A New York trial court announced a decision on February 21, 2014, that may be a harbinger of wide-reaching limitations on insurance coverage for data breaches under commercial general liability (CGL) policies. The court’s ruling, while subject to appeal, demonstrates the hazards of relying on traditional CGL policies for coverage for data breaches. The lawsuit, Zurich… Read More
Although headlines have focused on foreign cyberattacks, plenty are U.S.-based—and can be remedied. Over the past year the national press has repeatedly reported on the vulnerability of our intellectual property to nation-state hackers like China, which have reportedly accessed and stolen highly confidential data by entering computer systems through public websites. Lost in the headlines… Read More
In all jurisdictions the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. 1030, the federal computer crime statute, applies to former employees who steal data from the company computer, but in two federal circuits it does not apply when the theft occurs during employment. The difference in jurisdictions is significant to employers because the CFAA provides a civil remedy for damages and injunctive relief for a company that “suffers damage or loss” by reason of a violation of the CFAA. 18 U.S.C. 1030(g).
Last year the U.S. Court of Appeals for the Ninth Circuit in U.S. v. Nosal, 676 F.3d 854 (9th Cir. 2012), disagreed with certain of its sister circuits and narrowly interpret-ed what it means to access the company computer “without authorization,” effec-tively eliminating a company’s ability in that jurisdiction to use the CFAA against current employees. This column will review the conflicting interpretations of the CFAA that distinguishes between current and former employees and the strategies and options companies can employ to navigate this conflict.
At issue is whether the Computer Fraud and Abuse Act applies to data theft by employees; the circuits are split. BY Nick Akerman On July 26, the U.S. Court of Appeals for the Fourth Circuit became the first circuit to adopt the Ninth Circuit’s holding in U.S. v. Nosal, 676 F.3d 854 (9th Cir. 2012),… Read More
By: Gary Gansle, Jessica Linehan, and Kurt Whitman Addressing a recent hot topic regarding the forced disclosure of social media passwords and/or content as part of the employment application process, California has promptly resolved the issue legislatively. Effective January 1, 2013, employers in California are generally prohibited from requiring applicants and employees to disclose or… Read More
In a surprising decision early in July, in the case of UsedSoft GmbH v. Oracle International, the highest court in Europe, at the stroke of the pen, has re-written the basic rules of the game relating to the distribution of software in the European Union. In a word, the European Court of Justice (“ECJ”) held… Read More
Yesterday the 9th Circuit Court of Appeals issued an opinion holding that limiting an employee’s access to the company computers solely for business purposes, i.e. not stealing the data for a competitor, cannot be the predicate for a violation of the federal computer crime statute, the Computer Fraud and Abuse Act (“CFAA”), Title 18, U.S. C. § 1030. U.S. v. Nosal, 2012 WL 1176119 (9th Cir. April 10, 2012). The CFAA makes it a crime in various instances to access a computer “without authorization” or to have “exceeded authorized access” to obtain information from the computer and permits those, including companies, who are victims of violations of the statute to bring a civil action against the perpetrators. Acknowledging that its decision conflicts with the 5th, 7th and 11th Circuits, there is a good chance the Supreme Court will have the final say on this issue if the Department of Justice decides to appeal. As the dissent pointed out, this decision is counter to the common sense notion that a “bank teller is entitled to access a bank’s money for legitimate purposes, but not to take the bank’s money for himself.”
Have your client companies’ policies kept
pace with changes in the law affecting
computer technology? New statutes and court
decisions relating to computer technology
affect every business. Many companies
overlook opportunities to respond to these
new laws by adopting robust policies to
take advantage of the protections they
afford and to minimize the risks they pose.
This article will review three critical areas
of computer technology that should be
addressed by company policies: theft of data,
social networking and cloud computing.
This article was first published on IRMI.com and is reproduced with permission. Copyright 2012, International Risk Management Institute, Inc As breaches continue to occur and affected organizations determine whether and how to disclose these breaches, breaches and disclosure continue to be the subject of reports as well as media, legislative, and regulatory attention. See, for… Read More