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Steptoe Cyberblog

Steptoe Cyberlaw Podcast – Interview with Richard Bejtlich

Posted in China, Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies

Podcast 59Richard Bejtlich is our guest for episode 59 of the Cyberlaw Podcast.  Richard is the Chief Security Strategist at FireEye, an adviser to Threat Stack, Sqrrl, and Critical Stack, and a fellow at Brookings.  We explore the significance of China’s recently publicized acknowledgment that it has a cyberwar strategy, FireEye’s disclosure of a gang using hacking to support insider trading, and NSA director Rogers’s recent statement that the US may need to use its offensive cyber capabilities in ways that will deter cyberattacks.

Podcast 59 In the news roundup, class action defense litigator Jennifer Quinn-Barabanov explains why major automakers are facing cybersecurity lawsuits now, before car-hacking has caused any identifiable damage.  I explain how to keep your aging car and swap out its twelve-year-old car radio for a cool new Bluetooth enabled sound system.  Michael Vatis disassembles the “$10 million” Target settlement and casts doubt on how much victims will recover.

Michael also covers the approval by a Judicial Conference advisory committee of a rule allowing warrants to extend past judicial district lines, explaining why it may not be such a big deal.  Maury Shenk, former head of Steptoe’s London office and now a lawyer and a private equity investor and adviser, jumps in to discuss the Chinese cyberwar strategy document as well as China’s effort to exclude US technology companies from its market.

As always, send your questions and suggestions for interview candidates to CyberlawPodcast@steptoe.com or leave a message at +1 202 862 5785.

Download the fifty-ninth episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

How Lawyers Can Deter the Cybertheft of Commercial Secrets

Posted in China, Cybersecurity and Cyberwar, International, Security Programs & Policies

Cyberspies can’t count on anonymity any more.

The United States (and the private security firm Mandiant) stripped a PLA espionage unit of its cover two years ago with a detailed description of the unit’s individual hackers; that report was followed by federal indictments of members of the unit that described them and their activities is great detail. More recently, the President outed North Korea for the attack on Sony. And as if to underscore the growing confidence of the intelligence community in its attribution capabilities, the Director of National Intelligence almost casually tagged Iran for a destructive cyberattack on Sheldon Adelson’s Las Vegas Sands gambling empire.

That’s good news, but it’s only a first step. To make a real difference, attribution has to yield more than talk.

Unfortunately, neither the companies victimized by network intrusions nor their governments have yet found ways to turn attribution into deterrence. No one expects to see members of the PLA in federal court any time soon. The administration’s public sanctions on North Korea were barely pinpricks. And Iran could be forgiven for concluding that its cyberattacks were rewarded by concessions in the nuclear enrichment negotiations.

But that’s not the last word. I attended a recent international conference where a surprising number of European officials signaled their eagerness to confront countries engaged in cyberespionage against their industries. They assumed that they could identify the countries that were stealing corporate secrets.

What they wanted were legal remedies — and remedies of a particular kind. They didn’t want to punish the hackers, who all too often are well protected by government. What they wanted was a way to punish the hackers’ customers — the state-owned companies who were benefiting from the theft of competitors’ intellectual property. Unlike the hackers, those companies can’t hide at home forever. To get the full benefit of their shiny new stolen technology, they have to sell their products globally. Which means they have to submit to the law and the jurisdiction of western nations.

But what law? Does a company victimized by cyberespionage have any legal remedies against the company that received the stolen data? That’s the question European (and American) trade officials were beginning to ask.

Faced with that question, I found three plausible legal remedies for companies that are victimized by hacking aimed at their corporate intellectual property. Here they are.

First, victims of cyberespionage could sue the foreign company benefiting from the theft of trade secrets. A company can be sued under the Uniform Trade Secrets Act (UTSA) if it uses “a trade secret of another without express or implied consent” and it “knew or had reason to know that [its] knowledge of the trade secret was derived from or through a person who had utilized improper means to acquire it.” UTSA § 1(2)(ii)(B)(II). So if the foreign company had reason to believe that it was receiving data stolen from a competitor’s network, it is at grave risk of liability under the UTSA.

The UTSA has been adopted in one form or another in forty-eight states, and plaintiffs can sue for damages, including “actual loss,” “unjust enrichment . . . that is not taken into account in computing actual loss,” and “exemplary damages” for “willful and malicious” violations. UTSA § 3(a), (b). All of those damages would seem to apply where the defendant was complicit in an attack on the plaintiff’s corporate network.

