Misappropriation of trade secrets In 2011, PhoneDog sued Kravitz for trade secret misappropriation or misuse of a company trade secret. PhoneDog claimed that Kravitz's Twitter account, particularly the password to the account, was a trade secret, and that his continued use of the account to connect followers to a PhoneDog competitor was misappropriation. The claim for misappropriation of trade secrets is governed by the California Uniform Trade Secrets Act (CUTSA). CUTSA defines a trade secret as "information, including a formula, pattern, compilation, program, device, method, technique, or process, that: 1) Derives independent economic value ... from not being generally known to the public ... and 2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
Interference with prospective economic advantage In the initial filing PhoneDog failed to establish the relationships allegedly compromised by the defendant, as well as the duty owed to PhoneDog by Kravitz; as a result the court did not find merit in these claims and on November 8, 2011, they were dismissed from suit No. C 11-03474 MEJ and PhoneDog was offered an opportunity to revise their claims. On January 8, 2012, PhoneDog submitted a revised set of claims establish that the harmed relationships were: 1) 17,000 Twitter users as well as the merchants; and 2) Kravitz was operating as an agent of PhoneDog in operating the Twitter account and thus had a duty that was not met and thus resulted in negligent interference. The court accepted these revised claims. PhoneDog claimed that Kravitz committed intentional interference with their business (or
their "prospective economic advantage") by using confidential information to disrupt their relationship with their customers. "In Korea Supply Co. v. Lockheed Martin Corp., the
Supreme Court of California compiled and summarized the elements of the tort as: 1) an economic relationship between the
plaintiff and some third party, with the probability of future economic benefit to the plaintiff; 2) the defendant's knowledge of the relationship; 3) intentional acts on the part of the defendant designed to disrupt the relationship; 4) actual disruption of the relationship; and 5) economic harm to the plaintiff approximately caused by the acts of the defendant." The elements of a conversion claim under California law are: "1) ownership of a right to possession of property; 2) wrongful disposition of the property right of another; and 3) damages." Kravitz argued that PhoneDog did not establish that they owned the Twitter account, but the court held that "the nature of [the] claim is at the core of this lawsuit and cannot be determined on the present record."
Jurisdiction Kravitz further argued that a federal district court was not the correct venue for the case, because the alleged trade secrets were worth less than $8,000, the minimum limit for a federal court case. He referenced sites like TweetValue and whatsmytwitteraccountworth.com to assess the value of his account. The court rejected Kravitz's claim that the value of the Twitter account was too small to bring a case in federal district court. They said that the value of the Twitter followers was so tied up with other parts of the case that they could not dismiss the case on this basis. ==Outcome==