E-Commerce Law Week, Issue 488

Eleventh Circuit Finds No Reasonable Expectation of Privacy in Personal Computer Connected to Workplace Network

A bungled attempt to keep files on a personal computer connected to a workplace network private cannot protect the files from government snooping.  This is the upshot of United States v. King, in which the Eleventh Circuit held that civilian contractor Michael King's attempt to configure his laptop computer to bar access by co-workers did not create a reasonable expectation of privacy in the contents of the computer, since his settings allowed access by all individuals on the air base where he was working.  The court therefore refused to suppress evidence of child pornography gathered during a search of these files.  This ruling suggests that where employees have made files on their own computers available to a large number of their co-workers -- even if unintentionally -- they may not have a reasonable expectation of privacy against the government. 

Court Rules That Tort of Conversion Does Not Apply to "Intangible" Data

A federal court in Massachusetts ruled last month in In Re TJX Companies Retail Security Breach Litigation that plaintiff financial institutions could not add a claim for conversion to their complaints against TJX Companies Inc. and Fifth Third Bank over the TJX data security breach.  The plaintiffs had asked the court to extend the common law tort of conversion to intangible cardholder information that was compromised by the breach, alleging that, by "storing" and "failing to safeguard" this data, the defendants "wrongfully exceeded [their] authorized use of the Plaintiff Banks’ property and wrongfully exercised control and dominion over this Property."  But the court refused to extend the tort of conversion to intangible property, expressly declining to follow the New York Court of Appeals' decision last year in Thyroff v. Nationwide Mutual Insurance Co., which applied the conversion tort to electronic records.  This ruling suggests that the common law is still in flux when it comes to electronic data, and that the law will vary state by state for some time to come.

Antigua Wins Another Hand Against the US, But It's A Small Pot

Late last year, the World Trade Organization Arbitrator ruled that Antigua and Barbuda may seek suspension of trade obligations regarding the United States worth up to $21 million, as compensation for the United States's refusal to give foreign websites the same access to Internet gambling on horse races enjoyed by domestic operations.  WTO panels had previously held that the U.S. restrictions on Internet gambling on horse racing violate the General Agreement on Trade in Services (GATS).  The Arbitrator's award fell far short of the $3.443 billion in compensation the island nation had requested; however, in a potential blow to U.S. intellectual property holders, the Arbitrator ruled that Antigua could seek its $21 million worth of annual concessions under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) -- including by suspending several of its obligations to protect U.S. copyrights, trademarks, and trade secrets.  The Arbitrator reasoned that the "extremely unbalanced nature of the trading relations" between the two countries permitted Antigua and Barbuda to suspend trade obligations under the TRIPS, since doing so under the GATS would likely harm Antigua more than the United States and would therefore not be "practicable or effective."

Questions and comments about E-Commerce Law Week are always welcome.  Please send your feedback to Sally Albertazzie.