Attorney Steve® Software Piracy Defenses – Illegal “wiretapping” under California law (check the state laws in your jurisdiction).

Introduction

So here's the situation. You purchase (or illegally download a software product over the internet) and while installing the software there may be a little box that you have to check saying “I agree” before you can proceed with the installation. The “I agree” is usually linked to an End Use License Agreement (“EULA”) that explains the terms and conditions of use.  In some cases, it may also state that your company will be monitored by special “monitoring technology” that will allow the software vendor to determine if you are over-using or over-installing software licenses.  I have seen some situations where this is clearly disclosed and other situations where its not very clear at all what's going on or what's going to happen.  Then, one day you get a legal demand letter from a copyright infringement law firm accusing you of infringement of their intellectual property and potentially demanding thousands, if not hundreds of thousands of dollars.  Yes, we see this situation fairly often.

The question or issue this blog explores is if their snooping on the client's corporate network is not CLEARLY AND CONSPICUOUSLY DISCLOSED IN THE EULA, can this constitute an ILLEGAL WIRETAP?  And if so, what are the potential penalties and ramifications of that?

California law on illegal wiretapping

Under California Penal Code section 631:

(a) Any person who, by means of any machine, instrument, or contrivance, or in any other manner,

intentionally taps, or makes any unauthorized connection,

whether physically, electrically, acoustically, inductively, or otherwise,

with any telegraph or telephone wire, line, cable, or instrument, including the wire, line, cable, or instrument of any internal telephonic communication system,

or who willfully and without the consent of all parties to the communication, or in any unauthorized manner,

reads, or attempts to read,

or to learn the contents or meaning of any message, report, or communication while the same is in transit or passing over any wire, line, or cable,

or is being sent from,

or received at any place within this state;

or who uses, or attempts to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained,

or who aids, agrees with, employs, or conspires with any person or persons to unlawfully do, or permit, or cause to be done any of the acts or things mentioned above in this section, is punishable by a fine not exceeding two thousand five hundred dollars ($2,500), or by imprisonment in the county jail not exceeding one year, or by imprisonment pursuant to subdivision (h) of Section 1170 , or by both a fine and imprisonment in the county jail or pursuant to subdivision (h) of Section 1170 .

If the person has previously been convicted of a violation of this section or Section 632 , 632.5 , 632.6 , 632.7 , or 636 , he or she is punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in the county jail not exceeding one year, or by imprisonment pursuant to subdivision (h) of Section 1170 , or by both that fine and imprisonment.

Exceptions

(b) This section shall not apply:

(1) to any public utility engaged in the business of providing communications services and facilities, or to the officers, employees or agents thereof, where the acts otherwise prohibited herein are for the purpose of construction, maintenance, conduct or operation of the services and facilities of the public utility,

or

(2) to the use of any instrument, equipment, facility, or service furnished and used pursuant to the tariffs of a public utility,

or

(3) to any telephonic communication system used for communication exclusively within a state, county, city and county, or city correctional facility.

(c) Except as proof in an action or prosecution for violation of this section, no evidence obtained in violation of this section shall be admissible in any judicial, administrative, legislative, or other proceeding.

(d) This section shall become operative on January 1, 1994.

If the software company is violating your rights, you may need to report them to federal or state law enforcement.  Moreover, a civil lawsuit might also be possible or possibly a lawsuit seeking declaratory relief (although check with your legal counsel and do not rely on this article which is general legal information only).

Attorney Steve Tip: Spying on your customers is NOT GOOD BUSINESS PRACTICE, and trying to bully your clients into a settlement based upon illegally obtained wiretapping of computer networks, and internet systems can land you in more trouble than its worth.  Especially if this evidence is deemed inadmissible in a court of law.  In fact, going into Court with this type of evidence could result in having to “take the 5th amendment” because explaining to the judge how the software infringement data was compiled and gathered could be an admission to a crime.

Civil penalties

As noted above, a civil suit might also be possible for wiretapping.  As noted in Cal Penal Code Section 637.2

“(a) Any person who has been injured by a violation of this chapter may bring an action against the person who committed the violation for the greater of the following amounts:

(1) Five thousand dollars ($5,000).

(2) Three times the amount of actual damages, if any, sustained by the plaintiff.

(b) Any person may, in accordance with Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, bring an action to enjoin and restrain any violation of this chapter, and may in the same action seek damages as provided by subdivision (a).

(c) It is not a necessary prerequisite to an action pursuant to this section that the plaintiff has suffered, or be threatened with, actual damages.

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