A decision from the U.S. District Court for the Northern District of California held that the costs associated with the tracking and discovery of the identity of the person who stole proprietary information from a company does constitute "loss" for the purposes of calculation of damages under the Computer Fraud and Abuse Act (CFAA).
The dispute in the case was between a company and its competitor. Plaintiff alleged that the defendant competitor company accessed privileged parts of plaintiff’s computer information system to, among other things, create a disparaging PowerPoint slide show. Plaintiff based its claim under CFAA which prohibits unauthorized access to a protected computer and any person who suffers damage or loss in excess of $5,000 due to another’s misuse may maintain a civil action.
Plaintiff relied on CFAA and its $5,000 threshold by arguing that the costs to identify that it was the competitor company who broke into its systems should be counted towards the $5,000 threshold. Defendant disagreed and moved for summary judgment, in reliance of Tyco Int’l v. Does, which holds that CFAA allows recovery for losses beyond mere physical damage to property but additional types of damages have generally been limited to accessing the damage caused to the system or to resecure the system following the attack.
The court distinguished the Tyco case on the facts and held that the costs of "responding to [the] offense" should include the costs, as in this case, of determining that defendant was one of the hackers who did access the computer system without authorization.
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