EDVA Judge Holds That The Copyright Act Preempts Some Claims Under The Virginia Computer Crimes Act

In Maxient, LLC v. Symplicity Corp., Case No. 1:14CV1184, 2014 U.S. Dist. LEXIS 150542 (E.D.Va. Oct. 23, 2014) (found here), Maxient, a developer of web-based software for student conduct records management, claimed that a competitor, Symplicity, posed as a customer to access its proprietary website and gain access to Maxient's trade secrets. Maxient brought suit in state court alleging violations of the Virginia Trade Secrets Act and the Virginia Computer Crimes Act (VCCA) and a claim for unlawful use of encryption in criminal activity. Symplicity removed the case on the grounds that the Copyright Act preempted all of Maxient's claims other than the claim under the Trade Secrets Act. On a Motion to Remand, Judge Trenga held that Maxient's claims under the VCCA for using a computer to convert software and for computer trespass were preempted but held that a separate VCCA claim for using a computer to obtain property under false pretenses and Maxient's claim for the unlawful use of encryption in criminal activity were not.

Judge Trenga followed a two-step analysis to determine whether the Copyright Act preempted Maxient's claims. First, he quickly determined that the computer software at issue was "within the scope of the subject matter of copyright." The second prong, however, required a determination of whether Maxient's state law causes of action included elements instead of or in addition to acts of reproduction that would constitute copyright violations.

Judge Trenga noted that, while not dispositive, the gravamen of Maxient's claim was the misappropriation of trade secrets through unlawful competitive intelligence gathering. Maxient did not claim that Symplicity accessed or copied any software or source code and did not claim any copyright protection over the information that Symplicity accessed.

Regardless, Judge Trenga held that one of Maxient's VCCA claims for computer fraud and its VCCA claim for computer trespass were preempted. The preempted computer fraud claim...