Second, the federal Computer Fraud and Abuse Act (CFAA) allows private suits against anyone who “intentionally accesses a computer without authorization,” obtains information, and causes at least $5,000 of loss. 18 U.S.C. § 1030(a)(2)(C). That certainly applies to the hackers themselves; but what about the recipients of the stolen data? They’re liable too, at least if they can be shown to have “conspired” with the intruders. 18 U.S.C. § 1030 (b). Proving conspiracy poses a higher hurdle than meeting the UTSA’s “reason to know” standard; some courts say that a charge of conspiracy requires “specific allegations of an agreement and common activities.” See, e.g., NetApp, Inc. v. Nimble Storage, Inc., No. 5:13-cv-05058, 2014 WL 1903639, at *13 (N.D. Cal. May 12, 2014). But there will be many times when the evidence strongly suggests both. For example, if the theft of data was more than just a one-off event, there is every reason to believe that the beneficiary of the thefts was actively telling the thieves what to steal.

A third remedy is section 337 of the Tariff Act of 1930. It allows the International Trade Commission (ITC) to bar the importation of goods produced using stolen trade secrets. The ITC may exclude such goods from the United States if they are the result of “unfair methods of competition . . . the threat or effect of which is to destroy or substantially injure an industry in the United States.” 19 U.S.C. § 1337(a), (d). “Unfair methods of competition” includes a federal common law cause of action for the theft of trade secrets, which closely mirrors the provisions of the UTSA. See TianRui Grp. Co. v. Int’l Trade Comm’n, 661 F.3d 1322, 1327–28 (Fed. Cir. 2011). A complaint can be filed in the ITC even if the theft of trade secrets occurred abroad, so long as the theft violated the laws of the place where the secret was stolen. Id. at 1328. Although Section 337 does not allow for the recovery of money damages, a victim of commercial cyberespionage can at least make sure he’s not competing in the United States against products that are produced using his trade secrets and intellectual property.

In short, there are surprisingly robust legal remedies not just against cyberspies but against the companies who benefit from the spies’ intrusions. But that is not the end of the matter. Just having a good legal case does not mean that a victim will bring suit. There are plenty of practical reasons why a lawsuit might not be prudent even with the law on your side. But that’s a topic for another day, and another post.

Steptoe Cyberlaw Podcast – Interview with Dr. Andy Ozment

Posted in China, Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies
Stephanie Roy, Jason Weinstein

Stephanie Roy and Jason Weinstein

In episode 58 of the Cyberlaw Podcast, our guest is Andy Ozment, who heads the DHS cybersecurity unit charged with helping improve cybersecurity in the private sector and the civilian agencies of the federal government.  We ask how his agency’s responsibilities differ from NSA’s and FBI’s, quote scripture to question his pronunciation of ISAO, dig into the question whether sharing countermeasures is a prelude to cybervigilantism, and address the crucial question of how lawyers should organize cybersecurity information sharing organizations (hint:  the fewer lawyers and the more clients the better).  In the news roundup, we revisit the cybersecurity implications of net neutrality, and Stephanie Roy finds evidence that leads me to conclude that the FCC has stolen the FTC’s playbook (and, for all we know, deflated the FTC’s football).  This ought to at least help AT&T in its fight with the FTC over throttling, but that’s no sure bet.

I explain why Hillary Clinton’s email server was a security disaster for the first two months of her tenure – and engage in utterly unsupported speculation that she closed the biggest security gap in March 2009 because someone in the intelligence community caught foreign governments reading her mail.

In news with better grounding, the Wyndham case goes to the Third Circuit and the bench is hot.  We explain why this is good for Wyndham.  In other litigation news, the feds respond to Microsoft in the Irish warrant case.  Michael and I agree that the Justice Department is praying for a cold bench.

Finally, in two updates from earlier podcasts, it looks as though China may have backed down on backdoors, for now, so Silicon Valley can go back to worrying about Jim Comey.  And I explain my claim from last week‘s that the FREAK vulnerability is over-hyped to support a simplistic civil libertarian morality tale.

As always, send your questions and suggestions for interview candidates to CyberlawPodcast@steptoe.com or leave a message at +1 202 862 5785.

Download the fifty-eighth episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Steptoe Cyberlaw Podcast – Interview with Mike Rogers

Posted in China, Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies
Mike Rogers, Stewart, Doug Kantor

