COMPUTER CRIMES

Copyright (c) 2000 American Criminal Law Review

American Criminal Law Review

Spring, 2000

37 Am. Crim. L. Rev. 207

by LAURA J. NICHOLSON, TOM F. SHEBAR and

MEREDITH R. WEINBERG

The Department of Justice ("DOJ") broadly defines computer crimes as "any violations of criminal law that involve a knowledge of computer technology for their perpetration, investigation, or prosecution."

Motives

• Show off their skill

• Highlight the weakness of security

• Promote Open Access to Computing

• Revenge or punishment

• Thrill of doing so

Who Commits Computer Crime

• Youthful Hackers

• Terrorists

• Disgruntled Employees or Customers

• Spies

Classification by role of Computer in the Crime • Object of the Crime - theft of data or

computing resources

• Subject - the physical location of the crime through use of worms, sniffers, viruses

• Instrument Used in a crime - To gather credit card data used in a fraudulent purchase

Federal Approach

• Has a comprehensive law that addresses computer crime as opposed to adding sections to all other types of criminal laws.

• This has been through a series of laws that have been refined to address short comings and successful defenses of cases tried under the laws.

National Information Infrastructure

Protection Act of 1996 • Subsection 1030(a)(1) - crime to access

data without access or in excess of access and to then transmit classified data.

• 1030(a)(2) - prohibits gaining data without access of in excess of access rights from government, financial or computers used interstate commerce

•1030(a)(3) -prohibits government or agency non public computers without authorization and this must effect government usage.

•1030(a)(4) - access without authorization with the intent to defraud and obtain something of value worth $5000

1030(a)(5) - knowingly transmitting a file, program or command that causes damage to a protected computer system

•1030(a)(6) - illegal to knowingly transmit passwords that would allow access to government computers or computers used in interstate or international commerce.

•1030(a)(7) - illegal to make a threat to cause damage to a government computer or a computer used in interstate or international commerce.

Eliminated Common Defenses

• Included most computers by adding computers used in interstate commerce

• By removing “adversely” from section (3) prevents the benign hacking defense

• 1886 act required damage to be from an outsider so an insider could not be prosecuted for damaging a system

• (7) made it illegal to threaten to crash a system or to encrypt files and ask for a payment to not crash or to provide the key to the file.

Other Enhancements of 1996 Act

• Crime to Attempt to access not just successfully gaining access

• Changes misdemeanor offences to felonies if done for financial gain of over $5000

• Provides incentive to report computer crimes through allowing civil penalties for intentional actions

Sentencing Changes

• Recidivists - now a repeat offender for violating any section of the act.

• Special Skill sentence enhancement - not found to require formal computer training just more knowledge than average person

• but sentences are still less than the guidelines and have not been adjusted up

Other Statutes Used to Prosecute• Copy Right Laws - $3.2 billion ‘98

• National Stolen Property Act - fraudulent transfers of funds

• Mail and Wire Fraud - add to almost any computer crime

• Electronic Communication Privacy Act - to intercept electronic or wireless communication or obtain, alter or prevent access to electronic storage.

More Statues Used

• Communications Decency Act of 1996

• Child Online Protection Act - but both have first amendment issues

• Child Pornography Prevention Act of 1996 - illegal to have, transmit computer generated or modified images depicting child porn

Enforcement - still infrequent

• Companies might prefer to handle this privately to avoid publicity.

• DOJ - statistics are not consistent in this area

• Ambiguities in prior laws hampered efforts

• Lack of knowledge in law enforcement and prosecutors might contribute

FBI efforts

• Innocent Images probe -

• 56 field offices have computer crime teams• Infrastructure Protection and Computer

Intrusion Squad out of Washington

Constitutional IssuesSearches of Computer Records

• Search warrants listing business records including computer files have withstood scrutiny

• Staleness - if typically don’t delete then age of information leading to warrant less important

State Laws

• Every State has enacted some computer related law.

• Half are modeled on the Federal Computer Systems Protection Act

• The other state have enacted comprehensive laws

Personam Jurisdiction

• Does the court have the authority to decide the case?

