Thursday, February 12, 2009

Traverse Internet Law Federal Court Report: January 2009 Hacking Lawsuits


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.