Threads, Meta’s new microblogging app, has taken the social media world by storm, gaining 100 million users in less than five days—a milestone that took Twitter, which now has an estimated 350 million users, four years to reach.
Launched as a “friendly” alternative to the market leader, Threads may soon have a legal battle on its hands, following Twitter’s accusations that Meta has stolen its trade secrets.
Legal action is yet to be taken, but Twitter’s lawyer, Alex Spiro, has made clear in a letter to Meta CEO Mark Zuckerberg that “Twitter intends to strictly enforce its intellectual property rights”. His letter accuses Meta of engaging in “systematic, wilful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property”.
The fallout largely hinges on Meta’s alleged hiring of former Twitter employees who, Spiro claims, “had and continue to have access to Twitter’s trade secrets and other highly confidential information”. He alleges that these employees were hired with the specific purpose of using these secrets to develop a “copycat” app.
Meta’s Communications Director, Andy Stone has publicly responded in a Thread post, claiming that “no one on the Threads engineering team is a former Twitter employee — that’s just not a thing”.
Whatever the outcome of the clash, the dispute highlights the importance of trade secrets for businesses and the need to keep them safe.
What are trade secrets?
Trade secrets are a specific form of confidential information which are commercially valuable and known only to a limited group of people. For example, Colonel Saunders’ eleven herbs and spices used by KFC, or the algorithms behind Google’s proprietary search. And, unlike patents or trademarks, trade secrets don’t require registration.
They’re also incredibly popular—in the UK, trade secrets are a preferred strategy for innovative UK firms, according to a 2021 report, The economic and innovation impacts of trade secrets, from the UK Intellectual Property Office.
Approximately 70% of UK firms who develop product and process innovations use trade secrets to protect these innovations, and they’re particularly important to UK firms in the R&D services, tech, and across manufacturing and non-manufacturing sectors.
Trade secrets are protected under the common law of confidentiality and under the Trade Secret Regulations 2018 (the Regulations) in the UK.
How to protect your trade secrets
From a practical perspective, there are lots of ways that a business can keep its trade secrets safe. This can range from putting in place non-disclosure agreements, ensuring that only a few select individuals within the business have access to them, conducting training to increase employee awareness of the importance of protecting them, to running a full audit of trade secrets and implementing tailored protective measures for each of them. Famously, Coca-Cola locked away its secret formula in a vault for most of its history!
Businesses must prioritise protecting their trade secrets, but there are also ways that they can be exploited to advantage the business, such as by licensing them to others (subject to strict obligations to maintain secrecy, of course).
Whatever you do with your trade secrets, the most important thing to remember is that their value is in the competitive advantage they give you, as their owner.
Capital Law’s commercial team are experts in advising on protecting confidential information and trade secrets. We regularly prepare NDAs for clients and provide advice on how best to protect a business’s most valuable assets. If you’re considering an NDA or need advice on protecting your trade secrets, get in touch with our experts now.
