Workers did not exceed authorization when data stolen, says appeals court

Ninth Circuit offers unique take on Computer Fraud and Abuse Act

By Jaikumar Vijayan

Computerworld - In a somewhat startling decision, the U.S. Court of Appeals for the Ninth Circuit last week ruled that several employees at an executive recruitment firm did not exceed their authorized access to their company's database when they logged into the system and stole confidential data from it.

In a 22-page ruling, the appellate court held that an employee with valid access to corporate data cannot be held liable under the federal Computer Fraud and Abuse Act (CFAA) if they then misuse or misappropriate the data.

"The CFAA expressly prohibits improper 'access' of computer information," chief judge Alex Kozinski wrote in the court's majority opinion. "It does not prohibit misuse or misappropriation," he wrote. The term "exceed authorized access" under the CFAA applies specifically to external hackers and violations of "restrictions on access to information, and not restrictions on its use," Kozinski held.

The appellate court's decision affirms a previous ruling made by the U.S. District Court for the Northern District of California. The government must now decide if it wants to take the case all the way to the U.S. Supreme Court.

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Skydive Arizona, Inc. v. Quattrocchi

Skydive Arizona owns and operates one of the largest skydiving centers in the world. Defendants Butler, Quattrocchi, Atlanta SC, Inc., CASC, Inc., and IGOVincent, Inc. (collectively, SKYRIDE) operate an Internet and telephone-based advertising service, making skydiving arrangements for customers, and issuing certificates that can be redeemed at various drop zones around the country. Skydive Arizona sued SKYRIDE for false advertising, trademark infringement and cybersquatting. Following partial summary judgment and a trial, a jury awarded Skydive Arizona $1 million in actual damages for false advertising, $2.5 million in actual damages for trademark infringement, $2,500,004 in profits resulting from the trademark infringement, and $600,000 for statutory cybersquatting damages. The district court denied SKYRIDE’s motions to reduce the jury verdict, for judgment notwithstanding the verdict, for remittitur, and for a new trial, and instead doubled Skydive Arizona’s $1 million actual damages award for false advertising and $2.5 million award for trademark infringement. The final judgment totaled $600,000 in statutory damages, $7 million in enhanced actual damages, and $2,500,004 in disgorged profits, plus attorney fees. The district court also entered a permanent injunction against SKYRIDE’s operations in Arizona. SKYRIDE now appeals the district court’s grant of partial summary judgment, the jury’s actual damages and profits awards, and the district court’s damages enhancement. Skydive Arizona cross-appeals the district court’s limitation of the permanent injunction to Arizona, and seeks a nationwide injunction against SKYRIDE. We have jurisdiction under 28 U.S.C. § 1291, and we affirm as to all claims, except for the doubling of actual damages.

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Skype hit with lawsuit: Reports

Just days after an outage crippled Skype, the popular Internet calling company has been slapped with a lawsuit, according to news reports Monday.

Gradient Enterprises has filed a patent infringement suit against Skype in a New York court related to U.S. patent no. 7,669,207, or its “supernode network,” according to TechCrunch.

Gradient first filed an application for the patent in 2004 and it was issued this past February, the tech blog reports.

Skype's massive blackout that cut off voice and video calls to tens of millions of users worldwide just before the busy holiday weekend may have sparked the suit.

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Tiffany v. eBay Tossed Out at High Court

by Lee Ross | November 29, 2010

If you're thinking of buying Tiffany jewelry on eBay you might want to know there's a good chance the diamond ring or silver necklace you're looking at is fake. Tiffany knows it. And so does eBay. But that fact apparently didn't sway the Supreme Court which Monday decided against hearing arguments in a dispute over eBay's obligation to stop online auctions of bogus Tiffany jewelry.

The nearly two-century old retailer claims eBay violates federal trademark law by allowing its merchandise to be sold even with the knowledge that many items are illegitimate.

Lower courts have sided with the online marketplace powerhouse concluding that Supreme Court precedents only require eBay to remove listings it specifically knows is auctioning bogus merchandise. Judges have determined that a generalized knowledge of impropriety is insufficient. Monday's high court decision effectively affirms that judgment.

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Bill Would Give Justice Department Power to Shutter Piracy Sites Worldwide

By David Kravets

Lawmakers introduced legislation Monday that would let the Justice Department seek U.S. court orders against piracy websites anywhere in the world, and shut them down through the sites’ domain registration. The bipartisan legislation, dubbed the Combating Online Infringement and Counterfeits Act, amounts to the Holy Grail of intellectual-property enforcement. The recording industry and movie studios have been clamoring for such a capability since the George W. Bush administration. If passed, the Justice Department could ask a federal court for an injunction that would order a U.S. domain registrar or registry to stop resolving an infringing site’s domain name, so that visitors to PirateBay.org, for example, would an error.

“In today’s global economy the internet has become the glue of international commerce –- connecting consumers with a wide array of products and services worldwide,” said Sen. Orin Hatch (R-Utah) in a statement announcing the bill. “But it’s also become a tool for online thieves to sell counterfeit and pirated goods, making hundreds of millions of dollars off of stolen American intellectual property.”

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Copyright office leader balks at Google deal

WASHINGTON - The head of the U.S. Copyright Office has serious concerns with a class-action settlement that would grant Google the digital rights to millions of books that are no longer being published.

Marybeth Peters, the Register of the Copyright Office, told a congressional committee Thursday that she believes parts of the proposed settlement are "fundamentally at odds with the law." She also warned the House Judiciary Committee that the agreement would jeopardize Congress' ability to govern book copyrights.

The copyright office's misgivings are just the latest doubts being cast about the legality of a settlement Google reached with U.S. authors and publishers 10 months ago.

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