Traverse Internet Law Federal Court Report: November 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


WARNER BROS, ENTERTAINMENT INC. v. JOHN DOES 1-10
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:09-CV-08622
FILED: 11/23/2009

It would perhaps be appropriate to point out that the abilities of hackers from all around the world have typically evolved far beyond what most of the public believes. Cyber attacks have proliferated and many in the security industry believe that World War III will be a cyber war. Keep this in mind: Most businesses are not “hacker proof”.

Unknown Defendants accessed the Warner Bros’ servers and copied images and other information that apparently related to motion pictures and television series that are entitled to copyright protection. There aren’t many details in the lawsuit as to the exact programs or motion pictures that were misappropriated or the manner in which they might have been published on the web.

The lawsuit alleges violations of the Computer Fraud and Abuse Act, violation of the California Penal Code 502, and trespass to chattels. The claim for relief includes a request for the entry of permanent injunctions prohibiting access to Warner Bros’ properties or use of infringing materials, an order requiring the return of all data obtained from Warner Bros’ servers and monetary awards of compensatory damages, statutory damages, punitive damages, prejudgment and post-judgment interest, costs and attorneys fees. Traverse Internet Law Cross-Reference Number 1382.

Traverse Internet Law Federal Court Report: October 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.

CRAIGSLIST, INC. v. TROOPAL STRATEGIES, INC., ET AL.
NORTHERN DISTRICT OF CALIFORNIA (SAN FRANCISCO)
3:09-CV-04741
FILED: 10/05/2009

CRAIGSLIST, INC. v. J.P.LAMERE, ET AL.
NORTHERN DISTRICT OF CALIFORNIA (SAN FRANCISCO)
3:09-CV-04740
FILED: 10/05/2009

CRAIGSLIST, INC. v. JOHN DOE AND CRAIGSLISTBOTPRO.COM
NORTHERN DISTRICT OF CALIFORNIA (SAN FRANCISCO)
3:09-CV-04739
FILED: 10/05/2009

CRAIGSLIST, INC. v. JOHN DOE d/b/a CLADGENIUS.COM, ET AL.
NORTHERN DISTRICT OF CALIFORNIA (SAN FRANCISCO)
3:09-CV-04737
FILED: 10/05/2009

CRAIGSLIST, INC. v. RED TRUMPET LLC AND JEFFREY H. YIP
NORTHERN DISTRICT OF CALIFORNIA (SAN FRANCISCO)
3:09-CV-04743
FILED: 10/05/2009

CRAIGSLIST, INC. v. EDDIE TEMPLE
NORTHERN DISTRICT OF CALIFORNIA (SAN JOSE)
5:09-CV-04738
FILED: 10/05/2009

We are often asked about the legality of using automated programs to interact with websites or “scrape” content. There are a long line of cases going back to the mid 1990’s that prohibit this type of access to computers if there is a prohibition communicated through a user agreement. These claims are the cyber equivalent of a trespass on someone’s land. Remember the signs that say “No Trespassing” nailed to trees? A user agreement with a prohibition against accessing a website is the virtual equivalent of a “No Trespassing” sign. And if you think you can avoid this type of liability by claiming that you did not read the user agreement, I’ve tried my fair share of criminal trespass cases earlier in my career and every defendant said: “I didn’t see the No Trespassing sign”. It never worked.

The Plaintiff, Craigslist, has sued a broad range of Defendants for using auto-posting software, programs, devices and services on the Craigslist website contrary to the user agreement. This access is the basis for a hacking claim, or better known as a “Computer Fraud and Abuse Act” claim alleging unauthorized access to Craigslist’s computer systems and services.

The lawsuits include claims for copyright infringement, violation of the Digital Millennium Copyright Act, violation of the Computer Fraud and Abuse Act, violation of California penal code 502, trademark infringement, breach of contract, inducing breach of contract, intentional interference with contractual relations, and fraud. Plaintiff requests that the Court issue extensive preliminary and permanent injunctive relief against the Defendants. Additional relief requested includes the disgorgement of profits, compensatory damages, liquidated damages, statutory damages, punitive damages, prejudgment and post-judgment interest, attorneys’ fees and costs, and any further relief the Court deems appropriate. Traverse Internet Law Cross-Reference Number 1373.

Traverse Internet Law Federal Court Report: September 2009 Hacking Lawsuits

There are no Traverse Internet Law comments for September, 2009 lawsuits on Hacking.

Traverse Internet Law Federal Court Report: August 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.

