995 F. Supp. 2d 340
E.D. Pa.2014Background
- Zhang is charged in Count I with damaging a protected computer under 18 U.S.C. §§ 1030(a)(5)(A), (c)(4)(A)(i)(I) and Count II with violating the NS A, 18 U.S.C. § 2314.
- Indictment alleges Zhang copied 6,700 confidential Company A files, then transferred them to a server and later to Internet storage in Sweden and Germany.
- Zhang copied additional files on July 3 and 4, 2010, and deleted files from the Server to cover tracks.
- Zhang notified Company A of his last day on July 6, 2010, shortly after the conduct.
- Question presented: whether the NS A reaches intangible digital files and whether the indictment states a federal offense.
- Rule 12(b)(3)(B) challenge: if the indictment fails to allege an offense under the NS A, it must be dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does NS A reach intangible digital files as goods? | Zhang | Zhang | NS A does not clearly reach intangible digital files. |
| Must the NSPA involve tangible goods to violate? | Zhang | Zhang | Indictment fails to allege tangible stolen goods; dismissal warranted. |
| Does the indictment allege a market existence for the stolen files? | Zhang | Zhang | Court did not reach market existence; dismissal based on tangibility. |
Key Cases Cited
- Dowling v. United States, 473 U.S. 207 (U.S. 1985) (NSPA scope; physical goods concept; ambiguity resolved in favor of lenity)
- United States v. Seagraves, 265 F.2d 876 (3d Cir. 1959) (goods, wares, merchandise as ordinarily commerce subject)
- United States v. Brown, 925 F.2d 1301 (10th Cir. 1991) (computer programs as intangible not within NSPA)
- United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012) (intangible source code generally not within NSPA)
- United States v. Agrawal, 726 F.3d 235 (2d Cir. 2013) (tangible removal of documents supporting NSPA violation)
- United States v. Martin, 228 F.3d 1 (1st Cir. 2000) (intangible components may contribute to value; but tangible takings doctrine)
- United States v. Farraj, 142 F.Supp.2d 484 (S.D.N.Y. 2001) (transfer of electronic documents via internet within NSPA)
- United States v. Stafford, 136 F.3d 1115 (7th Cir. 1998) (information not automatically goods/merchandise under NSPA)