Rep. Mike Rogers, Stewart Baker, and Doug Kantor

This episode of the podcast features Rep. Mike Rogers, former chairman of the House intelligence committee, Doug Kantor, our expert on all things cyber in Congress, and Maury Shenk, calling in from London.  Mike Rogers is now a nationally syndicated radio host on Westwood One, a CNN national security commentator, and an adviser to Trident Capital’s new cybersecurity fund.  The former chairman addresses a host of issues – gaps in CFIUS, the future of the President’s new cyber threat integration center, the risk of rogue state cyberattacks on US infrastructure – as well as the issues we cover in the news roundup.  These include Maury’s take on China’s toughening policy toward US technology, the prospects for a workable bill renewing section 215 (the ex-chairman is not as sanguine as Doug Kantor and I) and the administration’s new privacy bill.  (Our take: the bill is ideal for the Twitter age, since you still have 137 characters left after typing “DOA.”)  Maury updates us on the latest reason for delay in adoption of a new European data protection regulation.  Doug Kantor and Mike Rogers consider the prospects for an information sharing bill and comment on privacy groups’ goalpost-moving style of congressional negotiation.  And, finally, I respond to Edward Snowden’s claim that he wants to move to Switzerland by reminding him (and the Swiss) what he said about them the last time he lived there.  (Said Snowden: “You guys can’t say I look gay any more.  I’m living in Switzerland.  I’m the straightest-looking man in the country,” Geneva is “nightmarishly expensive and horrifically classist,” and “I have never, EVER seen a people more racist than the swiss.”  Apparently a year in Moscow broadened his horizons.)

As always, send your questions and suggestions for interview candidates to CyberlawPodcast@steptoe.com or leave a message at +1 202 862 5785.

Download the fifty-seventh episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

Steptoe Cyberlaw Podcast – Interview with Siobhan Gorman

Posted in China, Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies

Stephanie Roy, Siobhan Gorman, Stewart Baker

Our guest for Episode 56 of the Cyberlaw Podcast is Siobhan Gorman, who broke many of the top cybersecurity stories for the Wall Street Journal until she left late last year to join the Brunswick Group, which does crisis communications for private companies.  Siobhan comments on the flood of attribution stories in recent days, including the US government’s almost casual attribution of the Sands Las Vegas cyberattack to Iran and the leaked attribution of the Saudi Aramco and US bank attacks to the same nation.  She also compares private sector cybercrisis planning to the US government’s coordination (or lack thereof) in responding to the Sony attack.

In other news, Stephanie Roy and I take a deep and slightly off-center dive into the FCC’s net neutrality ruling.  I predict that within five years the FCC will have used its new Title II authority to impose cybersecurity requirements on US ISPs.  (And in ten years, I suspect, there will be a debate in the FCC over whether to throttle or disfavor communications services that don’t cooperate with the FBI’s effort to deny perfectly encrypted security to criminals.)  Stephanie demurs.

Michael Vatis and I chew over China’s “overdetermined” (h/t Mickey Kaus) policy of ousting American tech products in favor of Chinese competitors, the prospects of class action plaintiffs in the Komodia/Superfish/Lenovo flap, and NY financial regulator Benjamin Lawsky’s war on the password.

We finally get listener feedback to read on the air, as Michael Samway congratulates Nuala O’Connor for her masterly handling of, well, me.  Those who think they can do a better job of humiliating me will have their work cut out for them, but they’re welcome to try, sending emails to CyberlawPodcast@steptoe.comail and voice mails to +1 202 862 5785.

Download the fifty-sixth episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Steptoe Cyberlaw Podcast – Interview with Nuala O’Connor

Posted in Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies

In Episode 55 of the Cyberlaw Podcast, we revive This Week in NSA to explore the claim that GCHQ stole mass quantities of cell phone encryption keys.  Meanwhile, Jason explains the complex political battles over Rule 41, Michael explains why so many companies have rallied to Twitter’s first amendment claim against the Justice Department, and both of them explain how Yahoo! managed to beat the government’s indefinite gag order – and why Yahoo! might even be right.  After which we melt down into the bottomless hot mess of liability and litigation that surrounds the Lenovo/Superfish/Komodia/Lavasoft flap.

Nuala O'Connor Stewart Baker Jason Weinstein

Nuala O’Connor, Stewart Baker, and Jason Weinstein

Our interview is with the charming and feisty CEO of the Center for Democracy and Technology, Nuala O’Connor.  Nuala and I square off over end-to-end encryption, privacy, and section 215, while managing to find common ground on TLS and even child-rearing.

As always, send your questions and suggestions for interview candidates to CyberlawPodcast@steptoe.com or leave a message at +1 202 862 5785.

Download the fifty-fifth episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Steptoe Cyberlaw Podcast – Interview with Ben Wittes

Posted in Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies

Episode 54 of the Cyberlaw Podcast features a guest appearance by Lawfare’s own Ben Wittes, discussing cybersecurity in the context of his forthcoming book, The Future of Violence, authored by Ben and Gabriella Blum.  (The future of violence, you won’t be surprised to hear, looks bright.)  Ben also floats the idea of taping an episode of all the Lawfare-affiliated podcasts in a bar with some of our listeners.  More on that idea to come.