SELLING SOURCE, LLC v. RED RIVER VENTURES, LLC, ET AL.
DISTRICT OF NEVADA (LAS VEGAS)
2:09-CV-01491
FILED: 8/11/2009

This case provides us a glimpse into cyber-security and some of the techniques being used to identify, track, and ultimately pursue those accessing computers without authorization. Selling Source claims to have identified unauthorized accesses, brought in forensic computer investigators, commenced a technical investigation, and allowed the Defendants to continue alleged unauthorized access as the Plaintiff’s security personnel followed, tracked, and analyzed their activities over an extended period of time. The Plaintiff claims that “Red River Ventures” discovered the investigation by chance and at that point the cover was blown and the Plaintiff disconnected all computer access to the Defendants. Unauthorized access is a very serious matter and while the allegations in this lawsuit are merely claims that are being asserted, it is clear that the frequency and scope of computer accesses in the business world is a big problem. As a business, maintain vigilance and be prepared to react appropriately in this extremely complex environment.

The Plaintiff, Selling Source, LLC, develops technology and marketing solutions for the specialty finance and micro-loan industry. It is a “lead” marketing data source. The Defendants are alleged to have made an unsanctioned alteration to Selling Source’s proprietary software and accessed the Plaintiff’s databases without authorization for the purpose of obtaining valuable information.

The lawsuit includes claims for violation of the Computer Fraud and Abuse Act, violation of the Electronic Communications Privacy Act, trade secret misappropriation, breach of contract, and federal trademark infringement. Plaintiff requests that the Court issue temporary and permanent injunctive relief against the Defendants and require that the Defendants advise potential customers, employers, and other third parties that they provided information unlawfully obtained from the Plaintiffs. Additional relief requested includes the transfer of all documents, data programs, and information relating to Plaintiff’s proprietary, confidential, and trade secret information, restitution, compensatory damages, exemplary damages, attorneys’ fees, costs, interest, and any further relief the Court deems appropriate. Traverse Internet Law Cross-Reference Number 1353.

Traverse Internet Law Federal Court Report: July 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


METIS PRODUCTS, LLC v. JAMES PANTERA, ET AL.
SOUTHERN DISTRICT OF CALIFORNIA (SAN DIEGO)
3:09-CV-01662
FILED: 7/31/2009

What can you do with employees, officers, and executives who try to interfere with your business and launch a competing enterprise? It’s an age old problem that has become much more prominent when a few clicks of the mouse in a matter of seconds can disable your ability to function. Quick and immediate court relief is essential in these situations.

Metis Products, LLC is a San Diego based inventor and manufacturer of innovative ice packs for use with humans and horses. The Defendant Pantera is alleged to have taken all of the source files for the Metis website without authorization and posted a virtually identical website online. Defendant Pantera is alleged to have modified the Metis website so that payments were directed to his personal PayPal account without authorization. In addition, Defendant Pantera is alleged to have activated the online banking function associated with Plaintiff Metis’s bank account so that his personal email address would be used for communications associated with the Plaintiff’s bank account.

The lawsuit includes claims for violation of the Computer Fraud and Abuse Act, cybersquatting, federal trademark infringement, copyright infringement, violation of the Racketeer Influenced and Corrupt Organizations Act, unfair competition, California unfair competition, breach of contract, and conversion. Plaintiff requests that the Court issue temporary and permanent injunctive relief against the Defendants and transfer the infringing domain name to Plaintiff. Additional relief requested includes disgorgement of profits, compensatory damages, statutory damages of $100,000 per domain name, statutory damages of $150,000 per copyright infringement, actual damages in the amount of $15,300 for Defendant Pantera’s acts of conversion, punitive damages, attorneys’ fees, costs, and interest, and any further relief the Court deems appropriate. Traverse Internet Law Cross-Reference Number 1346.


OCWEN FINANCIAL CORPORATION v. JOHN T. EVANS, JR.
DISTRICT OF NEW JERSEY (CAMDEN)
1:09-CV-03197
FILED: 7/01/2009

If the allegations are true then the website operated by the Defendant is “phishing”. What’s worse than having a replica website with all of the attendant consequences on the web? Having a website that captures and harvests your customer information and uses it for spam and other nefarious purposes. Setting up an early warning system using online alerts for your trademark and business name is essential.

Ocwen is a global financial services company and alleges that the Defendant has launched a replica “Ocwen” and is soliciting and harvesting personal information from Ocwen’s customers via this allegedly phony website. The hacking claim apparently relates to unauthorized access to Ocwen’s website computer code and the subsequent copying of it.

