketing planning sessions with your social media team? Companies need to protect their assets, but doing what’s practical may outweigh legal concerns. But the first step is a policy. So come by Monday night, and begin to learn how to balance risk and reward in the social marketing environment.

Be sure and sign up at the Marketing and Social Media Meetup site:


Mark Helfen is a freelance writer, journalist, and marketing consultant.

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