Apple iTracking Case: will Apple be WINNING on Computer Fraud and Abuse Act claim?

Image representing Apple as depicted in CrunchBase

Image via CrunchBase

From what I’ve seen thus far, it should.

But first let’s start with a little background …

Apple Was iTracking and Got Sued!

As anyone who is not living under a rock knows by now, Apple has been sued over the allegations that it has surreptitiously tracked and recorded the details of all iPhone and 3G iPad owners’ movements since approximately June 2010. These are the allegations underlying the plaintiff’s claims in Ajjampur v. Apple, Inc., (the “Apple iTracking Case”) filed in the Middle District of Florida, Tampa Division on April 22, 2011. Here is a copy of the Complaint.

The CFAA Violations Alleged

The plaintiffs seek to make this a class action lawsuit and claim it is worth in excess of  $5,000,000 for violations of, among other things, the Computer Fraud and Abuse Act (“CFAA”). Their claims are premised upon 2 violations of the CFAA:

  1. Subsection (a)(2)(C) which is the standard “obtains information from a protected computer” “fraud” section that is almost always used. (Last weeks’ blog Basic Elements of a Computer Fraud and Abuse Act – “Fraud” Claim sets out the elements of proof for this “standard” claim); and
  2. Subsection (a)(5)(A) which provides that a violation is committed by “[w]hoever … knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer.

Apple will certainly file a Motion to Dismiss the Computer Fraud and Abuse Act claim on the issues of “jurisdictional loss” and “damage” and, in all likelihood, “access” as well. We will start by looking at access, as courts usually do when analyzing Computer Fraud and Abuse Act cases.

The Access Issue

Continue reading

New “Employment” Computer Fraud and Abuse Act case … but with a twist!

It’s always the same: Employee decides to go work for a competitor. Employee takes confidential information. Employee uses it in new job with competitor. Employer sues.

We see it all the time and, in fact, it is probably the most common scenario of cases asserting claims under the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030, et seq. This case, however, handed down on April 20, 2011, has an interesting twist.

In Meats by Linz, Inc. v. Dear, 2011 WL 1515028 (N.D. Tex. Apr. 20, 2011), the court handed down a decision denying the Defendant’s Motion to Dismiss the CFAA claim on two distinct grounds: “access” and “loss”.

The Facts, Just the Facts

Steve Dear was employed by Meats by Linz, Inc. (“MBL”) as the general manager of its Dallas sales facility. He had an employment agreement that included a confidentiality / non-disclosure agreement. Dear decided to go work for one of MBL’s competitors but, before announcing he would be leaving, accessed MBL’s password-protected confidential and proprietary information to which only he, and others on a “need to know” basis, had access. In fact, he accessed it at 9:15 p.m. on a Sunday night, downloaded it, and sent an email resignation about two hours later. In the words of Gomer Pyle, “Surprise! Surprise!” … not long afterwards, he was working for a competitor and soliciting MBL’s customers by, according to MBL, using its confidential and proprietary information that he had taken.

Employer Sued

Continue reading

What I Learned In My First Week Using Social Media For Business

Last week I began a self-study crash course in using social media for businesses. I had to, right? I mean we are now fully engaged in this “New Economy” that is often said to be changing the way the world does business. I hope this really is the future because I have spent a week studying this stuff and let me tell you, it is fun! During this week I have learned a lot—as though I have been drinking water through a fire hose! And I know there is still lots more to learn but if there is one thing that I can say sticks out more than anything else it is this: if you want to effectively use social media for business, do your best to try and be a good genuine person who is honest, uses good old fashioned manners, and shows basic respect for others. Is this over simplifying it? Of course, but here’s the way I see it …

Out are the days of puffery, disingenuous promises, and outrageous claims that strain the bounds of credulity. In the old economy, marketers of goods and services would often perform focus groups to find out what people thought was most appealing about the goods and services they were peddling, prepare a few talking points of information they wanted the consumers to know about the product, then feed it to the consumers through advertisements with a catchy slogan that would make those findings stick into their brains (conscious or subconscious, it didn’t matter). That was it. It was a one way street where the marketers controlled the message so that the consumers heard only that which they wanted them to hear. That is, the consumers had no alternative to the hype they pushed which, most of the times led to disappointment when what was promised was not delivered.

The “Information Age” of the last decade or so enabled the free flow of information available on the Internet and that helped make the one way street into a four lane highway for consumers. Consumers were no longer limited to only the information the marketers wished to feed to them. Consumers who were motivated to do so became empowered to research goods and products and learn vastly more about them than they ever could before. This allowed those consumers to begin seeing through all of the hype and discover the truth about that which they were seeking. They no longer had to believe the controlled message that was being fed to them. This was a huge step in equalizing the playing field between the buyers and sellers of goods and services.

In the “New Economy”, social media has taken a step further the empowerment of the Information Age. Consumers are now armed with information and, by golly they are willing to use it! They are no longer willing to conduct business based upon the puffery, disingenuous promises, and outrageous claims that was forced on them so many times before. What they want now is no different than what all of us have always wanted, it is just that now they have the means to obtain it (or more of it, anyway). They want TRUTH.

Social media has now turned the four lane highway of the Information Age into an interstate highway. That is, consumers are no longer satisfied with simply having access to good and bad information. Other than arming themselves with that information, they have found that by using social media to engage in dialogues with prospective peddlers of goods and services, they have a much better chance of getting to know them, developing relationships with them, and ascertaining whether they find them to be honest and trustworthy based upon that dialogue. This is somewhat akin to asking to speak to the proverbial owner and “looking the man in the eye” like back in the old “brick and mortar days” in that it allows people to judge the character for themselves based upon their own instincts and perception. Moreover, by establishing this type of dialogue and relationship, those who are peddling their wares know full well that if they do not deliver as promised, the reviews will be scathing and many other prospective consumers will certainly hear about it. In other words, social media seems to have brought us back to the balance that consumers had before the era of one-way mass marketing, back to a time resembling that of face to face communications. This is powerful stuff.

Now, I must caveat everything I say in this blog with this caveat: at this point this is all academic for me. I am a true neophyte who has accomplished absolutely nothing through using social media for business! I have no first-hand knowledge on the issue and can only say what I have learned through the writings of others during this crash course. Well that plus a little common sense. Nonetheless, now that I am safely all caveated up, it seems to me that the main way to succeed in this type of business marketing is by forming relationships with and truly serving your customers. Real genuine service seems to be the key here, not just feigned interest until you can make the sale and, as a word of warning if that is how you do business, you had better stay away from social media all together! People know how to smell a rat and you can bet, when they do, they will let the whole world know about it!

So, in summary, what has this crash course taught me after just one week? How about this: (1) use social media to dialogue with your prospective customers and try to form sincere relationships with them; (2) treat your prospective customers (and others) with dignity and respect (i.e., like real people for goodness sakes!); (3) be honest with them; and (4) do not make promises that you can’t keep. Finally, and perhaps most importantly, pray that these rules will catch on with politicians!