This article appeared first in the August 2012 issue of the Fresno County Bar Association Bar Bulletin.
I recently received a call from a client, after a former programmer shut down her company’s website. The hack was intentional, arising from a contract dispute, and the programmer planned to hold the website captive until they resolved a payment issue.
The matter was particularly urgent because my client had planned to debut an online service that same day. The longer the website was down, the more revenue and third-party support they would lose. Fortunately, within an hour later the site was back up, and while it took another week to finalize a settlement, in that single, reckless move, the programmer (who used an old password to access my client’s site) lost any real leverage he may have had in the original dispute.
What the disgruntled programmer didn’t understand is that shutting down a website without authorization or contractual right is digital trespass, similar in form to its landlocked cousin trespass to chattels. The programmer agreed to bring the site back up only after I advised him the same law that protects a business from someone interfering with his or her physical property would apply here as well.
Property is property, I explained; whether in physical or digital form, and the damages flowing from the civil torts of trespass to chattels and conversion apply. In certain circumstances, under 18 USC § 1030 and California Penal Code Section 502, a person may be subject to criminal prosecution as well.
Fortunately our programmer was cooperative, but the illustration demonstrates that when it comes to digital disputes, people often mistakenly believe that if you can’t see it, the law somehow doesn’t exist or apply.
Digital property is still property
While the cyber world is an emerging legal frontier, timeless principles still apply. The virtual property involved in the dispute above (a website location and underlying computer code) may be intangible, but it has intrinsic value nonetheless.
More often than not, buried beneath complex digital quarrels are age-old question of law. If an agreement can be found, failing to deliver software is still a contract dispute. Using another’s intellectual property without authorization, even in digital form, is a copyright violation. Negligently managing online data can lead to an invasion of privacy tort, even if the information is a person’s Netflix viewing history. Discrediting a person by publishing false information is defamation, regardless that the disparaging material is a 140-character Twitter post.
As an attorney, the challenge is in understanding the technology well enough to recognize the underlying legal principles.
Finding Digital Solutions
Not long ago I was negotiating a software development agreement on behalf of a client. The other party, a publisher, was a large and well-known feature film company, reputed to be inflexible in its contractual terms. In the final stage of the negotiation, the publisher insisted my client grant them the intellectual property rights not only to the application being contracted, but to my client’s software engine and library technologies as well. The latter request was particularly aggressive, and the parties were deadlocked.
As a solution, I told the publisher we would agree to license them the current version of the engine code, if they would allow my client to exclusively retain all rights to any future versions and improvements. It was analogous to handing over the keys to a car we built last year, but reserving the right to create future models for ourselves. My client was satisfied because the value of their existing software was depreciating, as is the nature of technology. The publisher’s need was met as well, because if my client failed to provide timely software corrections, they could create them independently.
We found agreement by creating an understanding that carefully considered the law, the realities of business, and the predictable nature of advancing technology.
A Digitally Advancing Legal World
Courts and attorneys in all jurisdictions seem to be wrestling with questions of digital law, ranging from straightforward issues of website and software ownership to fanciful questions of whether a magical sword earned in an online video game has real world value.
The law’s digital footprint is as broad as it is long. These days, estate planners, for example, must consider the whereabouts of digitally stored assets and passwords. Divorce and family law attorneys should advise their clients of the risks they take when updating social media posts. Corporate attorneys need to keep a close eye on data privacy and confidential customer information. And prudent attorneys in all disciplines must understand how issues—such as Internet privacy, cyber-bullying, virtual property rights, cybersquatting, and intellectual property rights—affect their practice and clients.
In the center of this digital whirlwind, one thing is certain: California attorneys have an obligation to perform their duties competently, and increasingly that includes learning or acquiring the necessary skills to work in a paperless environment. But practicing attorneys need to procure more than just the ability to use email, text and Facebook correspondence, social media postings and Internet advertising, cloud storage and applications, e-discovery, and electronic court filings. They need a professional understanding of the legal implications as well.
While its unlikely that your firm will be involved in the next trespass to chattels litigation involving an online virtual world, questions of digital law will undoubtedly arise. The question is how prepared you are to answer them.
About Dan Rogers
Dan Rogers practices law within the digital media and interactive technology industries, both in the San Joaquin Valley and Bay Area. He’s also the author of numerous articles on the video game industry and digital law, and lives with his family outside of Yosemite National Park. In addition to his law practice, he is an adjunct professor at San Joaquin College of Law in Clovis, California, where he teaches a course in interactive media law and serves as a member of the law school’s technology committee.
 The idea of electronic trespass to chattels and conversion was discussed in Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal. App. 4th 1559 [54 Cal. Rptr. 2d 468], where a court allowed these torts to be heard in a telephone system hacking action. Further discussed in eBay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 2d 1058 (N.D. Cal. 2000), the court again found electronic trespass to chattels against the defendant, an on-line auction company, citing Thrifty: “In order to prevail on a claim for trespass based on accessing a computer system, the plaintiff must establish: (1) defendant intentionally and without authorization interfered with plaintiff's possessory interest in the computer system; and (2) defendant's unauthorized use proximately resulted in damage to plaintiff.”
 Silicon Knights v. Epic provides a good example of contractual issues that arise in software licensing agreements: http://law.justia.com/cases/federal/district-courts/north-carolina/ncedce/5:2007cv00275/89570/692/; Epic awarded $4.45 million for their cross claim of copyright infringement: http://www.theverge.com/gaming/2012/5/30/3052869/court-finds-for-epic-games-on-all-counts-in-silicon-knights-suit
 http://www.wired.com/images_blogs/threatlevel/2009/12/doe-v-netflix.pdf; Netflix pays class action settlement in customer viewing privacy case: http://www.abajournal.com/news/article/netflix_notifies_customers_of_class_action_settlement_privacy_groups_will_b/
 Joshua Fairfield, Boston University Law Review, Vol. 85, 2005, http://www.bu.edu/law/central/jd/organizations/journals/bulr/volume85n4/Fairfield.pdf provides a fairly comprehensive overview of virtual property issues.
 A good discussion on passwords, PINs, and estate planning can be found at http://estate.findlaw.com/planning-an-estate/estate-planning-keep-track-of-passwords-access-keys-and-pins.html
 A Connecticut judge ordered attorneys to provide passwords to Facebook accounts, in order to gather evidence in a custody hearing: http://www.abajournal.com/news/article/judge_orders_exchange_of_facebook_and_dating_website_passwords_in_custody_f/
 ABA Ethics 20/20 Commission recently focused on the responsibilities of a lawyer to take steps to protect a client’s confidential information when communicating via electronic technology. See article, Data Vulnerability Toughens Lawyers’ Confidentiality Rules, http://www.internetevolution.com/author.asp?section_id=795&doc_id=244896
 California Rules of Professional Conduct 3-110 (c).
 Techno Ethics, Challenges in Emerging Technology, Mark L. Tuft, http://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/2007_jun_technoethics.html