Plaintiff has sued for violations of the Computer Fraud and Abuse Act, trademark infringement, violation of the Anticybersquatting Consumer Protection Act, common law trademark infringement, common law unfair competition, trafficking in counterfeit marks under New Jersey law, statutory unfair competition, and breach of contract. The prayer for relief includes a request for extensive injunctive relief, compensatory damages, statutory damages, punitive damages, an order to transfer the infringing domain names to Plaintiff, and any additional relief the Court deems proper. Traverse Internet Law Cross-Reference Number 1347.


IGD SYSTEMS, LLC v. GABRIELA ISTURIZ, ET AL.
WESTERN DISTRICT OF PENNSYLVANIA (PITTSBURGH)
2:09-CV-00843
FILED: 6/26/2009

There is a lot to be said for escorting key personnel from a building upon their resignation or termination. It is of course essential that access to all computers be modified immediately to preclude unauthorized access and hacking.

The Plaintiff’s primary asset is a software program that provides fully automated ebilling delivery and management systems for law firms. The Defendants were former officers of the Plaintiff’s company. Upon their resignation, the Plaintiff alleges that the Defendants surreptitiously attempted to sabotage the company’s operations and gain total control of the company. The Defendants are alleged to have logged into the administrative aspects of the software system hosted by Rackspace and modified settings.

The lawsuit includes claims for violation of the Federal Computer Fraud and Abuse Act, breach of fiduciary duty, tortious interference with contract, violation of the Uniform Trade Secrets Act, civil conspiracy, and conversion. The prayer for relief requests a declaratory order from the court that establishes IGD as the sole and exclusive owner of the software, preliminary and permanent injunctive relief, compensatory damages, remediation costs, punitive damages, and further relief the Court should deem appropriate. Traverse Internet Law Cross-Reference Number 1348.

Traverse Internet Law Federal Court Report: June 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.

MICROSOFT CORPORATION v. ERIC LAM, ET AL.
WESTERN DISTRICT OF WASHINGTON (SEATTLE)
2:09-CV-00815
FILED: 6/15/2009

If you are a business using pay-per-click advertising and don’t already understand that there is widespread click fraud occurring on a daily basis, the circumstances of this case again reiterate that there is an ongoing battle between the major search engines and click fraudsters. The bottom line is that most click fraud is not caught by the search engines and your business is likely losing money every day by a competitor clicking on one of your ads solely to run up your costs. This is the reality of pay-per-click advertising and should be factored in from a business perspective in using pay-per-click advertising. If there is a pervasive issue, and you should be reviewing your log files and other analytics to determine if such a problem might exist, then you need to do something about it.

The Plaintiff, Microsoft, is the renowned software company headquartered in Washington State. Most of the Defendants are natives of China and presently residing in Canada. The Defendants are alleged to have participated in a “pay-per-click fraud” in which they operated “click farms” and “bot nets” to repeatedly click on ads of competitors to run up the advertising cost. The Defendants are alleged to have been using click fraud to attack one specific automobile insurance advertiser and after extensive investigation, the Plaintiff alleges that all of the Defendants are carrying on an ongoing scheme to commit click fraud against targeted advertisers.

The lawsuit sets forth claims for breach of contract, breach of implied covenant of good faith, tortious interference with a business, fraudulent inducement, fraudulent misrepresentation, hacking (unauthorized access), violation of the Washington Computer Spyware Act, violation of the Washington Consumer Protection Act, civil conspiracy, and unjust enrichment. Microsoft requests an award of compensatory damages of at least $750,000.00, the entry of preliminary and permanent injunctive relief, an award of statutory damages and triple damages, a complete accounting and disgorgement of profits earned by the Defendants, and an award of Microsoft’s attorneys’ fees and costs together with interest as permitted by law. Traverse Internet Law Cross-Reference Number 1332.

Traverse Internet Law Federal Court Report: May 2009 Hacking Lawsuits

There are no Traverse Internet Law comments for May, 2009 lawsuits on Hacking.

Google Bomb, the book about online attacks and defamation, is coming September 1.

Traverse Internet Law Federal Court Report: April 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


KALEIDOSCOPE IMAGING, INC. v. DESIGNPROJECT, ET AL.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:09-CV-02421
FILED: 4/21/2009

This hacking case seems to center upon access to computers while the Defendants were still employed by the Plaintiff. Whether such access is “unauthorized”, and therefore legally actionable, is going to depend upon the facts of each situation. If you have authorization to access a software program it is likely an “unauthorized access” or “hacking” claim is going to fail. However, if you have access to a computer but do not have specific authorization to enter into a particular software program, you may not have authorization and such access could be “hacking”. The courts have not dealt with this issue extensively, but as an employer you are well advised to make the bounds of access to your software programs crystal clear and unambiguous.

