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When Taking Proprietary Information Is Not a Crime

By Wendy H. Schwartz and Jennifer L. Achilles

In two decisions issued back-to-back on April 10 and 11, the U.S. Courts of Appeal for the Ninth and Second circuits interpreted three different federal statutes ” the Computer Fraud and Abuse Act (CFAA), the National Stolen Property Act (NSPA), and the Economic Espionage Act (EEA) ” in ways that narrowed federal prosecutors” ability to charge former employees for stealing proprietary information from their companies.

According to the Ninth Circuit”s decision in United States v. Nosal, ”F.3d”, 2012 WL 1176119 (9th Cir. April 10, 2012), an employee does not always violate the CFAA by intentionally infringing his company”s computer use policy. If an employee was authorized to access the information, and did not gain access through internal hacking, there is no criminal violation of the CFAA regardless of whether the employee misappropriated the information for his own use. Nosal creates a circuit split among the Ninth Circuit on one hand and the Eleventh, Fifth, Seventh and First circuits on the other.

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