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fidential user name and password, is an impairment whether federal legislation preempts state law. How-
that states a claim under the CFAA.326 ever, in Bansal v. Russ,330 a federal court in Pennsyl-
vania held that the Federal SCA did not preempt Penn-
Guidance Number 15 sylvania's Wiretapping and Electronic Surveillance
The ECPA, although a criminal statute, also creates a Control Act that prohibits unlawful access to stored
cause of action for damages and other relief against communications.331
electronic trespassers. The ECPA through the federal Claims under state law also may be challenged on
Wiretap Act and the SCA seeks to protect against unau- the basis of the "dormant commerce clause" doctrine. As
thorized electronic intercepts of communications or the explained in one article, "[t]he dormant Commerce
accessing of stored communications and records. The Clause is preoccupied with state economic protection-
SCA prohibits unauthorized access to information, not ism. ...[T]he Supreme Court has applied a virtually
the misappropriation or disclosure of the information. fatal form of strict scrutiny to state laws that discrimi-
Information stored in a server and conveyed from a pri- nate against interstate commerce and a more forgiving
vate Web site to users is subject to the SCA. The CFAA balancing test that practically rubber-stamps other
applies, inter alia, to damage caused by unauthorized laws that only incidentally affect interstate com-
access or access in excess of authorization to a computer merce."332 However, usually dormant commerce clause
system when the conduct involves an interstate or for- challenges are made to state legislation rather than
eign communication. Violations of a license with respect state common law claims.333
to an online database or of a subscription agreement In Crowley v. Cybersource Corporation,334 in which
may subject a violator to a claim under the CFAA. the plaintiff brought a class action pursuant to the Fed-
eral Wiretap Act and the ECPA, the court held that
C. State Legislation Applicable to Electronic state law claims for unjust enrichment, invasion of pri-
Communications or Stored Data vacy, fraud by concealment, and breach of contract were
Depending on the circumstances, there may be not in violation of the Constitution on the theory "that
remedies under state legislation when an unauthorized only Congress may enact legislation regarding the
person intercepts electronic communications such as Internet. ...Amazon cites no cases removing commercial
real-time data or obtains access to archived data. In- activity from the reach of state tort law on dormant
deed, one source argues that "[s]tate statutes presently commerce clause grounds.... Indeed, the Third Circuit
serve a more important role than federal law in prohib- has expressed doubt as to whether state common law
335
iting illegal behavior with computers because many claims could violate the dormant commerce clause."
state legislatures have enacted laws with broader pro-
tection than provided at the federal level."327 For exam- Guidance Number 16
ple, by statute in California a plaintiff may sue for State law may provide remedies if an unauthorized
damages328 when someone party obtains access to, copies, and/or distributes an
agency's real-time data or exceeds its authorization or
(2) [k]nowingly accesses and without permission takes,
copies, or makes use of any data from a computer, com-
license for access to and/or use of an agency's data.
puter system, or computer network, or takes or copies any These are causes of action that may not be preempted
supporting documentation, whether existing or residing necessarily by federal statutes.
internal or external a computer, computer system, or
computer network[;] D. Whether Real-Time Data Constitutes a Trade
Secret
(3) [k]nowingly and without permission uses or causes to
be used computer services[;] ... According to the Restatement (Third) of Unfair Com-
petition, "[a] trade secret is any information that can be
(6) [k]nowingly and without permission provides or as-
used in the operation of a business or other enterprise
sists in providing a means of accessing a computer, com-
puter system, or computer network[;]
330
(7) [k]nowingly and without permission accesses or causes 513 F. Supp. 2d 264 (E.D. Pa. 2007).
331
to be accessed any computer, computer system, or com- Id. at 28283. See also In re Nat'l Security Agency Tele-
329
puter network. communications Records Litigation, 483 F. Supp. 2d 934, 939
(N.D. Cal. 2007) (holding that the SCA did not completely pre-
An issue that may arise with state legislation is empt state law privacy claims against telephone companies for
alleged disclosure of subscriber calling records to the govern-
326
Therapeutic Research Faculty v. NBTY, Inc., 488 F. ment).
332
Supp. 2d 991, 997 (E.D. Cal. 2007). Norman R. Williams, The Dormant Commerce Clause:
327
Charles Victor Lang, Note: Stolen Bytes: Business Can Why Gibbons v. Ogden Should be Restored to the Canon, 49 ST.
Bite Back, 1986 COLUM. BUS. L. REV. 251, 259 (1986) (footnotes LOUIS L.J. 817 (2005).
333
omitted) (stating also that "[t]hirty-six states presently have Crowley, 166 F. Supp. 2d at 1272 (citing Camden County
computer crime statutes, a number which is bound to increase Bd. of Chosen Freeholders v. Beretta U.S.A. Corp., 123 F.
in the future"). Supp. 2d 245, 254 (D.N.J. 2000)).
328 334
CAL. PENAL CODE § 502(e) (2009). 166 F. Supp. 2d 1263 (N.D. Cal. 2001).
329 335
Id. §§ 502(c)(2), (3), (6), (7) (2009). Id. at 1272 (citations omitted).
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and that is sufficiently valuable and secret to afford an amended counterclaim stated a claim.347 (See discussion
actual or potential economic advantage over others."336 of cases in Section VII.B.3, infra, holding that certain
Forty-five states, the District of Columbia, and the U.S. records were not subject to disclosure under public dis-
Virgin Islands have adopted some version of the Uni- closure laws because they were exempt as trade se-
form Trade Secrets Act (UTSA), a model law defining crets.)