In the news roundup, I cover the President’s surprisingly news-light cybersecurity summit in Silicon Valley.  Jason comments on state attorneys generals’ predictable sniping at Anthem for delays in identifying all the potential victims of its hack.  I note with satisfaction a serious loss by EFF in the Jewel lawsuit over the US government’s access to AT&T traffic.  And Jason lays out a report  by the New York State Department of Financial Services on insurance company cybersecurity.

Stewart and Jason

We both express concern about two Kaspersky security reports that identify new hacking tactics and new dangers for computer networks.  The patient infiltration of large bank networks and the extraction of hundreds of millions of dollars casts doubt on the safety of banking systems around the world.  Equally troubling is the discovery that what Kaspersky calls the “Equation” group used firmware exploits to achieve enduring access to a wide variety of hard drives.  (Though Kaspersky’s claim that the access depended on having the hard drive makers’ source code looks wrong.)

As always, send your questions, suggestions for interview candidates and offers to stand a round at the Beer Summit to CyberlawPodcast@steptoe.com or leave a message at +1 202 862 5785.

Download the fifty-fourth episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Steptoe Cyberlaw Podcast – Interview with Alexander Klimburg

Posted in Cybersecurity and Cyberwar, Data Breach, International, Privacy Regulation, Security Programs & Policies

In this week’s episode of the Cyberlaw Podcast, I take our new mobile recording equipment to Paris to talk about Europe’s cybersecurity directive with Alex Klimburg, of the Hague Institute for Strategic Studies and the Harvard Kennedy School’s Belfer Center.  The directive is in its final stages after a two-year buildup, and the most recent drafts suggest that the EU is finding it hard to muster the will for heavy regulation in this area.

In our news roundup, Jason Weinstein covers the Anthem hack and probable Chinese responsibility for it.  I point out that American privacy groups have said more or less nothing about the idea that a massive database about Americans might be assembled by China.

Stephanie Roy explains the FCC’s proposed net neutrality regs. And Doug Kantor lays odds on the five most prominent cybersecurity proposals.  Short version:  information-sharing is looking doable, and a national breach law might be as wellCFAA changes look less easy, and the ECPA changes are stuck in a fight between people who hate Wall Street and privacy campaigners. The President’s $14 billion appropriation request for cybersecurity will get sliced, diced, and roasted, but he’ll likely end up with a lot of that money.

Cybersecurity scrutiny continues for financial institutions.  Jason reports on two recent regulators’ warning shots.  And I cover a variety of surveillance news, including the irony that a UK tribunal declared that an otherwise unlawful GCHQ practice had been saved by none other than Edward Snowden, who provided the transparency the tribunal considered necessary.  Thanks, Eddie!

The Cyberlaw Podcast is now open to feedback.  Send your questions, suggestions for interview candidates, or topics to CyberlawPodcast@steptoe.com.  If you’d like to leave a message by phone, contact us at +1 202 862 5785.

Download the fifty-third episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

Steptoe Cyberlaw Podcast – Interview with Rebecca Richards

Posted in China, Cybersecurity and Cyberwar, Data Breach, International, PCLOB, Privacy Regulation, Security Programs & Policies

In this week’s episode, our guest is Rebecca Richards, NSA’s director of privacy and civil liberties.  We ask the tough questions:   Is her title an elaborate hoax or is she the busiest woman on the planet?  How long will it be before privacy groups blame the Seattle Seahawks’ loss on NSA’s policy of intercepting everything?  How do you tell an extroverted NSA engineer from an introvert?  And, more seriously, now that acting within the law isn’t apparently enough, how can an intelligence agency assure Americans that it shares their values without exposing all its capabilities?

In the week’s news, Jason Weinstein, Michael Vatis and I explore the DEA’s license plate collection program and what it means, among other things, for future Supreme Court jurisprudence on location and the fourth amendment.  We take on the WikiLeaks-Google flap and conclude that there’s less there than meets the eye.

Jason celebrates a festival of FTC news.  The staff report on the Internet of Things provokes a commissioner to dissent from feel-good privacy bromides.  The FTC data security scalp count grows to 53, with more on the way.  We discover that the FTC has aspirations to become the Federal Telecommunications Commission, regulating telecommunications throttling as well as cramming – and apparently forcing the FCC into the business of regulating hotels.  To be fair, we find ourselves rooting for the Commission as it brings the hammer down on a revenge porn site.

And Michael finds the key to understanding China’s policies on cybersecurity and encryption.

The Cyberlaw Podcast is now open to feedback.  Send your questions, suggestions for interview candidates, or topics to CyberlawPodcast@steptoe.com.  If you’d like to leave a message by phone, contact us at +1 202 862 5785.

Download the fifty-second episode (mp3).

Subscribe to the Cyberlaw Podcast here. We are also now on iTunes and Pocket Casts!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.