Washington State Has A New IP Law: Stolen Or Misappropriated Information Technology

Washington State's new law that takes effect on July 22, 2011 creates state-based liability for use of so-called stolen or misappropriated information technology. In particular, the new act creates liability for the use without authorization, as a component in an "article or product," of stolen or misappropriated hardware or software that was available for retail purchase on a stand-alone basis. Before liability is imposed, the law requires advance notice from the claimant and an opportunity to cure. Liability only applies when the product containing the stolen or misappropriated information technology causes "a material competitive injury as a result of the stolen or misappropriated information technology."

The Washington Attorney General is authorized to bring a claim under this new law, as are private claimants. But the law does not identify who can bring a private claim. Certainly, it appears that the owner of the stolen IP can sue, but the new act does not appear to limit claims to parties who themselves have experienced a material competitive injury. At any rate, the law allows for several remedies, including an injunction, plus damages consisting of "actual direct damages" or "statutory damages of no more than the retail price of the stolen or misappropriated information technology." If the misuse is found to be willful, the court can treble the damage award and assess costs and reasonable attorneys' fees.

The foregoing is but a brief and incomplete description of the new Washington law. Interested persons should review the session law and make an independent determination as to its meaning, application and merit. But from my perspective, this law appears to have a very high burden to overcome -- preemption. That is, the very definition of stolen or misappropriated information technology, and the use thereof, appears to fall squarely within the four corners of a patent infringement claim or a copyright infringement claim. Indeed, even though the so-called "information technology" is not the subject of an issued patent or copyright does not take the potential claim out from under the foot of preemption jurisprudence.

In any event, this may all be sorted out in the future. The fun begins on July 22, 2011!