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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Tag Archives: CFAA

Computer Fraud and Abuse Act Claims in the First Circuit – Will the Narrow Approach Prevail?

Posted in Computer Fraud, Computer Fraud and Abuse Act

The scope of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030, remains unsettled in the First Circuit after two decisions issued just weeks apart adopted differing approaches to the treatment of such claims.

The CFAA prohibits the intentional access of a computer without authorization or exceeding a party’s authorization to obtain information from a protected computer.  As …

Courts Disagree on Meaning of “Interruption of Service” When Determining Loss Under the Computer Fraud And Abuse Act

Posted in Computer Fraud and Abuse Act

District courts are divided as to whether there is a private right of action under the Computer Fraud and Abuse Act (CFAA) for persons whose computer service is not interrupted but who nevertheless incur costs (a) responding to a CFAA offense, (b) conducting a damage assessment, or (c) restoring computerized data or programs as they were prior to the offense. …

Top 10 Developments/Headlines in Trade Secret, Computer Fraud, and Non-Compete Law in 2013

Posted in Breach of Fiduciary Duty, Computer Fraud, Computer Fraud and Abuse Act, Cybersecurity, Data Theft, Espionage, International, Legislation, Non-Compete Enforceability, Practice & Procedure, Privacy, Restrictive Covenants, Social Media, Trade Secrets, Unfair Competition

By Robert Milligan and Joshua Salinas

As part of our annual tradition, we are pleased to present our discussion of the top 10 developments/headlines in trade secret, computer fraud, and non-compete law for 2013. Please join us for our complimentary webinar on March 6, 2014, at 10:00 a.m. P.S.T., where we will discuss them in greater detail. As with all

Upcoming Webinar: 2013 National Year in Review — What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law

Posted in Computer Fraud, Computer Fraud and Abuse Act, Cybersecurity, Espionage, International, Legislation, Non-Compete Enforceability, Practice & Procedure, Social Media, Trade Secrets

On Thursday, March 6, 2014 at 12:00 p.m. Central, Michael Wexler, Jim McNairy and Josh Salinas will present Seyfarth’s first installment of its 2014 Trade Secrets Webinar series. They will review noteworthy cases and other legal developments from across the nation this past year in the areas of trade secret and data theft, non-compete enforceability, computer fraud, and the interplay …

Nosal Update: Nosal Sentenced to One Year in Federal Prison

Posted in Computer Fraud and Abuse Act, Data Theft

On January 8th, after years of litigation and numerous delays, Executive Recruiter David Nosal was sentenced to one year and a day in federal prison for his April 25, 2013 conviction on three counts under the Computer Fraud and Abuse Act (“CFAA”), two counts under the Economic Espionage Act (“EEA”), and one count of conspiracy to violate the CFAA and …

Upcoming Webinar: The Stakes Just Got Higher – Criminal Prosecution of Trade Secret Misappropriation

Posted in Computer Fraud and Abuse Act, Data Theft, Espionage, Practice & Procedure, Trade Secrets

On Tuesday, December 11, 2013 at 12:00 p.m. Central, Seyfarth attorneys Michael D. Wexler, Molly M. Joyce and Justin K. Beyer will present the twelfth and final installment in our 2013 Trade Secrets webinar series, focusing on criminal liability for trade secret misappropriation.

The topics they will cover include…

Trade secret misappropriation: what it is and how does it happen

Nosal Update: Court Denies Motion for Acquittal and New Trial in Marathon CFAA and Trade Secret Misappropriation Criminal Case – Part III

Posted in Computer Fraud and Abuse Act, Cybersecurity, Data Theft, Espionage, Practice & Procedure, Trade Secrets

In Parts I and II of this post, we looked at the Court’s ruling on Nosal’s motion for acquittal and new trial following his conviction of three CFAA counts, two EEA counts and one count of conspiracy. In this final part, we look at what may lie ahead for Nosal and lessons employers may learn from this case.

What’s Next …

Nosal Update: Court Denies Motion for Acquittal and New Trial in Marathon CFAA and Trade Secret Misappropriation Criminal Case – Part I

Posted in Computer Fraud and Abuse Act, Data Theft

On April 25, 2013, a federal jury convicted Executive Recruiter David Nosal on three counts under the Computer Fraud and Abuse Act (“CFAA”), two counts under the Economic Espionage Act (“EEA”), and one count of conspiracy to violate the CFAA and EEA, for Nosal’s conduct leaving his former employer and establishing a competing business in 2004 and 2005.