337
rights and remedies regarding trade secrets. Not addressed in the Sherman case is the question of
Pursuant to the UTSA, "any information" may con- whether the Copyright Act preempts a state claim for
stitute a trade secret.338 The UTSA defines a trade secret misappropriation of a trade secret. As one article notes,
to mean as "the line between trade secret and copyright protec-
information, including a formula, pattern, compilation, tion becomes blurred...the possibility of preemption
program device, method, technique, or process, that: (i) increases." 348 Whether there is preemption depends on
derives independent economic value, actual or potential, whether the essence of the claim for a violation of a
from not being generally known to, and not being readily state's trade secrets law is merely for unauthorized
ascertainable by proper means by other persons who can copying of data or software.
obtain economic value from its disclosure or use, and (ii) In Huckshold v. HSSL, LLC,349 the plaintiff had en-
is the subject of efforts that are reasonable under the cir- tered into an agreement to develop software for the
339
cumstances to maintain its secrecy.
tracking and maintenance of a customer database for
To preserve a trade secret, the owner must be careful 350
the defendant HSSL. Another defendant, The Miller
"to limit access to the information, and such informa- Group, Inc., allegedly copied the software from one of
340
tion should only be disclosed in confidence." HSSL's computers in violation of the agreement be-
A claim may be available for misappropriation of tween the plaintiff and HSSL. The court noted that a
trade secrets either under the UTSA341 or at common claim for misappropriation of trade secrets is preempted
law. Although a misappropriation of trade secrets is when the claim is based solely on copying, because the
unlawful, "trade secret law does not create a right in claim would be "qualitatively equivalent" to a claim for
342
the information itself." Thus, an owner "has no pro- 351
copyright infringement. On the other hand, "claims of
prietary interest in the information," and "`the public at misappropriation of trade secrets that are based upon
large remains free to discover and exploit the trade se- breach of an independent duty of trust or confidence to
cret through reverse engineering...or by independent the plaintiff are qualitatively different than claims for
creation.'"343 copyright infringement and are not preempted."352 The
For example, as the court observed in Sherman & court held that the plaintiff's claim for misappropriation
Co. v. Salton Maxim Housewares, Inc.,344 under the of trade secrets was not preempted, because the plain-
Michigan statute345 a claimant would have to establish tiff would "have to prove that the software was a trade
among other things whether the data in question secret that was misappropriated by Miller from HSSL
amounted to trade secrets and whether the party and that HSSL was under a duty to maintain the secret
against whom the claim is made had express or implied and limit its use. These are elements in addition to the
346
consent to disclose or use the data. In Sherman, be- copying required for a copyright infringement claim."353
cause Salton alleged that "Sherman took sales data Likewise, in Therapeutic Research Faculty, the court
constituting trade secrets and/or proprietary informa- held that the alleged misappropriation by the sub-
tion under MCL § 445.1902(b)(ii)(A) and gave it to Sal- scriber of its username and password for the defen-
ton's competitor...without Salton's consent," Salton's dants' benefit was a violation of the UTSA adopted by
California.354 Moreover, the court held that the plaintiff
336
Restatement (Third) of Unfair Competition, 39 cmt. d could prevail on its claim by showing damage because of
355
(1995). the misappropriation or unjust enrichment.
337
Smith, supra note 22, at 722 n.138. There also may be an issue of whether a state's trade
338
Uniform Trade Secrets Act 1, available at: http://euro. secret law preempts other claims at common law. Sec-
ecom.cmu.edu/program/law/08-732/TradeSecrets/utsa.pdf, last
347
accessed on Jan. 8, 2010. See also State of Washington, Trade Id. at 822.
Secrets Act, WASH. REV. CODE § 19.108, et seq., available at 348
Carole P. Sadler, Comment: Federal Copyright Protection
http://apps.leg.wa.gov/RCW/default.aspx?cite=19.108, last ac- and State Trade Secret Protection: The Case for Partial Pre-
cessed on Jan. 8, 2010. emption, 33 AM. U.L. REV. 667, 668 (1984) (footnote omitted).
339
Uniform Trade Secrets Act § 1(4). 349
344 F. Supp. 2d 1203 (E.D. Mo. 2004).
340
Smith, supra note 22, at 724; Restatement (Third) of Un- 350
Id. at 1205.
fair Competition, 39 cmt. g (1995). 351
Id. at 1209 (citation omitted).
341
See Uniform Trade Secrets Act 1(2). 352
Id. (citations omitted).
342
Smith, supra note 22, at 729 (citing Restatement (Third) 353
Id.
of Unfair Competition, 39 cmt. c (1995)). 354
343
Therapeutic Research Faculty, 488 F. Supp. 2d at 999
Id. at 730 (footnote omitted). (quoting Fas Techs. Ltd. v. Dainippon Screen MFG., Co., Ltd.,
344
94 F. Supp. 2d 817 (E.D. Mich. 2000). 2001 U.S. Dist. LEXIS 7503 (N.D. Cal. May 31, 2001) and cit-
345
MICH. COMP. LAWS § 445.1902(b)(ii)(A). ing CAL. CIV. CODE §§ 3426.2, 3426.3)).
346 355
Sherman, 94 F. Supp. 2d at 821. Id. at 1000 (citations omitted).
