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Employee’s Own Electronic Customer Lists “Converted”

Originally posted 2013-03-05 17:36:15. Republished by Blog Post Promoter

Originally published August 2, 2005.

Another interesting New York decision reported by the (sub only) New York Law Journal ), an an article called “The Common Law Concept Applied to Computers.”  [Update:  The link to the New York Law Journal is long gone, but the case is Shmueli v. Corcoran Group, 9 Misc.3d 589, 802 N.Y.S.2d 871 (Sup. Ct. N.Y. Co.), aff’d, 29 AD 3d 309 (App. Div. 1st Dept. 2006).]

A Manhattan judge has relied on analogy to determine that the common-law concept of conversion — the wrongful retention of another person’s physical property — applies to electronic records.

Supreme Court Justice Herman Cahn held that a terminated real estate agent who was prevented from accessing her work computer to obtain an electronic list she kept has a conversion cause of action against her former employer, the Corcoran Group.

Usually the former employer is suing the employee for theft of trade secrets. Here, presumably . . .  the employee’s list was her own property, perhaps brought from a previous professional existence, and not that of her employer. The fact that it was kept on her employer’s computer . . . did not automatically make it the employer’s property. We will want to read the full decision, but this is a very interesting case for computer law afficionados.

One last thought from Justice Cahn:

“The question is,” according to Justice Cahn’s decision, “does the common law tort of conversion become an extinct vestige of the past as to documents maintained on a computer, merely because traditional definitions of documents evolve over time to the point where wood pulp is no longer the only required medium upon which to record data?”

Their lack of wood pulp notwithstanding, Ms. Shmueli’s electronic records still comprised property, Justice Cahn ruled.

Who are you to sue?

Supreme Court, Appellate Division - BrooklynWhat’s the difference between standing — the right to seek judicial redress for an alleged wrong — in copyright and patent?

Who else, besides someone litigating the matter, but Pamela Chestak would ask that question, and understand how to answer it:

I’m curious about the different legal standards that the courts apply in patent versus copyright cases when deciding whether a plaintiff who acquired the rights through transfer has standing. Patent law seems draconian, as exemplified byAbraxis Bioscience, Inc. v. Navinta, LLC.

In Abraxis (blogged here and here), standing for a patent infringement suit was foiled by a complex transfer that would have been perfectly fine under New York law, the choice of law for the transaction, but that wasn’t under the law of the Federal Circuit. Even an assignment to a corporate family member, perhaps carefully worded for tax purposes, can deprive a party of standing for patent infringement, like here and here. Often there are attempts to fix the problem with confirmatory assignments, but often the effort fails.

Compare this to copyright cases. Twice in the past few weeks I’ve seen a statement like this, which I find somewhat remarkable: “When the parties to an assignment have no dispute over the transfer, third-party infringers lack standing to invoke Section 204’s writing requirement to avoid suit.” Malibu Media, LLC v. DoesNo. 12-2078 (E.D. Pa. Jan. 3, 2013). . . .

I don’t really see any support in the statutory language for the different treatment between patent and copyright cases. We have “patentee” and “owner”–equivalent terms–as the only ones who may bring suit. Transfers have to be in writing in both cases. In both cases, the burden is on the plaintiff to prove ownership–which is the point that I think the copyright cases play fast and loose with. I mean seriously, a defendant doesn’t have standing to ask that the plaintiff be put to its proof that it owns the rights it is asserting? Personally, I think that’s a bit of crazy talk.

And we hate it when judges talk crazy.

But how about the Righthaven cases?  One of the big deals about the Righthaven decisions was that holding that Righthaven didn’t really have anything to sue for infringement over, or had merely, as Marc Randazza and I put it in one (relatively insignificant) Righthaven brief, obtained a “chose in action,” which the Copyright Act does not authorize.  In other words, Righthaven didn’t have standing to sue.

The Court ultimately agreed with this argument, Read More…

Things will never be the same

Fine carousel at Garden State Plaza

Where she stops, nobody knows!

Larry Zerner:

On August 3, 2011, the 9th Circuit Court of Appeals, in the case Perfect 10, Inc. v. Google, Inc. made a major change relating to copyright law that will affect litigation strategy from now on.  Basically, the 9th Circuit (shockingly agreeing with the 2nd Circuit), decided that Courts would no longer consider a finding of “likelihood of success on the merits” automatically leads to a finding that the Plaintiff would suffer irreparable harm if an injunction is not granted.

Well, I think they merely clarified the point.  Otherwise I wouldn’t have been able to write this post three years ago. Well, I could have written it, but it would be, you know.  Way wrong.  Not that there’s anything wrong with that… in the Ninth Circuit.

But read Larry’s whole post, and the decision, because his point is a good one:  things are different when the Circuit Court makes such a decision, and litigators need to know it.