California Federal Court Dismisses Computer Fraud and State Unfair Competition Claims Alleged Against Ex-Employees Accused Of Stealing Computer Source Code

 

A designer and marketer of stereophonic technology for presenting 3-D imaging on a computer screen recently sued some ex-employees in a California federal court for allegedly violating the federal Computer Fraud and Abuse Act (CFAA), among other claims. At some point, the ex-employees allegedly downloaded their former employer’s confidential computer code and provided it to their new employer, a competitor.  The defendants moved to dismiss on the grounds that there was no allegation as to exactly how or when the ex-employees obtained the code.  In response to the motion, the plaintiff said it would need discovery in order to ascertain that information.   

The court granted the motion and dismissed the complaint for failure to plead “facts giving rise to a valid claim under the CFAA.”  The plaintiff was allowed 30 days “to amend, keeping in mind Rule 11 [the federal civil procedure sanctions rule], if Plaintiff is able to plead facts giving rise to a valid CFAA claim.”  Metabyte, Inc. v. Nvidia Corp., Case No. 12-0044 SC (N.D. Cal., Apr. 22, 2013).    

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