To what extent does one waive privilege if he or she comments about ongoing trade secret litigation in social media or other contexts? Given the substantial publicity surrounding the filing of several high-profile trade secret cases (most notably, the Paypal v. Google lawsuit and Wal-Mart’s lawsuit against whistleblower Bruce Ballard, both of which were covered by the Wall Street Journal, the New York Times, and other leading media), and the significance of social media in communicating the parties’ positions, this is an important consideration in the context of trade secret litigation.
The public’s perception of the merits of a trade secret lawsuit may be as important as the rulings in that litigation, so companies often use print, digital and social media to communicate their positions to investors, venture capital firms, customers, vendors and key employees to assure them about the impact (or lack of impact) of that litigation on their bottom line. (An excellent example is Paypal’s splendid press release explaining its recent trade secret lawsuit against Google). These issues are particularly pronounced in many trade secret cases, where bet-the-company technology may be at issue, and where there is the resulting need to assure those constituencies that a company has exclusive rights to that technology and those parties should continue to work with and support that company.
A federal decision late last year details the importance of being careful about what commentary you or your client provide in any social media or blog about ongoing litigation. In Lenz v. Universal Music Corp., No. 07-3783 (N.D. Calif.), a federal magistrate found that the plaintiff had waived attorney/client privilege by commenting about her case in blogs and social media. (For more information about this and other rulings in this case, please check out the E-Commerce & TechLaw Blog for many fine posts on this case). Lenz arises out of an allegedly improper take down under the Digital Media Communications Act in connection with a video post on Google and it has led to a number of significant rulings in the DMCA context. However, Lenz has also serves as an important reminder of the potential impact of inadvertent social media disclosures on a pending lawsuit.
Last November, the magistrate in Lenz ruled that the plaintiff, Stephanie Lenz, had waived attorney-client privilege by writing about her case repeatedly in e-mail, on her blog, and in G-mail chat sessions. Through these online media, Lenz made representations about conversations she allegedly had with her Electronic Frontier Foundation (EEF) attorneys — conversations that involved why she sued Universal and discussions of legal strategies she was pursuing in her suit against Universal. As a result, the magistrate ruled that these online communications about the case amounted to a waiver of the privilege and that the communications were relevant to the plaintiff’s motives for filing suit against Universal. The magistrate ordered EFF to produce all documents previously requested by Universal which had been withheld due to a claim of attorney-client privilege; in addition, Ms. Lenz was ordered to submit to an additional deposition by Universal’s counsel on these issues.
As with many situations involving the use of social media, the same legal principles generally apply. For example, if a client were to do an interview with a local television station revealing his/her litigation strategy and motivations for an ongoing case, a court would likely find that client waived attorney/client privilege on those issues. Social media is no different, as far as the legal consequences that may flow from those disclosures. The difference is — to quote a recurring theme in this blog — the speed in which decisions are made in the context of social media and trade secret litigation. In my television-interview example, there would be more time for deliberation, vetting and care in ensuring that no inadvertent disclosures were made. In contrast, in the social media context, decisions are made quickly and are driven by perceived desires to get your position out first, and by potential media deadlines. Throw in the pressure, speed and significance of many trade secret cases, and you have the proverbial witches’ brew for an inadvertent disclosure that complicates the litigation.
The take-away: A careful and well-thought out press release at the start of a litigation should present no problem. However, once a trade secret lawsuit commences, prudence dictates that all potential social media communications about a case be directed through or with the approval of one person who can best appreciate the impact of those communications in these potentially conflicting contexts. More often than not, the best person to serve as that clearing house is in-house counsel, who is frequently most familiar with the competing legal, business and public relations aspects of the dispute and can balance them accordingly.