Kaleidoscope Imaging is a service company that appears to operate as somewhat of an ad agency using state of the art digital technology. The Defendants are former employees of Kaleidoscope and left to begin their own competing business. Both businesses appear to specialize in “product design”. The Plaintiff claims that the Defendants accessed Kaleidoscope’s protected computer system and copied confidential and proprietary information, trade secrets, and other valuable property without authorization.

The lawsuit alleges violations of the Computer Fraud and Abuse Act, trademark infringement, breach of fiduciary duties, unjust enrichment, conversion, trespass to channel, misappropriation of trade secrets, tortious interference with expectancy, tortious interference with contract, breach of contract, fraud, and civil conspiracy. The claim for relief includes a request for the entry of temporary and permanent injunctions prohibiting the use of the information and a monetary award of compensatory damages, punitive damages, costs and attorneys fees. Traverse Internet Law Cross-Reference Number 1311.

Traverse Internet Law Federal Court Report: March 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


INFIELD PARKING, LLC v. FAN1ST, ET AL.
DISTRICT OF CONNETICUT (NEW HAVEN)
3:09-CV-00376
FILED: 3/09/2009

In this case the Defendants are alleged to have, in effect, hijacked the Plaintiff’s website and maintained it under its own name while terminating all Internet access by the Plaintiff. These types of situations are often extremely complicated in terms of the rights, responsibilities, and obligations of the parties. While giving up a percentage of a business is an occasionally attractive option when an online website is launching, it is extremely high risk and if the website becomes highly successful expect to have these types of problems. The best advice is to avoid “equity partnership” type deals with key service providers.

The Plaintiff is the owner and provider of an online social networking interactive website. Defendants are individuals who are running a competing website but originally started out as the webhost and in a technical support capacity for the Plaintiff’s website. The services were provided and exchanged for a 5 percent equity stake in the Plaintiff’s business. The lawsuit alleges that the Defendants unlawfully and without authorization terminated Internet access to the Plaintiff’s website and thereafter refused to allow the Plaintiff to access its own proprietary data and computer systems.

The lawsuit alleges trademark and trade dress infringement, trespass, trespass to channel, intentional interference with contract, breach of contract, violation of the Federal Computer Fraud and Abuse Act, and violation of a state of Connecticut computer crime statute. The prayer for relief includes a request for the entry of preliminary and permanent injunction, an award against the Defendants for actual damages, compensatory damages, punitive damages, interest, cost, and attorneys’ fees. Traverse Internet Law Cross-Reference Number 1304.

Traverse Internet Law Federal Court Report: February 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


UNIVERSAL ELECTRONICS INC. v. WARREN COMMUNICATIONS NEWS, INC.
CENTRAL DISTRICT OF CALIFORNIA (SANTA ANA)
8:09-CV-00207
FILED: 2/19/2009

This case appears to me to be a classic example of a preemptive strike. It appears that the Defendant is claiming copyright infringement by the Plaintiff. The Plaintiff’s allegations under the Computer Fraud and Abuse Act, which is the federal hacking statute, seem to relate to relatively widespread practices of data tracking and extraction of information for “e-havioral” purposes. This is a hot area for litigation.

Universal Electronics is an industry leader in the design, development, and manufacture of remote control technology. Defendant Warren Communications News, Inc. publishes news on the telecommunications, broadcasting, Internet, and consumer electronic industries. The Plaintiff alleges that it subscribed to emails sent by the Defendant and the Defendant embedded tracking and intercepting code into each email. Plaintiff then explains that it included embedded automated devices used to extract information from the Plaintiff’s computers after the email was opened and the programs automatically installed.

Plaintiff has sued for a violation of the Computer Fraud and Abuse Act, violation of the Stored Communications Act, Computer Data Access and Fraud Act, California computer data access and fraud violations, California Business and Professions Code violations, California common law invasion of privacy, and trespass to channels. Interestingly, the Plaintiff also sues for declaratory judgment that it is not infringing on the copyright of the Defendant. In addition to the declaratory judgment and injunctive relief, Plaintiff requests an award of compensatory and punitive damages, and an award of attorneys’ fees and costs. Traverse Internet Law Cross-Reference Number 1291.

