Shrinking Prospects For Private Trade Secret Actions Under The CFAA

The Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, was enacted in 1984 as a criminal statute, but was subsequently amended in the 1990s to allow for private causes of action for damage to a "protected computer." As confidential information today is largely stored electronically, companies have increasingly turned to the CFAA in litigating the misappropriation of proprietary information.

For a variety of reasons, a CFAA claim may be a desirable supplement or even alternative to a trade secret action. Trade secret actions arise under state law, so absent diversity, a plaintiff is confined to state court. The CFAA, however, confers federal subject matter jurisdiction, enabling the suit to proceed in federal court. And, the complained-of conduct may not qualify for a trade secret action, which typically requires that misappropriated information be confidential and well-guarded. The CFAA, in contrast, merely specifies the taking of "information," an easier hurdle