U.S. appeals court revives workplace cybertheft lawsuit

Wed Dec 26, 2012 2:53pm EST
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By Jonathan Stempel

NEW YORK (Reuters) - In a decision that could make it easier for businesses to police cybertheft in the workplace, a U.S. appeals court revived a chemical company's lawsuit accusing a former Toronto-area employee of using her home computer to steal trade secrets from its Connecticut server.

Reversing a lower court ruling, the 2nd U.S. Circuit Court of Appeals in New York said U.S.-based MacDermid Inc may pursue civil damages claims against a former account manager under Connecticut state law, even though she conducted her alleged improper activity from her home in Fort Erie, Ontario.

Wednesday's decision may make it easier for U.S. companies to crack down on alleged computer theft that occurs in remote locations, including outside the country. In recent years, U.S. courts increasingly have dealt with cases involving downloads of corporate information by employees, both in criminal cases brought by prosecutors and civil cases filed by companies.

Jackie Deiter, the MacDermid account manager, had worked for the Waterbury, Connecticut-based company's MacDermid Chemicals unit in Mississauga, Ontario, from May 2008 until her termination in April 2011 for reasons unrelated to the lawsuit.

The company accused her of violating Connecticut laws on unauthorized computer access and misappropriating trade secrets by emailing customer data, laboratory reports, and pricing lists drawn from its Waterbury server. It said this occurred soon after Deiter had learned she was about to be fired.

Deiter admitted to emailing materials, but said in court papers that she did so for her job, and because she could not print at home from her employer-issued laptop.

U.S. District Judge Warren Eginton in New Haven, Connecticut said in November 2011 that he had no jurisdiction over MacDermid's lawsuit because Deiter had merely emailed information "from one computer in Canada to another computer in Canada."

But a unanimous three-judge panel of the 2nd Circuit said MacDermid's server was a computer under Connecticut law, and that it did not matter that Deiter had accessed it from outside the state, which she had never visited.   Continued...

A generic picture of the number keypad on a computer keyboard. OFFPO REUTERS/Catherine Benson