Traverse Internet Law Federal Court Report: January 2009 Hacking Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


THE FINANCIAL TIMES LIMITED v. THE BLACKSTONE GROUP, L.P. AND JOHN DOES 1-100
SOUTHERN DISTRICT OF NEW YORK (FOLEY SQUARE)
1:09-CV-00783
FILED: 1/28/2009

How often do you sign up for an individual license to use a website and then “loan” your login and password to someone else? In many instances this will be considered “hacking”.

The Financial Times is a United Kingdom corporation and is one of the world’s leading business news organizations. Defendant Blackstone is a major global financial organization with its partnership interest units publicly traded on the New York stock exchange. The Plaintiff alleges that beginning in 2002 a senior employee of the Defendant authorized the initiation and repeated renewal of an individual, personal subscription to its news reporting services. In effect, according to the Plaintiff the Defendant delivered the password and login to many individual’s within the Defendant’s organization and violated the license agreement.

The causes of action include copyright infringement and violation of the Computer Fraud and Abuse Act (hacking). The prayer for relief of the Plaintiff requests the entry of compensatory damages, actual damages, Defendant’s profits, statutory damages, an award of attorneys’ fees and costs, and the entry of a preliminary and permanent injunction prohibiting further unauthorized access. Traverse Internet Law Cross-Reference Number 1276.


MOLETECH GLOBAL HONG KONG LTD v. POJERY TRADING CO AND POTTERY TRADING USA
NORTHERN DISTRICT OF CALIFORNIA (OAKLAND)
4:09-CV-00027
FILED: 1/05/2009

The Computer Fraud and Abuse Act is becoming a very popular vehicle for alleging misconduct relating to computers. If you are a webhost you need to be particularly careful with respect to terminating and concluding a business relationship. If you are a website owner you need to make sure that there are specific provisions within a contract for migrating websites upon the conclusion of a relationship to a vendor of choice. This is unfortunately a relatively common issue and the ability to make a ready exit without having to pay exorbitant fees depends upon a well drafted website hosting agreement.

The Plaintiff is a corporation organized and incorporated under the laws of Hong Kong involved in the printing and ceramics business. The Defendants compete with the Plaintiff. A business dispute ensued with a U.S. distributor who was allegedly responsible for maintaining the Plaintiff’s U.S. website. The Defendants disabled the website and replaced it with a “under construction” page.

The lawsuit alleges a violation of the Computer Fraud and Abuse Act (hacking), violation of the Electronic Communications Privacy Act, copyright infringement, breach of contract, unfair competition under California state law, common law unfair competition, intentional interference with prospective economic relations, and negligent interference with prospective economic relations. The court is requested to enter a judgment for compensatory, punitive, and treble (triple) damages, as well as preliminary and permanent injunctive relief and a declaratory judgment that the Plaintiff has not breached any agreement with the Defendants. Traverse Internet Law Cross-Reference Number 1277.


CASSETICA SOFTWARE, INC. v. COMPUTER SCIENCE CORPORATION
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:09-CV-00003
FILED: 1/02/2009

While this case looks like a straightforward copyright infringement matter in which a party licensing software has exceeded the authorized scope of use, the hacking statute is used because the Plaintiff alleges that the Defendant unlawfully accessed its computers when it downloaded the software without a proper license agreement. This is the proper statute to alleged unauthorized access of a computer. It is very easy to get caught up in accessing a computer without authorization, particularly in light of recent interpretations of the law as they relate to violating website user agreements, and having a claim of “hacking” asserted against your business carries with it repercussions beyond the lawsuit itself. Be particularly careful when accessing websites to make sure you are following the terms of user agreements.

Plaintiff is in the business of creating and developing software products and selling the license and rights to computer users. Defendant is in the business of providing information technology and business services to both public and private entities. Plaintiff alleges that since 2002 the Defendant has been illegally distributing copies of its program to its subsidiary corporations in violation of an “enterprise agreement” that did not give consent for the Defendant to use software with its subsidiaries.

The lawsuit includes a claim for copyright infringement, common law copyright infringement, breach of contract, violation of the Computer Fraud and Abuse Act (hacking), conversion, trespass to chattels, and unjust enrichment. The Plaintiff requests injunctive relief, approximately $500,000.00 in compensatory damages, its attorneys’ fees, interest and costs. Traverse Internet Law Cross-Reference Number 1278.

Traverse Internet Law Federal Court Report: December 2008 Hacking Lawsuits

There are no Traverse Internet Law comments for December, 2008 lawsuits on Hacking.