Traverse Internet Law Federal Court Report: October 2011 - 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.

CONTROL SYSTEMS, INC. v. REALIZED SOLUTIONS, INC., ET AL.
DISTRICT OF CONNECTICUT (NEW HAVEN)
3:11-CV01423
FILED: 9/15/2011

With respect to hacking, the Defendants are alleged to have accessed the computer of the Plaintiffs without authorization. This type of allegation is the basis for “hacking” claims in civil, as well as criminal, prosecutions.

The Plaintiff owns a unique software program that allows parking facility owners and operators the ability to manage, control and report via wireless handheld computers all revenue and customer service transactions. The Defendants, after being employed by the Plaintiff, have allegedly breached their fiduciary duty by surreptitiously setting up a new competing business using the source code, trade secrets and confidential information of CSI.

Allegations in the lawsuit include copyright infringement, breach of contract, breach of fiduciary duty, violation of the Computer Fraud and Abuse Act, violation of the Connecticut Computer Crimes Statutes and violation of the Connecticut Uniform Trade Secrets Act. Plaintiff’s prayer for relief requests preliminary and permanent injunctive relief, compensatory damages, attorneys’ fees and such other and further relief as the Court deems appropriate. Traverse Internet Law Federal Court Report Cross-Reference Number 1527.

Traverse Internet Law Federal Court Report: September 2011 - 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.


NATHAN E. BLAIR and CEBERUS ONLINE GAMES, LLC v. CHARLES ADKINS
NORTHERN DISTRICT OF GEORGIA (ATLANTA)
1:11:CV-02555
FILED 8/3/2011

Be very careful about the contractors you use. This alleged “high jacking” is not unusual.

The Plaintiffs are the owners and developers of a multiplayer online videogame. The Defendant is a developer who is alleged to have modified files in Plaintiffs’ game with malicious computer code and subsequently “high jacked” all of the traffic leading to Plaintiffs’ website.

Allegations in the lawsuit include violation of the Computer Fraud and Abuse Act, unfair competition, violation of the Georgia Computer Systems Protection Act, breach of contract, conversion, and unjust enrichment. The prayer for relief includes requests for permanent injunctive relief, punitive damages, actual and consequential damages, an accounting and disgorgement of Defendant’s revenue, attorneys’ fees, and such other and further relief the Court deems just and proper. Traverse Internet Law Federal Court Report Cross-Reference Number 1523.

Traverse Internet Law Federal Court Report: July 2011 - 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.


SQUARE ENIX LIMITED v. JOHN DOES 1-15
WESTERN DIVISION OF WASHINGTON (SEATTLE)
2:11-CV-01045
FILED: 6/22/2011

Anytime you use someone else’s password and access a computer you are likely violating the Computer Fraud and Abuse Act or local computer crime statutes. These are typically criminal and civil in nature. Don’t use someone else’s password or log-in information to get into a program or on to a website.

The Plaintiff is a UK company developing and distributing home video game computer programs. The Defendants are alleged to have logged into the restrictive account hosting the game preview and copied the game preview from the server and distributed it to other Defendants and third parties using peer to peer file sharing protocol.

Allegations in the lawsuit include copyright infringement and violation of the Computer Fraud and Abuse Act. The prayer for relief includes requests for preliminary and permanent injunctive relief, actual damages, statutory damages, and reasonable attorneys’ fees and costs. Traverse Internet Law Federal Court Report Cross-Reference Number 1508.

Traverse Internet Law Federal Court Report: May 2011 - 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.

XEROX CORPORATION v. JOHN DOES
DISTRICT OF CONNECTICUT (NEW HAVEN)
3:11-CV-00590
FILED: 4/14/2011

This is the first time I’ve seen a hacking case brought based upon access to computers not owned or controlled by the Plaintiff. A recent 9th circuit decision has extended the application of this hacking law and it is now being applied very broadly to include authorized access to a computer based upon subsequent unauthorized use of the information obtained. This lawsuit and the recent court decision show a tendency to expand protections.

