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Fisherman Beats Theft-of-Trade-Secrets Conviction Involving Hack

Jan. 12, 2022, 8:44 PM

A tech savvy grouper fisherman from Mobile, Ala., saw his theft-of-trade-secrets conviction vacated Wednesday, at least temporarily, when the Eleventh Circuit said venue wasn’t proper in the federal district court in which he was tried.

Timothy Smith hacked into the computers of StrikeLines, a business that sells the coordinates of artificial fishing reefs. Smith stole reef coordinates and them offered them to other anglers on Facebook.

Smith told one of the owners of StrikeLines that he would take the Facebook posts down if they gave him the coordinates for deep grouper fishing.

Smith was charged with violating the Computer Fraud and Abuse Act, theft of trade secrets, and extortion. The jury found him not guilty on the CFAA count but convicted him on the other two counts.

Smith said the venue where he was tried, the U.S. District Court for the Northern District of Florida, was improper. Although StrikeLines’ office is in Pensacola, Fla., which is in that district, its servers are in Orlando, Fla., which is in the Middle District of Florida.

The essential elements of the theft-of-trade-secrets count took place in the Southern District of Alabama, where Smith lived when he hacked into StrikeLines’ computer, Chief Judge William H. Pryor Jr. wrote for the U.S. Court of Appeals for the Eleventh Circuit. Venue was therefore proper in that federal district, he said.

The government said that venue was nevertheless proper in the Northern District of Florida because that’s where StrikeLines experienced lost business. But the court rejected that argument, saying that the theft-of-trade-secrets statute doesn’t require that the owner of the secret experience a loss.

Smith’s theft-of-trade-secrets conviction was vacated, but the court said it could be refiled in the Southern District of Alabama.

But the extortion count was properly tried in the Northern District of Florida, and the jury had sufficient evidence to find Smith guilty, the court said.

Judges Britt C. Grant and Frank M. Hull joined the opinion.

Bradford Ladner LLP represented Smith.

The case is United States v. Smith, 11th Cir., No. 20-12667, 1/12/22.

To contact the reporter on this story: Bernie Pazanowski in Washington at bpazanowski@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com