Supreme Court Limits Scope of Computer Fraud and Abuse Act
It is a common story: An employee who knows he is about to leave his employer for a competitor uses his last days of computer access to download (or email himself) confidential information from his employer’s network. Once his employer discovers the misappropriation, the employee has moved on to his next job, leaving the employer scrambling to protect itself, often through a tangle of state-law tort and trade-secret claims.
Fund Managers Targeted in Sophisticated Cyberattacks
There has been a spike in 2019 of targeted cyberattacks against Asia-based fund managers, especially those in a startup phase of business. Regulators worldwide, including the Securities and Futures Commission of Hong Kong, have issued guidelines for reducing and mitigating hacking risks. This post summarizes the practical measures that may be adopted to protect your firm against cyberattacks and the keys to successful crisis management in the event that an unauthorized data breach occurs. (more…)
In an Eagerly Anticipated Decision, the Ninth Circuit Sides With Web Scrapers
For years, companies seeking to block web scrapers from collecting the information on their website would invoke the Computer Fraud and Abuse Act (CFAA), a U.S. law that criminalizes accessing a computer “without authorization.” But the U.S. Court of Appeals for the Ninth Circuit has now ruled that merely instructing scrapers that they are not welcome on a public website, either through a restrictive terms of use or a cease-and-desist letter, is probably not enough to render their access “unauthorized” under the CFAA. This decision is encouraging news for the many hedge funds, academic researchers and other data aggregators that use software bots to compile information online.
Georgia Governor Vetoes Broad-Reaching Computer Crime Bill, Highlighting Debate Around Bug Bounty Programs
On May 8, Georgia Governor Nathan Deal announced that he was vetoing Senate Bill 315 (“SB 315” or “the bill”), cybersecurity legislation that would have expanded the criminalization of “unauthorized computer access” to capture, in addition to traditional hacking, activity that opponents warned is necessary to robust private and public sector cyber defense. In his veto statement, Governor Deal commented that parts of SB 315 “have led to concerns regarding national security implications and other potential ramifications” that caused him to conclude that “while intending to protect against online breaches and hacks, SB 315 may inadvertently hinder the ability of government and private industries to do so.” (more…)
Northern District of California Enjoins LinkedIn from Preventing Scraping of Public User Profiles
In a decision that may have profound implications for social media companies, the big data industry and website terms of use everywhere, Judge Edward Chen of the Northern District of California granted hiQ Labs’ motion for preliminary injunction on August 14, 2017, enjoining LinkedIn from “preventing hiQ’s access, copying, or use of public profiles on LinkedIn’s website.” hiQ Labs, Inc. v. LinkedIn Corporation (N.D. Cal. No. 3:17-cv-03301-EMC). The case is on appeal and will be heard by the Ninth Circuit in 2018. (more…)
FBI Issues Guidance on Ransomware Response
On April 29, 2016, the FBI published an alert regarding “Incidents of Ransomware on the Rise.”
The piece provides FBI guidance on how to protect organizations, as well as the FBI’s recommendation not to pay the ransom (though in practice, they have acknowledged that it may be necessary to do so if no backup is available for essential data).
Defend Trade Secrets Act Offers a New Response to Cyber Intrusions
Companies may soon have a new way to respond to hacking. On Wednesday, April 27, the House passed the Defend Trade Secrets Act (“DTSA”) by a vote of 410-2. The bill has already been approved by the Senate and has the Obama administration’s support, which means little stands in the way of DTSA becoming law within the next week.
President Takes Action On Cybersecurity
President Obama today unveiled a “Cybersecurity National Action Plan.” The administration’s proposed budget includes $19 billion for cybersecurity spending, $3 billion of which will be devoted to updating agency systems. The plan includes the creation of a Federal Chief Information Security Officer to guide the implementation of increased security across the federal government and reside within the Office of Management and Budget. President Obama also issued two executive orders. The first establishes the Commission on Enhancing National Cybersecurity within the Department of Commerce to be composed of technology, national security, and business leaders. The Commission is charged with developing by December 1, 2016 “detailed recommendations to strengthen cybersecurity in both the public and private sectors.” The second requires the establishment of a Senior Agency Official for Privacy at each agency and creates the Federal Privacy Council as “the principal interagency forum to improve the Government privacy practices of agencies and entities acting on their behalf.” The OMB Director will be chair of the Federal Privacy Council, which will have the focus of coordinating internal agency policies.
Patient Access and Medicare Protection Act
On December 28, 2015, President Obama signed into law S. 2425, the Patient Access and Medicare Protection Act (the “Act”). In addition to provisions intended to ensure that Medicare reimbursement policies promote continued access to certain durable medical equipment, like wheelchair accessories, the Act includes provisions that affect adoption of Health Information Technology (“HIT”) and those that provide greater protection against medical identity theft. Specifically, the Act recognizes various categories of hardship exceptions from meaningful use requirements for the 2015 reporting period and strengthens the penalties associated with medical identity theft.
OFAC issues Cyber-Related Sanctions Regulations
In the aftermath of the cyber attack on the Office of Personnel Management and the significant loss of corporate intellectual property, the U.S. government has announced new tools to respond to and to deter such harmful attacks. On December 31, 2015, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued new U.S. Cyber-Related Sanctions Regulations, set forth in 31 C.F.R. § 578 (“Cyber-Related Sanctions Regulations”). The Cyber-Related Sanctions Regulations are designed to implement Executive Order 13694, which targets perpetrators of malicious cyber-activities (e.g., hacking and Distributed Denial of Service (DDoS) attacks) as well as those who support such activities and certain recipients and users of stolen trade secrets. For a more detailed discussion of E.O. 13694, which was issued by President Obama on April 1, 2015, see our previous alert.