Former Employees Use Data Obtained From Plaintiff’s Computers To Aid Competitor
Defendants McMillian and Pierceall were former employees of plaintiff Frees Inc., a company that manufactures and markets ventilation and dust control systems. Both defendants went to work for Southeast, a competitor of plaintiff. The complaint alleged that defendants improperly obtained proprietary data from plaintiff’s computer systems, which they used to assist Southeast in competing with Frees. Defendant McMillian was also alleged to have deleted data from Frees’ computers before he left its employ. As a result, plaintiff expended over $16,000 to engage computer consultants to conduct a forensic investigation of its computers, and the harm McMillian may have caused. Frees did not suffer any interruption of service as a result of defendants’ alleged misconduct.
Plaintiff commenced this suit, asserting claims under the Computer Fraud and Abuse Act, 18 U.S.C. section 1030. Plaintiff sought to recover both the funds expended in retaining the computer consultants, as well as the revenues it lost as a result of defendants’ use of its proprietary data.
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Court holds that under the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. section 1030, the costs incurred by the owner of a computer system in retaining consultants to conduct forensic investigations of the use by defendants of the computer system, and the harm such use may have caused, constitute a “loss” within the meaning of the statute, which can be used to meet the CFAA’s $5000 jurisdictional threshold.
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