The conviction …

Corporate Recruiter Convicted of Computer Fraud and Trade Secret Theft By San Francisco Jury

Posted in Computer Fraud and Abuse Act, Data Theft, Trade Secrets

By Robert Milligan and Joshua Salinas

A California federal jury convicted a San Francisco executive recruiter this week for violations of the Computer Fraud and Abuse Act (“CFAA”) and theft of trade secrets from his former employer. The conviction represents a significant landmark in the closely watched eight-year case that deepened a federal circuit court split concerning the appropriate scope …

The Computer Fraud and Abuse Act and Disloyal Employees: A Narrow Bridge To Nowhere?

Posted in Computer Fraud, Computer Fraud and Abuse Act, Data Theft, Trade Secrets

By Gary Glaser and Jacob Oslick

An old folk melody describes the world as “a very narrow bridge,” where one misstep can bring disaster. The song seeks to inspire, calling on people to have “no fear at all” while crossing through life’s perils.

However inspiring this song might be, some metaphorical bridges just aren’t worth crossing. Trying to assert Computer …

Recent California Federal Court Rulings Muddy the Interpretation of the Computer Fraud and Abuse Act

Posted in Computer Fraud and Abuse Act

Does the Computer Fraud and Abuse Act (“CFAA”) prohibit hacking–improperly gaining entrance into a computer system–or simply prohibit improper use of a computer system? U.S. Courts of Appeal are divided. Now, district and appellate court judges in a single federal case pending in the Northern District of California, U.S. v. Nosal, have produced several divergent opinions regarding congressional intent with …

North Carolina Federal Court Uses Computer Fraud and Abuse Act Claim to Exercise Supplemental Jurisdiction Over State Law Claims Against Former Employee and her New Employer

Posted in Computer Fraud and Abuse Act

A North Carolina federal court judge exercised his discretion recently to deny a Federal Rule 12(b)(1) motion to dismiss, for lack of subject-matter jurisdiction (complete diversity was absent), multiple state law claims filed by NouvEON against its ex-employee and her new employer. One of the eight counts in the complaint alleged a federal cause of action, violation of the federal …

California Federal Court Allows Non-Signatory to Arbitration Agreement to Compel Arbitration in Trade Secrets Dispute

Posted in Computer Fraud and Abuse Act, Restrictive Covenants, Trade Secrets

A federal district court in the Northern District of California recently found that a non-signatory to an arbitration agreement may enforce that agreement against a signatory and compel arbitration under the doctrine of equitable estoppel.

Semin, a software developer, worked for Torbit, Inc. He signed an employment agreement containing a proprietary information non-disclosure provision, and a commitment not to compete …

Missouri Federal Court Finds Violations of Employment Agreement May Constitute Unlawful Access Under the Computer Fraud and Abuse Act

Posted in Computer Fraud and Abuse Act, Restrictive Covenants, Trade Secrets

By Paul Freehling and Joshua Salinas

A recent Missouri federal court opinion describes an almost unbelievable scenario. Employees signed well-drafted employment agreements — containing such provisions as non-competition, confidentiality, promise of loyalty, and commitment to return employer’s property within 24 hours of termination of employment — and then incorporated and operated a competitor company while still employed. Moreover, they transferred …

Computer Activists Take Over Sentencing Commission Website

Posted in Computer Fraud and Abuse Act, Legislation

Anonymous, the aptly named anonymous collective of hackers, hacked into the United States Sentencing Commission’s website on January 23 to protest the government’s prosecution of Aaron Swartz, who committed suicide last month. The group initially hacked the site on Friday January 22, replacing the contents of the site with its own video. In the video, which has since been …

Computer Fraud and Abuse Act Claims Subject to Heightened Pleading Requirements

Posted in Computer Fraud and Abuse Act, Practice & Procedure

In a recent Northern District of California decision, Judge Saundra Brown Armstrong upheld the Ninth Circuit’s ruling in Nosal, and at the same time, held that fraudulent conduct claims under the Computer Fraud and Abuse Act are subject to the heightened pleading requirements of Rule 9 of the Federal Rules of Civil Procedure.