The Defendants are alleged to have impersonated a Xerox executive by creating a Gmail and Facebook account in his name and then using the Gmail account to spam. The violation of the Computer Fraud and Abuse Act is alleged to rise from the Defendants’ access of a third party’s computer system, namely Google and Facebook.

The law suit alleges violation of the Computer Fraud and Abuse Act, violation of the Lanham Act, violation of the Connecticut Computer Crimes Statutes, and trespass to chattels. Plaintiff requests temporary, preliminary, and permanent injunctive relief against the Defendants along with compensatory damages, actual damages, costs, statutory damage, punitive damages, exemplary damages, and any additional relief the Court deems just and proper. Traverse Internet Law Cross-Reference Number 1487.

Traverse Internet Law Federal Court Report: March 2011 - 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.


NACCO MATERIALS HANDLING GROUP, INC. d/b/a YALE MATERIALS HANDLING CORPORATION v. THE LILLY COMPANY
EASTERN DISTRICT OF NORTH CAROLINA
4:11-CV-00028
FILED: 2/22/11

The use of a password to get access to a competitor’s private resource area is typically characterized as “hacking”. If the allegations are true the Defendant is exposed to a broad range of potential liabilities under the federal and state hacking laws. Make sure that your staff understands it is not permitted to use someone else’s passwords to gain access to any websites.

The Plaintiff manufactures and sells lift trucks. It maintains a dealer resource site restricted to authorized users. Lilly allegedly obtained unauthorized access to the secure dealer resource site. The Defendant is a direct competitor of the Plaintiff. The unauthorized access allegedly provided detailed specifications and trade secrets.

Plaintiff alleges violation of the Computer Fraud and Abuse Act, computer trespass, misappropriation of trade secrets, tortious interference with contract and business relations, tortious interference with prospective economic advantage, violation of the North Carolina Unfair and Deceptive Trade Practices Act, and copyright infringement. The lawsuit requests injunctive relief, destruction of infringing materials, punitive damages, actual damages, treble damages, prejudgment interest, attorneys’ fees and costs and other such relief the Court deems just and proper. Traverse Internet Law Cross-Reference Number 1477.

Traverse Internet Law Federal Court Report: February 2011 - 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.


YARDI SYSTEMS, INC. v. REALPAGE, INC. and DC CONSULTING, INC.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:11-CV-00690
FILED: 1/24/2011

If you are going to hire employees from a competitor make sure you conduct appropriate due diligence, make sure that they understand that no trade secret information or passwords of any kind can be brought with them to their new job, and have them sign a contract promising that they are not bringing with them any trade secret, confidential or proprietary information. It is also important that you find out if they have signed a non-disclosure or confidentiality agreement with their previous employer so you can assess the risk. And remember, using passwords acquired during a previous employment to now compete against a business is most likely going to be considered “hacking”.

Yardi and the Defendants compete in the sale of property management software and related services. RealPage acquired a consulting group, today known as “DC Consulting, Inc.”, which was a consulting company providing technology and software support services almost exclusively for Plaintiff’s users. Defendants have allegedly continued to access the Plaintiff’s “client central” software using stolen credentials acquired by the consulting company when it was providing services to Plaintiff’s clients.

Plaintiff alleges violation of the Federal Computer Fraud and Abuse Act, violation of the Comprehensive Computer Data Access and Fraud Act, violation of the Digital Millennium Copyright Act, copyright infringement, trade secret misappropriation, and unfair competition. The prayer for relief includes requests for preliminary and permanent injunctive relief, actual damages, statutory damages, punitive damages, prejudgment interest, and attorneys’ fees and costs. Traverse Internet Law Cross-Reference Number 1468.

Traverse Internet Law Federal Court Report: November 2010 - 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.


