Cybersecurity

White House Proposal: Beef Up Anti-Hacking Laws and Resolve a Circuit Split

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President Obama wants to go where the Supreme Court refused to tread.  As part of his cybersecurity and privacy initiatives, which we discussed last week, the President would strengthen the federal anti-hacking provisions of the Computer Fraud and Abuse Act (CFAA), including an expansion of activity covered by the statutory phrase “exceeds authorized access.”  In so doing, the President would resolve a circuit split between the First, Fifth, Eighth, Seventh, and Eleventh Circuits, on the one hand, and the Ninth and Fourth Circuits, on the other.  His reason?  “No foreign nation, no hacker, should be able to shut down our networks, steal our trade secrets, or invade the privacy of American families.” READ MORE →

Obama Administration Announces Cybersecurity and Privacy Initiatives

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On Monday, January 12, 2015, President Obama appeared at the Federal Trade Commission to announce the administration’s blitz of cyber security and privacy legislative and public policy initiatives, which will be discussed in greater detail in tonight’s State of the Union Address. The President’s proposals encompass a broad range of legislation, as well as collaborative efforts between the federal government and industry leaders. READ MORE →

Trade Secrets and Third Parties: Litigation Traps To Avoid

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Orrick’s Chris Ottenweller and Derek Knerr recently took to Law360 to review recent cases involving theories of third-party liability for trade secret misappropriation.  New employees are one obvious source of potential liability if they bring to the job information obtained from their prior employer. But in recent years companies have also increasingly faced suits based on relationships with contractors and vendors. Chris and Derek offer some practical considerations to help companies mitigate potential liability in the first place.

Nosal Returns to the Ninth Circuit Posing the Question: Is a Password a Sufficient “Technological Access Barrier” Under the CFAA?

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Observers following the legal issues surrounding the prosecution of David Nosal will be watching closely in 2015 as the former Korn Ferry executive returns to the Ninth Circuit to appeal his 2013 conviction on three counts of violating the Computer Fraud and Abuse Act. READ MORE →

Justice Hammers International Trade Secrets Hackers

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A recent Justice Department reorganization of its National Security Division concentrates resources on fighting state-sponsored economic espionage and corporate theft of trade secrets. These strategic changes focus on Justice’s ability to target and prosecute hackers and others who seek to damage national assets by means including economic espionage, proliferation, and cyber-based national security threats.
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The House Introduces Another Trade Secrets Bill: Is It Really Any Better Than Before?

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The Trade Secrets Act of 2014 (H.R. 5233) was introduced in the House by Congressman George Holding on July 29, 2014.  Representatives Steve Chabot (R-OH), Howard Coble (R-NC), John Conyers (D-MI), Hakeem Jeffries (D-NY), and Jerrold Nadler (D-NY), are cosponsors of the bill.

While the House Bill is very similar to the Bill introduced in the Senate on April 29, 2014 Defend Trade Secrets Act of 2014 (DTSA) (S. 2267), there are some major differences between the two.  Specifically, the House Bill is much more protective of defendants facing ex parte seizure orders. READ MORE →

Hedge Fund Hack Results in Trade Secret Loss, and Raises SEC Reporting Issues

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Data breaches may be nothing new, but they are certainly evolving into bigger and more notorious infractions. While the data breaches of yesterday may have involved accidental disclosure or disgruntled former employees, the data breaches of today are often carried out by outsiders and highly organized and sophisticated criminal groups. And hackers aren’t just after credit card information, they are often seeking proprietary information. In short: trade secrets, watch out. READ MORE →

ANOTHER WIN FOR ALEYNIKOV: Judge Tosses Evidence in Ex-Programmer’s Latest Case

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Sergey Aleynikov fought the law, and the law lost—again.

Judge Ronald A. Zweibel of the New York Supreme Court has thrown out a raft of evidence originally gathered by the FBI for federal prosecution and later offered by state authorities attempting to prosecute Aleynikov for trade secrets theft. Finding no probable cause for Aleynikov’s original arrest, the court also faulted the feds for turning evidence over to the Manhattan district attorney instead of giving it back to Aleynikov. READ MORE →

CYBER-SYMBOLISM? DOJ Announces First-Of-Its-Kind Prosecution of State Actors—But Does It Matter?

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The U.S. Justice Department has charged members of the Chinese military with allegedly engaging in economic espionage against American companies.  It’s the first time that the United States has leveled such charges against agents of a foreign country.  But with the accused in China, is this more bluster than bombshell?  Or are actual prosecutions possible?

A federal grand jury empanelled at the U.S. District Court for the Western District of Pennsylvania (where most of the target companies are located) returned an indictment against five members of a Chinese military unit in Shanghai, accusing them of conspiring to hack into the computer systems of six American companies. READ MORE →

UPDATE: BACK FROM THE DEAD: Senators Resuscitate Legislation to Create a Federal Right of Action for Trade Secret Theft

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With a powerful industrial coalition lining up behind them, two senators are trying yet again to establish a federal right of civil action for trade secret misappropriation, potentially making trade secrets an IP stepchild no more.

Sens. Chris Coons (D-Del.) and Orrin Hatch (R-Utah) introduced the Defend Trade Secrets Act of 2014 on April 29.  As we reported in February (and as picked up today by the LegalTimes), Sen. Coons was then circulating a draft; by recruiting Sen. Hatch as a co-sponsor, he can now tout the bill’s bipartisan support.  Moreover, both are members of the Senate Judiciary Committee, which might help the bill’s odds of survival. READ MORE →