Plaintiff is a computer technology computer …

Employer Petitions U.S. Supreme Court to Resolve Computer Fraud and Abuse Act Circuit Split

Posted in Computer Fraud, Computer Fraud and Abuse Act, Data Theft, Practice & Procedure

By Robert Milligan and Joshua Salinas

As anticipated, the issue regarding the application of the Computer Fraud and Abuse Act (“CFAA”) against employees who violate their employer’s computer use policies and steal valuable company data may be headed to the U.S. Supreme Court. Last week, WEC Carolina Energy Solutions LLC (“WEC”) filed a petition for writ of certiorari before the …

“Click Fraud” Allegations Found Insufficient Under Computer Fraud and Abuse Act, But Personal Jurisdiction Found Where Defendant Company’s Website Deliberately Targeted Consumers Within the Forum State

Posted in Computer Fraud and Abuse Act, Unfair Competition

By Joshua Salinas and Jessica Mendelson

A federal district court for the Northern District of California recently held in a “competitor click fraud” case that a mere assertion of a violation of the Computer Fraud and Abuse Act claim without sufficient factual details regarding any inside or outside “hacking” is insufficient to establish subject matter jurisdiction over the action. (…

California Federal District Court Distinguishes Ninth Circuit’s Nosal Decision and Finds that Computer Fraud and Abuse Act Claims Are Available for Violations of Employers’ “Access” Restrictions

Posted in Computer Fraud and Abuse Act

On June 19, 2012, a district court for the Northern District of California distinguished the Ninth Circuit’s recent U.S. v. Nosal decision and allowed an employer to bring a claim under the Computer Fraud and Abuse Act (“CFAA”) against a former employee for alleged violations of a verbal computer access restriction. (Weingand v. Harland Financial Solutions, 2012 U.S. …

Solar Panel Rivals In Trade Secret and Data Theft Spat In California Federal Court

Posted in Computer Fraud and Abuse Act

By Jessica Mendelson

On February 13, SunPower Corporation, a manufacturer of solar panels, sued five former employees, as well as its rival, SolarCity Corporation in federal court in San Francisco, California and sought a temporary restraining order against the defendants. SunPower asserted claims of unfair competition, trade secret misappropriation, and violations of the Computer Fraud and Abuse Act (“CFAA”), as well …

Dead Again? Use of Computer Fraud and Abuse Act By Employers To Combat Employee Data Theft Limited By Ninth Circuit’s Latest Ruling

Posted in Computer Fraud and Abuse Act

The Ninth Circuit Court of Appeals ordered that U.S. v. Nosal be reheard en banc by all of the Appeals Court judges and that the “three-judge panel opinion [in U.S. v. Nosal, 642 F.3d 781 (9th Cir. 2011)] shall not be cited as precedent by or to any court of the Ninth Circuit.”

Accordingly, the ability of employers to …

Outside Counsel Fees May Be a Qualified Loss to Meet the CFAA’s $5000 Jurisdictional Requirement

Posted in Computer Fraud and Abuse Act

By David Monachino

The Computer Fraud and Abuse Act (“CFAA”) requires, among other things, that a plaintiff demonstrate a “loss” of $5,000 or more. See 18 U.S.C. § 1030(c)(4)(A)(i)(I).

In Animators at Law, Inc. v. Capital Legal Solutions, LLC, et al., Case No. 10-CV-1341 E.D.Va. (May 10, 2011) (unpublished) (TSE) two former employees of Animators’ abruptly left to join a competitor. Shortly thereafter, …

Computer Fraud and Abuse Act Remains Viable Claim For Employers To Assert Against Employees Who Steal Company Data

Posted in Computer Fraud and Abuse Act

By Robert Milligan and Joshua Salinas

The Computer Fraud and Abuse Act (“CFAA”) remains a potent weapon for employers to use against disgruntled employees who steal company data. The Sixth Circuit in U.S. v. Batti, No. 09-2050, 2011 WL 111745 (6th Cir. 2011)recently upheld the criminal conviction of an employee who allegedly accessed, copied, and leaked confidential information that …

Brekka decision continues to get press attention

Posted in Computer Fraud and Abuse Act

Amy E. Bivins recently published another article in the Daily Labor Report addressing the effects of the Ninth Circuit’s Brekka decision, which we have posted about previously.  Ms. Bivins quotes Seyfarth attorney Carolyn Sieve on the issue.  Carolyn reminded employers that they "should not rely solely on a potential CFAA claim to protect their proprietary information."  Indeed, employers will …