VITAL SOUNDS, INC. and THERAPEUTIC RESOURCES, INC. v. VISION AUDIO, INC. and WILLIAM P. MUELLER
WESTERN DSITRICT OF WISCONSIN (MADISON)
3:10-CV-00602
FILED: 10/13/2010

If you are buying email lists make sure that you understand the source of the email addresses. While CAN-SPAM does not require “opt-in” addresses, it is certainly advisable to conduct some reasonable degree of due diligence so that you are not purchasing a stolen email list.

Vital Sounds is in the business of selling audio CDs, headphones, books and other tools to teachers, therapists, and families for use in providing counseling and rehabilitative services. The Defendant is alleged to have sent emails selling audio CDs to the Plaintiffs’ confidential and proprietary mailing list. The Defendant is alleged to have hacked into Plaintiffs’ computers to obtain the list.

Plaintiff alleges trademark infringement, fraud in connection with computers, offense against computer data under Wisconsin law, and misappropriation of trade secrets. The lawsuit requests preliminary and permanent injunctive relief as well as actual damages, compensatory damages, pre-judgment and post-judgment interest, and attorneys’ fees and costs. Traverse Internet Law Cross-Reference Number 1453.

Traverse Internet Law Federal Court Report: September 2010 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.


MICAH BREDEN and FORESIGHT HOLDINGS, INC. v. TC CORRIHER IMPLEMENT COMPANY, INC., ET AL.
WESTERN DISTRICT OF NORTH CAROLINA (ASHEVILLE)
1:10-CV-00210
FILED: 9/24/2010

This whole problem arose because the retailer signed a three year contract promising to pay 4% of the costs of goods sold through its website each month in exchange for search engine optimization services. These types of agreements are fundamentally problematic because compensation to the search engine optimization service provider is not tied directly to its performance, but rather to the overall performance of the retail website irrespective of the success of the search engine optimization efforts. When you are creating these types of vendor relationship take great care in structuring an agreement that makes sense.

Plaintiff is a search engine optimization company and Defendant is a retailer that hired the Plaintiff to provide search engine optimization services for its retail website. The Defendant, or an agent, is alleged to have obtained a domain name log-in and password through unauthorized access to the Plaintiff’s computers and took possession of disputed domain names.

The lawsuit alleges copyright infringement, unfair and deceptive trade practices, and violation of the Computer Fraud and Abuse Act. Plaintiff requests that the Court grant preliminary and permanent injunctive relief along with actual damages, treble damages, interest, and any other relief the Court deems appropriate. Traverse Internet Law Cross-Reference Number 1446.

Traverse Internet Law Federal Court Report: August 2010 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.


PEARSON EDUCATION, INC. v. RAMEEZ RAZZAQ BALAGAMWALA and SAMAR R. BALAGAMWALA
SOUTHERN DISTRICT OF TEXAS (HOUSTON)
4:10-CV-03038
FILED: 8/24/2010

Don’t use other people’s passwords to gain access to any website. Today most user agreements specifically prohibit the transfer of log-in and password information to third parties and specifically prohibit a third party from accessing the site. There are state and federal civil and criminal laws that are being used today to police this type of conduct.

Pearson is the world’s leading publisher of textbooks and online educational products. The Defendants are residents of Texas who offer to complete students’ homework on Plaintiff’s website for a fee by obtaining the password from the student. This use of a student’s password is unauthorized and contrary to the rules of Plaintiff’s website and is putting at risk Plaintiff’s reputation.

The lawsuit claims violation of the Computer Fraud and Abuse Act, violation of the Texas Computer Crimes Act, trademark infringement, unfair competition, cybersquatting, tortious interference with contractual relations, and fraud. Plaintiff requests preliminary and permanent injunctive relief, transfer of Defendants’ domain names, an accounting of profits, actual damages, treble damages, statutory damages, costs, and attorneys’ fees. Traverse Internet Law Cross-Reference Number 1445.