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Computer Fraud and Abuse Act: Unauthorized Access

Under what circumstances can an employee, having accessed a computer via means provided by an employer, be civilly liable to the employer under the Computer Fraud and Abuse Act for “unauthorized access” of the computer?  Courts are split on this question, as well as the standard for when an employee “exceeds authorized access” under the CFAA.  As two recent cases demonstrate, depending on the facts, and depending on the jurisdiction, an employer may have a cause of action under the CFAA when a rogue employee abuses the employer’s computer systems. Section (a)(2)(C): “exceeds authorized access” Section (a)(2)(C) of the CFAA imposes liability on anyone who “intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains . . . information from any protected computer.”  Section (a)(6) of the CFAA defines “exceeds authorized access” to mean “to access a computer with authorization and to use such access to obtain…

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Case Note: Reverse Engineering and Trade Secret Misappropriation

Reverse engineering of a proprietary computer program is not necessarily, and in this case was not, a misappropriation of trade secrets.  Aqua Connect, Inc. v. Code Rebel LLC, 2012 U.S. Dist. LEXIS 17962, No. CV 11-5764-RSWL (C.D. Cal. Feb 13, 2012). Facts In the words of the court: Plaintiff alleges that Movants downloaded a trial version of Plaintiff’s Aqua Connect Terminal Server software (“ACTS”) and subsequently reverse engineered ACTS in violation of the End User License Agreement (“EULA”), which Movants had to agree to in order to use the trial version of ACTS. Plaintiff alleges that Movants misappropriated the trade secrets within ACTS and used that information to create and distribute a competing  software product. Procedural Posture Defendant brought a motion to dismiss for failure to state a claim based on Federal Rule of Civil Procedure 12(b)(6). Result The court found that the plaintiff had “only pled that Movants acquired…

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Patentable Subject Matter: New Federal Circuit Case

Yet another post-Bilski pronouncement: the Federal Circuit has held that patent claims directed to “an investment tool designed to enable property owners to buy and sell properties without incurring tax liability” do not recite patentable subject matter under 35 U.S.C.  § 101.  Fort Properties v. American Master Lease, No. 2009-1242 (February 27, 2012). Background United States Patent No. 6,292,788 recites a method for taking advantage of exceptions to taxes on real estate transactions.  For example, independent claim 1 recites: A method of creating a real estate investment instrument adapted for performing tax-deferred exchanges comprising: aggregating real property to form a real estate portfolio; encumbering the property in the real estate portfolio with a master agreement; and creating a plurality of deedshares by dividing title in the real estate portfolio into a plurality of tenant-in-common deeds of at least one predetermined denomination, each of the plurality of deedshares subject to a…

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Computer Fraud and Abuse Act: Civil Rights of Action Have an Uncertain Bar

Federal district courts have been split, and the courts of appeals thus far silent, on what allegation of “loss” a plaintiff must make to state a case under the Computer Fraud and Abuse Act.  18 U.S.C. § 1030.  The CFAA, a criminal statute barring unauthorized access of specified categories of computers, provides for a civil right of action for “[a]ny person who suffers damage or loss by reason of a violation of” the Act.  18 U.S.C. § 1030(g).  Thus, a claim under the CFAA can be a nice adjunct to many other causes of action, such as claims for copyright infringement and trade secret misappropriation.  However, at least two recent cases illustrate that the bar for plaintiffs under the CFAA is uncertain. Plaintiffs sometimes cannot plead or prove “damage” under the CFAA’s definition of that term.  18 U.S.C. § 1030(e)(8) (“Damage means any impairment to the integrity or availability of…

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Detroit Patent Office to Cover Software

Detroit is excited about the branch office of the United States Patent and Trademark Office opening downtown in July.  And with good reason.  Moreover, based on the USPTO’s recent job posting for people with computer backgrounds to serve as administrative law judges in Detroit, it appears that the Detroit Patent Office will go beyond the traditional mechanical and electrical disciplines usually associated with the auto industry.  True, that is where the USPTO is focused in hiring patent examiners for the new Detroit office, but Michigan has high tech companies of every stripe, pursuing all sorts of technological innovations.  And the auto industry itself is producing some amazing software innovations.  It is encouraging to see the USPTO’s actions reflect these facts.

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