Friday, April 29, 2011

9th Circuit decision on "exceeds authorized access" in criminal Computer Fraud and Abuse Act case

Yesterday the 9th Circuit (in a 2-1 decision) held that a criminal defendant "exceeded authorized access," as set forth in the Computer Fraud and Abuse Act, 18 U.S.C. 1030 et seq., when he or she "violates the employer's computer access restrictions--including use restrictions." Does that sound pretty broad to you? Sounds that way to me.

And it sounds that way to others, too. If you ever "Google" anything at work, I commend this blog post in The Volokh Conspiracy (a blog run by a group of (mostly) libertarian law professors) on this recent 9th Circuit decision (United States v. Nosal, No. 10-10038, (Apr. 28, 2011)). It has been my experience almost every civil action for trade secret misappropriation in the last ten years (and lots of other IP and employment cases) potentially implicate the CFAA one way or another, and this is yet another decision -- others are discussed in the opinion -- that shows just how broadly the criminal provisions of the Act can be read.

Thursday, April 21, 2011

4th Circuit Applies eBay v. MercExchange Injunction Standard to False Advertising Case

Yesterday the 4th Circuit affirmed a $13.5 million jury verdict and a permanent injunction against Mead Johnson for false advertising about a competitor’s infant formula. In so doing, the court in PBM Prod., LLC v. Mead Johnson & Co., No. 10-1421 (4th Cir. Apr. 20, 2011), applied the injunction standard set forth in the Supreme Court’s patent law decision in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), and held that PBM had introduced sufficient evidence of irreparable harm. The court pointed “primarily” to survey evidence that Mead Johnson’s statements actually misled survey participants. Secondarily, the court noted that damage to “goodwill” and “reputation” also support a finding of irreparable harm. (Of course, this latter basis seems to comes pretty close to the sort of presumption or universal rule rejected by the eBay court.)

The 4th Circuit also held that evidence that a false advertising plaintiff had previously sued the defendant for false advertising is relevant to the defendant’s “intent in making its misleading claims” in the later case, which in turn could relieve the plaintiff of the burden of showing that the defendant’s impliedly misleading claims actually confused people.

Tuesday, April 05, 2011

5th Circuit: combination of things in public domain COULD be a trade secret if combination is secret

In Tewari De-Ox Sys., Inc. v. Mountain States/Rosen, L.L.C., No. 10-50137 (5th Cir. Apr. 5, 2011), the Fifth Circuit reversed summary judgment for the defendant in a trade secret case under Texas law. The district court had held that the plaintiff could not prove that its alleged packaging process -- designed to retard meat spoilage -- was a secret, because the various steps or components of the process were either previously disclosed in plaintiff's prior patent application or in the public domain. Reversing, the Fifth Circuit held that disclosure of all the components of a process does not necessarily preclude trade secret status IF the alleged combination of the components is both unique and a secret. The Court discussed other issues, too, but this was the most important bit.