• Traditional approach - interactivity.

• Does a web site just present static information or can a visitor search for a product and then enter into a purchase agreement?

• Jurisdiction can be location of a computer hacked into or where a defrauded customer sent a transaction from.

International Approaches

• The ability of criminals to act throughout the world and the possibility of computer terrorism calls for international actions to address computer crime.

• Definition of a computer crime and actions to make it illegal both locally and internationally is a continued effort.

4 areas commonly addressed

• Privacy

• Economic Crimes

• Intellectual Property

• Procedure to aid in prosecuting computer crime.

• Nations are following the model of the Computer Fraud and Abuse Act of 1996

Internet Related Issues

• Countries have laws other countries do not and the internet can present information from one country that is illegal in another.

• German bans on denying the Holocaust.

International Convergence

• Countries are defining specific laws related to computer crimes which is useful than adding language to address computerization of traditional crimes.

• Several Countries are working together to address the issues of international computer crime issues like evidence rules

International treaty or convention would need to address:• Extradition

• cooperation in the retention of witnesses and evidence

• recognition of foreign judgements

• cooperation in investigation

Encryption Control

• US is almost alone in its attempts to force encryption key escrow.

MUDDY RULES FOR CYBERSPACE

Copyright (c) 1999 Yeshiva University Cardozo Law Review

October, 1999

21 Cardozo L. Rev. 121

• by Dan L. Burk

Intellectual Property Law in Cyberspace

There have been recent calls for clear property rights for digital media.

These calls ignore the efficiency of unclear or “Muddy” entitlement approach.

Holders of copyrights have been pushing for the application of these rights to digital media based comparison to real property laws. There has been intellectual support for “Strong” property rights of copyrighted material in digital format. The arguments have not addressed the benefits of unclear entitlements in real property.

• Property Rules - the right to allow or forbid others from using your property.

Vrs

• Liability Rules - the right to compensation for the use of

your property.

Who decides - owner or user.

Divided Rules

• can be clear and divided - licensing fee for selling records

• divided and Muddy - a property owner can make free use of adjacent land necessary for access to make effective use of the land.

• Divided Rights - some rights are shared or ceded to other parties

• Complete Entitlement - all entitlements are held by a single party.

• Clear - the outcome of action to resolve a dispute is predictable.

• Muddy - the outcome of a dispute in not predictable

• This is based on legal rules that allow a decision maker some flexibility in deciding a case involving competing factors.

Strong Property Rights

• Real Property Law grants strong control over rights to conserve the value of a finite resource.

• But does this apply to intellectual property which is not finite but can be copied?

• The argument for this is base on public good - can be used by many simultaneously without interfering with each others use. If a payment can not be secured for the creator there will be no incentive to create things for the public good. But as the price increases some people will not buy it and thus there is a loss of Social Welfare from the property.

Buyers Preference

• To counter the rebuttal of lost social welfare another argument is made. That choices people make serve as an indicator for the types of goods desired and thus help indicate to creators what to create.

• However pricing above the nominal cost will limit sales and skew the results as to desire for a product due to incorrect demand/ pricing data.

Sell Exclusive Rights to Highest Bidder• This argument states that in order to induce buyers

to buy they must be given exclusive rights to the property to protect against rival development. Without this there will be not incentive to create.

• But this again results in lost Social Welfare of development by rival parties.

• This is where muddy rules come in related to Copyright law.

Copyright covers Original Content• Cherry Tree on property line

– Legal boarders designated by copyright are not all that clear cut.

– court decisions on originality sometimes seem like baking contest versus deed

– if a real property case was thus decided we would be more upset that people seem to be in copyright cases equivalently ruled on.

– Boundaries of land can be as fuzzy as originality, loud noise or smoke.

• It might be in societies interest to give ownership of the tree to whoever will best serve society - the baker of award winning pies.

• However when a clear right is established a high transaction cost can prevent development of the right by an interested party against the best interests of the public.

• Muddy rights can resolve this by bringing such disputes to a third party for to decide can aid in negotiations because the outcome is unclear.

• Nuisance judge can consider social value not just clear property right.

• Uncertainty makes parties negotiate and prevents one party from pushing to litigation less the case be decided against them and all rights given to the other party.

• Cave and enterance

Copyright law allows for unauthorized use for public good• Such taking of rights under fair use are

contemplated where the transaction costs exceed or would frustrate a public value.

• The uncertainty drives parties to court or more often into a less costly agreement.

Originality

• Deciding originality through use of filters or abstraction can introduce similar uncertainties.

Shared Property Rights• Can function like muddy property rights such that

they can be reasonable in cases with low transaction costs as well as with the high transaction costs already described.

• When negotiating a complete sell out and not just rights either party can be the buyer or the seller. That reduces the likeliness of stratigic positioning. The whole property is only worth x so the value of your property is x - y because the other party might turn around and decided to buy at your price.

Blocking Patents

• Patent and and a patent on an improvement on the product. Neither can be used with out infringing on the other patent. It is good to allow for improvement of products so patents should not reduce the incentive for doing so. The stake each party holds will lead to negotiations rather than the loss from not developing the product.

Muddy Entitlement might work like blocking patents

• With the risk of filtration, abstraction and fair use create uncertainty that can lead to negotiation rather than seeking an enforcement suit.

•

Democratic Spillover• There is a value in open access to informational

works.

• Muddy equivalent - lattitude to consider public good when the social value is high and the transaction costs are prohibitive. Small taking of property rights allowed where the value gained is small and the cost of enforcement makes taking action unlikely. Where the value is higher the muddied entitlement will be decided by a third party who can consider the social value

Transaction Costs• Defined boarders allow strong property

rights but defined boarders are not as easy as finding the beginning and ending of a file. – Recoding or intertext what the reader brings to

a work.

Search and Bargaining Costs• While search engines help the cost of finding what

you are looking for can be high. Library of Congress dumped on the floor, trace an email joke back to origin.

• Technology might offer friction free low transaction costs but they might not be in the interest of sellers/consumers. Each side might try to maximize their share of the surplus in a transaction. Business could gain the upper hand based on data about consumer

• Multimedia brings together information from many sources and this could lead to holdouts. Railroad. Want all the value of the whole product not just the share related to their piece. Eminent Domain.

• Fair Use is like eminent domain for copyrighted material if

Jurisdictional Issues

• What court and what rules apply if a dispute arises? Buyers, sellers any that the transmission passed through?

• What national rights are applicable when a work is created?

Rent Seeking

• Waste of funds spent to influence legislation is balanced by the risk that market will make other jurisdictions more attractive.

• International approach with strong rights could result in rent seeking without the control of another jurisdiction to go to.

Informal Solutions/Self Help

• Tying - easily copied product to a less easily copied component. Software to upgrades or support.

• Published work to pocket updates

• Browsers to other products once market has been identified. Netscape

First to Market• Pricing a product to make profit before a copy can

be brought to market and just plan to have new innovation to continue to make profit.

• Sponsors - advertisers pay for the costs of television materials. Already on the internet.

• Use Tax on Digital Recorders to compensate for the resulting loss in copied materials.

Rights Management Systems• Books sold at an average price to users who will value the

work to differing degrees.• Technology can allow a user who reads a whole to pay for

all of it while one who can’t finish the first chapter to pay for the part used. This leads to a call for strong rights.

• But Originality, public domain and the public good might warrant the continuation of muddied entitlements.

• But access is required and technology could block and lead to a wasteful security/hacking use of resources.

Trade Secrets

• Licensing costs have to be lower than the cost of independent development or reverse engineering a product

• The ability to prevent unauthorized access should not be allowed to change the current incentive structure.

Collective Right Organizations• Have the right to collect royalty for use of

property under their domain

• music

• patent pools

• screen actors guild

• groundwater management basins

• Can all be seen as having benefits of Muddy entitlements

Muddy Entitlement works and there is a continued role for it in dealing with digital works